Sherlocking continues: Apple's interest is a 'kiss of death' to small technology firms

Posted:
in General Discussion edited April 2023
Apple insists that it develops or acquires all its own technology, but a new report is just now noticing that multiple companies have been courted by the company, then seen their work duplicated.




Software developers have long known of what's become called Sherlocking. Named after one prominent example of the process, it's used to describe the situation where Apple releases something that effectively kills off a smaller company's business.

That can often be that a third-party developer has produced something that is actually a natural extension of what Apple is already doing. It can be that Apple was always going to do whatever it is, but allegedly it can also be that Apple has deliberately set out to copy another firm.

Specifically, Apple has been accused many times of using a developer as "market research." It allegedly opens talks with the firm, then when it learns all it needs, Apple then ghosts that company and instead goes ahead making its own version of whatever it is.

For instance, the developer of BlueMail sued Apple for allegedly infringing on its intellectual property in order to create Sign in with Apple, although that case was later dismissed.

Now the Wall Street Journal has collated what it describes as more than two dozen situations where Apple has allegedly done this with hardware companies.

"When Apple takes an interest in a company, it's the kiss of death," Joe Kiani, founder of a blood-oxygen measurement device company Masimo, told the publication. "First, you get all excited. Then you realize that the long-term plan is to do it themselves and take it all."

Backing up that accusation, the Wall Street Journal has been shown an email to Masimo from Adrian Perica, at that time head of mergers and Acquisitions at Apple. It said Apple wanted to "dig deep" into Masimo's technology and added, "[let's] discuss any ideas you have about how Apple could or should integrate some [of] these technologies in our products."

Reportedly then within a few months, Masimo's chief medical officer Michael O'Reilly was hired by Apple for twice his previous salary, plus millions in Apple shares. Masimo's Kiani says that Apple reassured him about hiring O'Reilly, then continued talks with the firm, until some point after it had hired a total of 30 of its engineers.

Suing Apple is an expensive business

Masimo is currently suing Apple, and its position has been backed by the International Trade Commission (ITC). The case is about to go to jury trial.

With Masimo, AliveCor, and other firms that are not all named in the Wall Street Journal article, Apple is accused of following a specific sequence that begins with initiating contact with the smaller company.

"Apple will talk to everybody and then try to steal the best people who are developing the technology," AliveCor board chairman and investor Vinod Khosla, told the publication. Now a venture capitalist, he further said that he actively steers companies away from having any talks with Apple.

According to the publication, Apple disputes all such allegations.

"The truth, is these companies are blatantly copying our products or stifling competition by using invalid patents," an Apple spokeswoman said. "We will continue to fight these baseless claims in court and to advance technologies on behalf of our customers and public health."

Masimo's Kiani says that his company has spent $55 million so far in its legal cases, and estimates that will increase to over $100 million. Those legal cases include the filing with the ITC which led to that regulator supporting Masimo's request for a ban on sales of the Apple Watch in the US.

Such a ban will not be implemented until all appeals have concluded. Significantly, President Biden upheld the ITC's ruling backing AliveCor's case in February 2023.

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Comments

  • Reply 1 of 21
    You can't really "steal" people. Apple and Google got into legal hot water for their own anti-poaching agreement, so poaching employees is generally considered to be more competitive not less competitive. I'm not sure that part of the story is really anything more than the standard dynamics of the business world. 
    freeassociate2mike1williamlondonwatto_cobralolliverradarthekat
  • Reply 2 of 21
    igorskyigorsky Posts: 759member
    You can't really "steal" people. Apple and Google got into legal hot water for their own anti-poaching agreement, so poaching employees is generally considered to be more competitive not less competitive. I'm not sure that part of the story is really anything more than the standard dynamics of the business world. 
    Apple employees get poached all the time and the reaction tends to be "that's a smart move to aquire that talent".  Of course when Apple does the same it's "stealing".
    lkruppfreeassociate2mike1williamlondonlolliverradarthekatwatto_cobra
  • Reply 3 of 21
    mknelsonmknelson Posts: 1,128member
    You can't really "steal" people. Apple and Google got into legal hot water for their own anti-poaching agreement, so poaching employees is generally considered to be more competitive not less competitive. I'm not sure that part of the story is really anything more than the standard dynamics of the business world. 
    The main concern is the proprietary knowledge that those people have and how it appears to get used and abused by Apple.

