Masimo CEO Open to Resolving Dispute with Apple Watch,
Emphasizes Need for Collaboration
In an exclusive interview on Bloomberg TV, Masimo executive,
whose company, Masimo, is embroiled in a legal battle with Apple, affirmed his
openness to settling the dispute. However, he opted to keep the specific
monetary terms of a potential settlement undisclosed. Expressing a
collaborative approach, the executive stated his willingness to work with Apple
to enhance the quality of their contested product.
Communication Gap and ITC Ruling
Pointing to a lack of communication from Apple's end, the
executive noted, "It takes two to tango." The International Trade
Commission (ITC) had earlier ruled that certain Apple Watch models infringed on
two Masimo patents related to blood-oxygen sensing, leading to an import ban on
the affected models effective December 25.
Impact of Import Ban
The repercussions of the import ban are nuanced. While the restriction only affects Apple's direct retail channels, other major resellers like Best Buy and Target can continue offering the products. However, the ban presents an unprecedented challenge for Apple, necessitating the removal of a significant revenue generator during the crucial holiday season. The Apple Watch, a substantial contributor, generated approximately $17 billion in revenue in the last fiscal year.
Accusations and Lack of Communication
Accusing Apple of deliberate infringement, the executive claimed that Masimo's intellectual property had been intentionally appropriated. He further asserted that Apple had aggressively recruited over 20 of his engineers, some experiencing salary doublings, to work on comparable medical technology for the Apple Watch. Interestingly, the executive disclosed that the last communication with Apple occurred in 2013, involving discussions about potential acquisition or collaboration in technology development.
Apple's Response and Legal Stand
Apple, in response, declared the ITC ruling erroneous and announced plans to appeal the decision. A spokesperson emphasized that Apple's teams are dedicated to creating products with industry-leading health, wellness, and safety features. Additionally, Apple expressed its belief that Masimo initiated the legal battle to pave the way for its own smartwatch, which Apple deemed a knockoff of its device.
Preparing for the Ban and Allegations of Pressure
Anticipating the ban, Apple took proactive measures,
announcing the removal of the affected devices from its e-commerce site and
physical retail stores. However, the executive labeled this move a
"stunt" aimed at pressuring the Biden administration to overturn the
order. He highlighted the U.S. president's authority to veto an ITC injunction,
implying that Apple's actions were designed to influence this potential intervention.
Software Update Controversy
Apple revealed plans to address the ITC dispute through a
software update for the Apple Watch. The executive from Masimo pushed back on
this solution, asserting that the patents in question primarily concern
hardware, not software. He expressed skepticism about the efficacy of a
software-based resolution.
Manufacturing Location and Import Ban Avoidance
When questioned about the possibility of avoiding the import
ban, the executive suggested that if Apple manufactured the Apple Watch and its
components in the U.S., such restrictions would not be applicable. Drawing a
contrast, he highlighted that Masimo builds its technology domestically. This
perspective adds a layer to the ongoing debate about the localization of technology
manufacturing.
Ultimately, the conclusion to this high-stakes dispute
remains uncertain. Both companies appear resolute in their positions, and as
legal proceedings unfold, the industry watches closely, with potential
ramifications for intellectual property practices and competitive dynamics in
the burgeoning field of wearable health technology.
