Masimo has spent $100M in Apple Watch patent infringement fight

AppleInsider

Masimo's legal battle with Apple has so far cost the company about $100 million, but its CEO says it won't stop until Apple changes how it deals with smaller companies.

Apple Watch Ultra

The ITC import and sales ban of the Apple Watch in the United States was a short but important win for Masimo, the company that claims Apple infringes on its blood oxygen sensing patents. Despite the major albeit brief ban of Apple Watch sales, Masimo still intends to keep going against Apple to prove a point.

Speaking to the Wall Street Journal in an interview published on Saturday, CEO Joe Kiani declared that the fight has so far seen Masimo spend "around $100 million" fighting Apple over its technology.

Just as expressed in an earlier interview, Kiani intends to continue the fight, and that he won't settle until Apple pays for the technology and agrees to change its interactions with smaller companies.

Before his legal action, employees and friends warned Kiani of the risks of doing so against such a major opponent. "People were telling me I'm crazy and I can't go against Apple," Kiani said, with Apple described as having "unlimited resources".

Even so, with Apple's previous history of dealing with patent violation allegations from smaller companies, Kiani thinks he can make a difference in their favor. "No-one is standing up to them. If I can do it, it might change Apple for the better," he said.

A lucrative track record

Kiani and Masimo's history of legal action certainly works in his favor, with repeated wins over others in the courtroom concerning patent infringement. "Justice isn't just blind but very slow," insists Kiani. "It's painful. It's an ugly thing to go through. It's like war."

The profile on the company and Kiani's legal fights includes claims that some people view his "aggressive use of the U.S. patent system" as being "exploitation that stymies the innovation of others."

The battles picked by Kiani are protracted but lucrative to Masimo. In one seven-year patent fight with Nellcor that ended in 2006, Masimo secured damages and royalties that eventually totaled close to $800 million.

Meanwhile another seven-year patent infringement spat against Royal Philips which settled in 2016 saw Philips pay $300 million and agree to use Masimo's technology in its product. That move earned Masimo in excess of $1 billion.

While Masimo has so far spent around $100 million on its legal case against Apple, it still has some spare cash available. In 2022, the company posted around $144 million in profit.

Though Apple hasn't sought discussions with Masimo for a settlement, Kiani is said to be determined enough to continue, even if he loses the company.

"I feel like I have to do this," Kiani insisted to the report. "If I can change the most powerful company in the world from continuing to act badly, that'll have more impact on the world than anything else I'm doing."



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saarek

I wish them luck with their fight. From what I have read, they've a genuine case here and Apple knows it.

tht

The profile on the company and Kiani's legal fights includes claims that some people view his "aggressive use of the U.S. patent system" as being "exploitation that stymies the innovation of others."

Ah, a patent troll after all. 

After reading the Masimo vs True Wearables case, you really have to think that some aspects of the court are just irrational and willfully incurious. 

The case centered on whether n-dimensional regression fitting could be considered a secret. A statistics expert in the case say this type of algorithm technique has been in use for 60 years. 

The court deemed that it may be known in fields of math, but it is not in well known in the field of medical devices, and therefore could be considered a trade secret. True Wearables was prevented from being awarded a patent, and is now out of business I think. 

Absolutely nutso decision. When all this stuff uses ML, basically n-dimensional fitting but not constrained to the linear expansion old techniques use, I wonder what the courts are going to say. 

tophatnosocks

Masimo already won the patten case, correct?  Just Apple contesting in court the outcome...

So ya getting Apple to pay up is next, but this Kiani guy thinking that, that also entitles him to "change its interactions with smaller companies." of Apple, is really a joke. 

I get that they 'Apple' should, but that's not what his win in court was.   It really makes me laugh at this Kiani guy.  He's acting like some kind of police, and don't forget Masimo is an almost two billion dollar company. They hosed people somewhere.  

tht

tophatnosocks said:

Masimo already won the patten case, correct?  Just Apple contesting in court the outcome...

So ya getting Apple to pay up is next, but this Kiani guy thinking that, that also entitles him to "change its interactions with smaller companies." of Apple, is really a joke. 

I get that they 'Apple' should, but that's not what his win in court was.   It really makes me laugh at this Kiani guy.  He's acting like some kind of police, and don't forget Masimo is an almost two billion dollar company. They hosed people somewhere.  

The Masimo vs Apple patent and trade secrets case ended in a mistrial, where the jury voted 6-1 in favor of Apple. Mistrial means no action from the Court I believe. Masimo is appealing. 

The Apple patent appeals trial against Masimo’s asserted patents resulted in 15 of 17 asserted patents being invalidated. Apple is continuing to try to get the last 2 invalidated. 