    The Allegation:
    Step 1) Apple contacts small company claiming they want a partnership
    Step 2) Apple abandons discussions
    Step 3) Apple hires key personnel from those companies
    Step 4) Apple releases a competing product which the smaller company thinks has their technology incorporated.
    muthuk_vanalingamwilliamlondongatorguyOfergrandact73
  • Reply 4 of 21
    twolf2919twolf2919 Posts: 121member
    I don't know whether the Wallstreet article covers it, but this article definitely doesn't: what are the timelines of the technology being developed within Apple and whatever the smaller business.  For example, did Apple already have its own plans & research into blood oxygen measurements prior to approaching Massimo or did it only begin its efforts in this area after hearing details with their 'deep dives' with Massimo?  If it's the former, I think poaching talent is a perfectly kosher/legal way of augmenting its own talent pool to accelerate its development of the technology.  If it's the latter, I think it's pretty despicable.   Without proper journalistic research, who knows which was the case here?  Apple is known to be a very secretive company and they may have had years of research into blood oxygen measurement - that was certainly the case with the Apple Watch in general.  They were supposedly 'late' to the game because Samsung (and Pebble) had one first - but they've simply been developing the product/tech in secret for longer - until the product was polished enough to sell.  So I choose to give Apple the benefit of the doubt.
    lolliverwatto_cobra
  • Reply 5 of 21
    lkrupplkrupp Posts: 10,557member
    When did Apple become the Evil Empire that has to be destroyed?

    I mean, thats all we are treated to in tech blogs these days, from editorials and opinion pieces to hit piece articles. Small startups and inventors being pillaged by Evil Apple. 

    Snap pole:

    1.How many here want to see the end of Apple, the destruction of the company, the company put out of business or broken into a millions pieces, or emasculated into just another OEM.

    2. Would you feel pleasure in seeing the Apple Watch banned for sale?
     
    3. How many of you would like to see a law that forbids companies like Apple from hiring or even approaching employees of small companies? Should it also be illegal for employees of those small companies to seek employment at Apple? How long would they have to stay unemployed before they can get hired by Apple. 

    Be honest if you even can.
    edited April 2023 jas99mike1watto_cobrajony0
  • Reply 6 of 21
    larryjwlarryjw Posts: 1,031member
    It's not against the law to "steal" an idea. Ideas are not protected by any law. Trade Secrets on the other hand are protected only while it remains secret. Divulge the secret and you're toast. Embed the idea in a document then the document itself is protected by Copyright but the idea expressed by the document can be used by anyone. 

    Fairness might suggest that others ideas be acknowledged, but there is a vast gap between an idea and its implementation in a legally protectable form. 
    radarthekatwatto_cobra
  • Reply 7 of 21
    These companies are stupid to trust Apple in the first place.
    Japheywilliamlondongatorguykimberly
  • Reply 8 of 21
    mknelson said: The Allegation:
    Step 1) Apple contacts small company claiming they want a partnership
    Step 2) Apple abandons discussions
    Step 3) Apple hires key personnel from those companies
    Step 4) Apple releases a competing product which the smaller company thinks has their technology incorporated.
    I think Step 4 is really the only one that matters. That seems to be what Apple is focused on with their statement "The truth, is these companies are blatantly copying our products or stifling competition by using invalid patents" etc. 

