Masimo claims $3.1 billion after Apple is accused of stealing trade secrets

CTOnews.com, April 19 (Xinhua) A legal dispute between Apple and pulse oximeter company Masimo has been going on for two weeks, so we know little about it because the trial was held behind closed doors. Masimo accused Apple of poaching employees and stealing trade secrets to develop Apple Watch. Masimo believes that Apple has applied for five patents for pulse oximeter using business information stolen from Masimo. Masimo seeks joint ownership of these patents and claims USD 3.1 billion (CTOnews.com Note: currently approximately RMB 21.328 billion).

Apple hired Michael O'Reilly, chief medical officer of Masimo, in July 2013, and Marcelo Lamego, chief technology officer of Cercacor, a subsidiary of Masimo, in early 2014 to develop Apple Watch. Masimo claimed that Apple deliberately poached employees, while Lamego leaked Masimo's trade secrets to Apple. Apple insists that hiring the two employees has nothing to do with their experience at Masimo, but based on their talents. Apple also said that the two former Masimo employees did not disclose Masimo's intellectual property while working for Apple Watch.

Lamego worked at Apple for only six months, but he applied for 12 patents during that time and was listed as the inventor of many future Apple patents. He did the same sensor development at Apple as he did at Masimo, which caused dissatisfaction with Masimo. Lamego was hired on the recommendation of O'Reilly, when O'Reilly warned Apple that "most of the knowledge" of Lamego was "confidential information from Cercacor or Masimo". Apple pointed to an email Lamego sent to Apple CEO Tim Cook in which he said he could "add important value to Apple" without relying on his work for Masimo. The email shows that Apple is interested in the "professional experience" he needs to develop Apple Watch sensors.

Lamego claimed that when he developed a heart rate detection algorithm for Apple Watch, he had to be "extra careful to avoid intellectual property conflicts". Lamego said that shortly after he was hired, Masimo sent a threatening letter, causing Apple to withdraw the resources provided to him. He eventually left Apple, but Masimo insisted that the information he shared with Apple during that time was crucial to the development of Apple Watch. According to Joe Kiani, CEO of Masimo, patents issued to Apple in 2019 are "based on [Masimo] things."

According to CTOnews.com, the eight-member jury hearing the case is expected to begin deliberations next week, when Apple and Masimo will conclude their legal arguments. The U.S. International Trade Commission has ruled that Apple infringed Masimo's Apple Watch patent, but Apple is defending it.