The Apple vs Masimo countersuit on Masimo’s W1 watch is ongoing. 

The Masimo vs Apple US International Trade Commission case is now pending US Fed Appeals court review on whether Apple’s proposed software update stops the ITC’s claim that Apple infringed on a couple of patents. Jan 10 to 15. If the Court says Apple’s software update is likely to stop infringement, they will prevent the ITC import ban from taking effect until the software update is finished? Then further review for another 10 months?

inkling

Most of this articles seems to be about the money Masimo makes out of patent settlements. Is Masimo a serious company or is it a patent troll that keeps up a charade of selling medical products.

To research that I checked Amazon.

• Their Masimo MightySat Fingertip Pulse Oximeter currently sells for $269.99. It has a 4.5 star rating and has sold a mere 50+ in the past month. That's not much business for a company that's spending $100 million on lawyers. They have no business to save worth speaking of.
• A similar looking Innovo Deluxe Fingertip Pulse Oximeter has a slightly better 4.7 star rating, sells for $34.99 and has sold 5K+ in the past month. Indeed, Amazon has page after page filled with pulse oximeters selling for between $25 and $45. Masimo's is such a far outliner I could not find another even close to its price.

What's really odd is when I had Amazon display pulse oximeters priced from high to low, the Masimo did not even appear. The most expensive one displayed is from Zacurate at $44.99. I've been told by people at Amazon that its search results aren't literally accurate, that some items aren't displayed for reasons known only to Amazon. I suspect Amazon considers the Masimo so grossly overpriced, it doesn't bother to list it in some search results. In fact when I searched for Masimo pulse oximeter by name, it only came up fifth. 

Also, there's nothing remarkable about Masimo's product even though it sells for about six times the market price. Accuracy certainly isn't a factor. It's displays two digits on a tiny display just like all the other products, that's a 1% accuracy, which is fine for that purpose. There's also deception in this claim. 

• Clinically Proven Technology: Powered by Masimo SET, the same technology used by 9 of the top 10 US hospitals and is used to monitor more than 200 Million patients annually.

Yeah, that "same technology" is not only used by "top hospitals," it's almost certainly used in these inexpensive home ones. That's where that 200 million figure comes from for a country with about 330 million people.  It would not surprise me if it was being made in the same Chinese factories that make those $25 pulse oximeters. It looks much the same.

I've been known to criticize Apple's business tactics, but in this case I'm on Apple's side. They're battling a dishonest patent troll that sells overpriced sham products. I wish them every success.

teejay2012

Masimo's remaining patents on O2 saturation sensing seem to be continuation patents with slight changes from the parent patents awarded over a decade ago. Most have been invalidated and makes me wonder how Masimo managed to get over a billion dollars in damages in the 2 cases past 10 years. No one questioned the prior art that existed for technology that is now 80 years old? The one patent that the ITC ruled was being infringed on by Apple was awarded in 2021... and imo is a rather trivial improvement. However I am not sure if a software change will get around it. The ITC has lawyers with engineering backgrounds, but they really are over their heads on this one. This needs to go to a proper court with patent experts. Finally if/when Masimo's remaining patents are invalidated, will they even have an O2 sensing business left - apart from the audio companies they have recently purchased?

charlesn

inkling said:

Most of this articles seems to be about the money Masimo makes out of patent settlements. Is Masimo a serious company or is it a patent troll that keeps up a charade of selling medical products.

To research that I checked Amazon.

• Their Masimo MightySat Fingertip Pulse Oximeter currently sells for $269.99. It has a 4.5 star rating and has sold a mere 50+ in the past month. That's not much business for a company that's spending $100 million on lawyers. They have no business to save worth speaking of.
• A similar looking Innovo Deluxe Fingertip Pulse Oximeter has a slightly better 4.7 star rating, sells for $34.99 and has sold 5K+ in the past month. Indeed, Amazon has page after page filled with pulse oximeters selling for between $25 and $45. Masimo's is such a far outliner I could not find another even close to its price.

What's really odd is when I had Amazon display pulse oximeters priced from high to low, the Masimo did not even appear. The most expensive one displayed is from Zacurate at $44.99. I've been told by people at Amazon that its search results aren't literally accurate, that some items aren't displayed for reasons known only to Amazon. I suspect Amazon considers the Masimo so grossly overpriced, it doesn't bother to list it in some search results. In fact when I searched for Masimo pulse oximeter by name, it only came up fifth. 

Also, there's nothing remarkable about Masimo's product even though it sells for about six times the market price. Accuracy certainly isn't a factor. It's displays two digits on a tiny display just like all the other products, that's a 1% accuracy, which is fine for that purpose. There's also deception in this claim. 