    Mark Cuban made his first millions by cloning the software company that he got his first job with. He studied their product from the inside. He studied their business model from the inside. Then he started pitching their clients on switching to his own clone of the company/product. He was eventually fired for it but still ended up with a business that he later sold for big bucks. 
    watto_cobra
  • Reply 9 of 21
    mike1mike1 Posts: 3,313member
    Multiple companies can have an idea.
    I would venture to say that Apple would be looking for partners that might help them get to market faster/better.
    After meeting with prospective partners, they realize that they are further along themselves or there is another partner who can help them better.
    Prospective partner gets upset because Apple moved on and says they stole something which is not true.
    lolliverwatto_cobra
  • Reply 10 of 21
    Uhhhuh... When did a company that can afford $55-$100 in legal costs become “a small company”.

    The term “sherlocking” really needs to be retired. This is a practice that broad swaths of the economy engage in frequently. (Including re-treading articles from “news” organizations with poorly veiled axes to grind.)
    lolliverwatto_cobra
  • Reply 11 of 21
    charlesncharlesn Posts: 907member
    larryjw said:
    It's not against the law to "steal" an idea. Ideas are not protected by any law. Trade Secrets on the other hand are protected only while it remains secret. Divulge the secret and you're toast. Embed the idea in a document then the document itself is protected by Copyright but the idea expressed by the document can be used by anyone. 

    Fairness might suggest that others ideas be acknowledged, but there is a vast gap between an idea and its implementation in a legally protectable form. 
    It's not really that simple. It's against the law to steal ideas that are patented, assuming the patent itself isn't being challenged as defective for one reason or another. Also, there are very rigorous standards to determine if an idea merits a patent--you don't just apply and get one. As for trade secrets: employees who have signed an NDA can't divulge a company's trade secrets even if they're hired away by another firm. They can be sued if they divulge and their new employer can't proceed with any projects or products based on the illegally revealed secrets. 
    watto_cobra
  • Reply 12 of 21
    hexclockhexclock Posts: 1,272member
    This isn’t really new at all. Apple has been doing this since it took a ride over to Xerox labs and looked at the mouse. 
  • Reply 13 of 21
    danoxdanox Posts: 3,048member
    twolf2919 said:
    I don't know whether the Wallstreet article covers it, but this article definitely doesn't: what are the timelines of the technology being developed within Apple and whatever the smaller business.  For example, did Apple already have its own plans & research into blood oxygen measurements prior to approaching Massimo or did it only begin its efforts in this area after hearing details with their 'deep dives' with Massimo?  If it's the former, I think poaching talent is a perfectly kosher/legal way of augmenting its own talent pool to accelerate its development of the technology.  If it's the latter, I think it's pretty despicable.   Without proper journalistic research, who knows which was the case here?  Apple is known to be a very secretive company and they may have had years of research into blood oxygen measurement - that was certainly the case with the Apple Watch in general.  They were supposedly 'late' to the game because Samsung (and Pebble) had one first - but they've simply been developing the product/tech in secret for longer - until the product was polished enough to sell.  So I choose to give Apple the benefit of the doubt.
    Apple, having an ongoing existing project to accomplish a certain goal will always be true, and if you are contacted by Apple, Microsoft, or Google the chances are they already have an army of people already working on whatever it is they contacted you about, guaranteed.
    mike1radarthekatwatto_cobra
  • Reply 14 of 21
    danoxdanox Posts: 3,048member
    hexclock said:
    This isn’t really new at all. Apple has been doing this since it took a ride over to Xerox labs and looked at the mouse. 
    The first computer mouse demonstration was in 1968, when Steve Jobs was 13, and Steve Woziňák was 18 years old, at Stanford Research Institute, when Steve and Steve were in junior high and high school, long before Steve and Steve went to Xerox labs for a demo of what Xerox had in 1979, Xerox wasn’t first and probably wasn’t even second by then.

