Irvine-based Masimo’s CEO open to settling Apple Watch rift
By Mark Gurman and Caroline Hyde | Bloomberg
Irvine-based Masimo Corp. Chief Executive Officer Joe Kiani, head of the medical device maker that has put Apple Inc.’s smartwatch on the brink of a US ban, said he’d be open to settling with the company.
The executive, speaking Tuesday on Bloomberg TV, said the “short answer is yes,” when asked if he’d settle, but he declined to say how much money he’d seek from Apple. Kiani said he would “work with them to improve their product.”
“They haven’t called,” he said. “It takes two to tango.”
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The International Trade Commission ruled earlier this year that the Apple Watch violates two Masimo patents related to blood-oxygen sensing. The ITC imposed an import ban on the Ultra 2 and Series 9 models that goes into effect Dec. 25.
The restriction only applies to Apple’s own retail channels. Best Buy Co., Target Corp. and other resellers can continue to offer the products. But it’s put Apple in the unusual situation of having to pull a big moneymaker off its shelves during the all-important holiday season. The Apple Watch generated about $17 billion in revenue in the last fiscal year.
“These guys have been caught with their hands in the cookie jar,” Kiani said.
The medical industry veteran said he last spoke to Apple in 2013, when the iPhone maker discussed acquiring his company or hiring him to help with its in-house technology efforts. Any settlement talks would need to include an “honest dialogue” and an apology, he said.
An Apple spokesperson said that the ruling from the ITC is erroneous and should be reversed. The company plans to appeal the decision.Still, Apple is already preparing for the ban. It announced plans to pull the devices from its e-commerce site Thursday and will do the same at its physical retail stores on Christmas Eve.
Kiani called that move a “stunt” to pressure the Biden administration to veto the order. The US president has the ability to step in and cancel an ITC injunction.
“This is not an accidental infringement — this is a deliberate taking of our intellectual property,” Kiani said. “I am glad the world can now see we are the true inventors and creators of these technologies.”
He accused Apple of hiring more than 20 of his engineers — and doubling their salaries in some cases — to get them to work on similar medical technology for its watch.
“Apple could be an example of how to do things right and do things well, and they didn’t have to steal our people,” Kiani said. “We could have worked with them.”
In a statement, Apple said its teams “work tirelessly to create products and services that empower users with industry-leading health, wellness and safety features.”
“Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers,” the Cupertino-based company said. Apple also has said it believes Masimo began the legal fight to clear the market for its own smartwatch, which the iPhone maker said is a knockoff of its device.
A lawsuit Masimo filed against Apple over the issue ended this year with a federal court jury unable to reach a decision. Six of the seven jurors sided with Apple in the case.
The tech giant is working on a software update for the Apple Watch that it believes will resolve the ITC dispute, Bloomberg News previously reported.
Kiani pushed back on that idea in the interview Tuesday.
“I don’t think that could work — it shouldn’t — because our patents are not about the software,” he said. “They are about the hardware with the software.”
Asked if the import ban could be avoided, Kiani said that if Apple manufactured the watch and its components in the US, no such import ban would be possible. In contrast, he said, Masimo builds its technology in the US.