• Clinically Proven Technology: Powered by Masimo SET, the same technology used by 9 of the top 10 US hospitals and is used to monitor more than 200 Million patients annually.

Yeah, that "same technology" is not only used by "top hospitals," it's almost certainly used in these inexpensive home ones. That's where that 200 million figure comes from for a country with about 330 million people.  It would not surprise me if it was being made in the same Chinese factories that make those $25 pulse oximeters. It looks much the same.

I've been known to criticize Apple's business tactics, but in this case I'm on Apple's side. They're battling a dishonest patent troll that sells overpriced sham products. I wish them every success.

So that's how you "research" a company? Go shopping for their products on Amazon? How utterly clueless can you be? Masimo's main customers were and continue to be hospitals and doctors--you know, medical professionals who need reliable accuracy in the devices they use instead of the $14.99 SZETGHM brand pulse oximeter on Amazon. Some of Masimo's pulse oximetry devices top $2,000. They were virtually unknown on the consumer side of the business until people started looking for high quality pulse oximeters when Covid hit. You claim Masimo sells overpriced sham products based on your vast experience reading Amazon product pages--and never mind the doctors and clinicians who are Masimo's main customers, 'cause what do they know compared to you? Are you a professional clown or do you just play one when you post? 

charlesn

I don't know if Kiani will ultimately prevail or not, but with a $100 million price tag and counting, this will be a pyrrhic victory even if he does win. First, I believe Apple will find a redesign for Watch 10 and forward that doesn't infringe--I do not believe they will pay Masimo a licensing fee. Masimo will get something for past infringement, but will it be enough to even cover legal fees in pursuing this case? I"m not so sure. As for his feeling that this will prove to other small companies that you can win against Apple, I think this case sends exactly the opposite message. It proves the extraordinary time and war chest needed to even consider going against Apple. How many small companies have $100 million laying around--almost an entire year's earnings in the case of Masimo--to fight Apple in court for years for a "victory" that may end up costing them more than they ever see in payments? 

daven

Masimo is a $6 billion company. Quit trying to play the ‘poor me, I’m being picked on’ card.

tht

Really hate it when a company's stock market valuation is used as a metric for how big a big company is. The stock market valuation is meaningless, even to investors. Masimo had about $2b in revenue in 2022, 1.3b of which are medical devices and components. 0.7b is "non-healthcare". I presume their patent licensing is a significant chunk of that. They will have about 0.15b in profit. So, those patent litigation wins as reported by the DOJ represent a good fraction of Masimo's revenue.

Strategically, Kiani wants to enter the consumer health/fitness device markets going into the future, with such things as wrist watches, and with a purchase of a headphone company, audio devices. 

There are obviously a lot of companies with smart watches with health related products and health related features in headphones will be coming, Not a coincidence that a litigious company like Masimo is suing Apple. There will be a period of patent litigation as tech gadgets get more and more health related features. Medical device companies with patent portfolios will be on the lookout to sue consumer device companies. It will take a while to shake out.

s.metcalf

The problem with behemoths like Apple is they know few can afford to defend their rights in court so they exploit that to their advantage constantly.  Apple is a bully, just face it.  Pretty much always has been, even (or especially) under Jobs.  Microsoft and Google are still worse though.

phillyfanatic09

Currently, it is unclear that Masimo will prevail in the long run. Apple will completely end this if: 

1. They succeed in having the last two Masimo patents invalidated for obviousness.
2. They can engineer around the patents through software or hardware. Apple obviously prefers the former as hardware changes leaves Apple unable to sell older watches. Apple would have to pay damages in this case but in no way will they pay the $3B dollars that Masimo wants.
3. The ITC import ban will also likely go away as Masimo does not have a significant domestic industry to be protected. That is part of Apple’s appeal there.

Overall, Masimo may get money for past infringement but they also may get nothing. A complete victory seems very unlikely.

chasm

Given that the first jury was prepared to give Apple the win, I suspect Masimo will ultimately lose this case. Apple will take the heat off through a software patch or a sensor change in the next Apple Watch series, or the remaining Masimo patents will be invalidated.

When this case is finally resolved, I suspect Apple will be found not to have violated any specific Masimo patents, since the basic premise of light-sensor pulse oximeters has been around for decades.

Does that make Masimo a patent troll? No, but I do think they are letting visions of profits override their reasoning. It’s funny how Masimo hasn’t bothered suing any other smartwatch makers, though they are likely to also have pulse oximeters …

anonymouse

inkling said:

Also, there's nothing remarkable about Masimo's product even though it sells for about six times the market price. Accuracy certainly isn't a factor. It's displays two digits on a tiny display just like all the other products, that's a 1% accuracy, which is fine for that purpose. 