    https://www.youtube.com/watch?v=B6rKUf9DWRI

    Note: Apple bought, Siri from Stanford Research Institute.
    edited April 2023 freeassociate2lolliverwatto_cobra
  • Reply 15 of 21
    genovellegenovelle Posts: 1,481member
    Apple plays a really long game and never just jumps into anything. The reason these cases rarely hold up is Apple has usually been working on a solution long before the other companies have. In some cases they have submitted for patents before some of the companies even existed. 
    lolliverMacProwatto_cobra
  • Reply 16 of 21
    What this article describes may seem damning to a layman, but is actually standard business practices. In many countries, even government linked companies try all the time to hijack and copy ideas from smaller companies. What’s new? It is just business as usual and human nature. 
    watto_cobra
  • Reply 17 of 21
    hexclock said:
    This isn’t really new at all. Apple has been doing this since it took a ride over to Xerox labs and looked at the mouse. 
    Hey d@mbchite, research your history. Xerox signed an agreement with Apple, for which it was handsomely compensated. And Apple hired those engineers (with Xerox’s blessing) who wanted to see their ideas become product, rather than stay pure R&D. 

    You’ll note MS ripped off both Xerox and Apple, and tried to drive Apple out of business until the feds started breathing down it's collective neck.

    The same MS that sent limos to pick up employees of competitors at their offices in order to recruit them. 

    Also you farknode, Englbart invented the mouse circa 1963, publicly demoed in1968. 


    edited April 2023 lolliverradarthekatwatto_cobrajony0
  • Reply 18 of 21
    radarthekatradarthekat Posts: 3,866moderator
    charlesn said:
    larryjw said:
    It's not against the law to "steal" an idea. Ideas are not protected by any law. Trade Secrets on the other hand are protected only while it remains secret. Divulge the secret and you're toast. Embed the idea in a document then the document itself is protected by Copyright but the idea expressed by the document can be used by anyone. 

    Fairness might suggest that others ideas be acknowledged, but there is a vast gap between an idea and its implementation in a legally protectable form. 
    It's not really that simple. It's against the law to steal ideas that are patented, assuming the patent itself isn't being challenged as defective for one reason or another. Also, there are very rigorous standards to determine if an idea merits a patent--you don't just apply and get one. As for trade secrets: employees who have signed an NDA can't divulge a company's trade secrets even if they're hired away by another firm. They can be sued if they divulge and their new employer can't proceed with any projects or products based on the illegally revealed secrets. 
    It's never the idea that is patented, at least not in utility patents, which would be the case in stealing patented technology.  A patent protects a specific implementation of an idea, or a method of producing some desirable function.  

    The inventors of variable valve timing (Honda, I believe it was) cannot sue other automakers for implementing a similar functionality in their engines, unless their implementation is essentially equivalent to the implementation outlined in the patent's claims.  There may be multiple means to implement an idea, and any means that doesn't closely replicate the patented means is fair game.  The idea itself is free for anyone to play around with.  
    edited April 2023 jony0
  • Reply 19 of 21
    radarthekatradarthekat Posts: 3,866moderator
    hexclock said:
    This isn’t really new at all. Apple has been doing this since it took a ride over to Xerox labs and looked at the mouse. 
    Apple was invited to Xerox Parc, engineers there were told by higher ups to show Steve and his team several technologies that Xerox was working on, including the mouse and graphical user interface, and then... Apple made a deal with Xerox to allow Xerox to purchase 100,000 shares of Apple at $10 a share (pre-IPO shares!) for the ability to run with the technologies Apple was shown.  Considering stock splits, Xerox's initial investment of $1 million would be worth roughly $1.2 billion dollars today. Not Apple's fault Xerox didn't hold the shares.  

    So the Parc Labs visit was not a case of Sherlocking, much as the myth makes good Apple bashing.  
    edited April 2023 MacProjony0
  • Reply 20 of 21
    kimberlykimberly Posts: 434member
    These companies are stupid to trust Apple in the first place.
    Or trust any other company for that matter. There are many who regularly defend Apple as if they are some corporate "knight in shining armour" which, of course, is absurd - Apple is fully capable of getting down and dirty with the best of them.
    edited April 2023 gatorguy
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