That's actually the precision of the device, the accuracy would be how far ± the reading is off the actual level.

AppleZulu

Kiani says he’s spending huge sums ostensibly to fight the good fight against Apple on behalf of small companies everywhere. But as noted in this article, we see Kiani has a lucrative litigious track record, where his legal bills have a great ROI. 

Could it be instead that Apple is fighting the good fight against a patent troll, on behalf of technology companies, big and small, everywhere?

It’s noteworthy that most of a jury has already sided with Apple rather than Masimo in this case. 

Leading up to the momentary import ban, Masimo said they were waiting by the phone for Apple to call and offer to settle, but the phone didn’t ring. Apple has piles of cash and could easily make this go away, but they don’t appear willing to do that. They’ve settled other cases where they weren’t actually wrong, because the fight wasn’t worth it, so they must think this fight is worth it. Unlike most small tech companies, Apple does have deep pockets, which can be used to outspend patent trolls on lawyer bills. 

(Remember the lawsuit about Apple slowing processes on older phones with weakened batteries? They settled even though they were doing the opposite of what they were accused of. A customer will hang on to a slow device a lot longer than they would a device that keeps crashing, which is what the intentional slowing prevents. All lithium batteries degrade over time and can no longer provide enough power for peak processor demand. It’s a fact. When the processor asks for more power than it can get, the device crashes. Slow the process so that power demand spreads out and falls within battery capacity, then the process will complete without crashing. They were accused of engineering planned obsolescence when they were actually delaying obsolescence. They settled, rather than keep tying to get people to understand that.)

In this case, Apple won’t settle, because they believe they’re in the right, and caving will only embolden other patent trolls to come after them, costing Apple and their customers more money, while making smaller companies far more vulnerable to the same sort of highway robbery. 

If Masimo spends $100 million and more, but gets nothing for it, that changes the trolling calculus entirely. 

cpsro

Fortunately patents have a limited duration.

spheric

daven said:

Masimo is a $6 billion company. Quit trying to play the ‘poor me, I’m being picked on’ card.

They’re actually playing the “we’ve been building these medical devices for decades; you can infringe our turf, but you’re not gonna do it without paying your dues” card. 

gprovida

Apple is reluctant to lose control of critical tech. Masimo’s demands that its patent wins require using Masimo’s patents guaranteeing big buck for Masimo in the future. Therefore if Apple can’t disqualify Masimo’s patents, then it will replace the tech going forward. 

I fail to see Masimo’s as some kind of crusader but rather a shrewd company intent on currying favor in public while raking in the big bucks. I hope Apple succeeds in its efforts since their long term goal is blood sugar testing to guide insulin injection. If Masimo’s offers better tech than Apple or other develop Apple would prob adopt with some leverage on cost negotiation. 

I get Deja vu of Samsung, Qualcomm, … patent fights. 

9secondkox2

inkling said:

Most of this articles seems to be about the money Masimo makes out of patent settlements. Is Masimo a serious company or is it a patent troll that keeps up a charade of selling medical products.

To research that I checked Amazon.

• Their Masimo MightySat Fingertip Pulse Oximeter currently sells for $269.99. It has a 4.5 star rating and has sold a mere 50+ in the past month. That's not much business for a company that's spending $100 million on lawyers. They have no business to save worth speaking of.
• A similar looking Innovo Deluxe Fingertip Pulse Oximeter has a slightly better 4.7 star rating, sells for $34.99 and has sold 5K+ in the past month. Indeed, Amazon has page after page filled with pulse oximeters selling for between $25 and $45. Masimo's is such a far outliner I could not find another even close to its price.

On point 1, you have to wonder if Masimo's dismal sales of that particular item are due to Apple's watch doing the same thing or wether they just didn't market it properly/make a good product, etc. 

One point 2, cheap sells more than expensive. Not rocket. science.

but the bottom line. in all of this, whether Masimo makes their big money on patent royalties or not, they have valid, hard-earned patents and deserve to get paid for licensing. Just because they MAY not make. a huge business out of. it does not justify others stealing their IP without licensing and gong forward. If Apple did indeed violate these patents - and it sure looks that way, they need to pay up, license the patent properly and let the owner enjoy the fruit of their labors. It doesn't matter if it's Google, Microsoft, Al Queada, Apple, or the pope doing this. Patents exist for a reason and they should be honored and defended.

tzx4

I'm picking up Sweeney and Fortnite vibes here.