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Comment by llm_nerd | Hacker News Reader

Initially I presumed this was a patent troll sitting on something obvious and trying to extort a big player. Reading about the actual story reveals a very different situation, and it's one in which Apple needs to pay an extremely heavy toll for scumbag behaviour.

https://www.latimes.com/business/technology/story/2023-10-05...

Apple did precisely the sorts of things that big companies are reviled for, and the only good outcome is that this costs them an enormous sum of money, and every scumbag manager involved in this behaviour lose their jobs.

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This is not obvious at all. Even Maximo's case has been whittled down from 103 instances of infringement to just 5:

> In its initial filing with the ITC, Masimo accused Apple of 103 instances of patent infringement across five different patents. However, the ITC found that Apple infringed on only two patents, covering five different instances of patent infringements

This is a borderline case and a final decision has not been made. Patent decisions are often in a gray area.

The article you link to is extremely opinionated and it's just as easy to argue the opposite. I.e. Masimo complains that Apple poached some of their employees by paying them more. Well, why wouldn't Masimo pay them what they're worth? Companies try to hire experts away from other companies all the time, and this is good because it pushes up salaries for those experts and fairly rewards them for their expertise.

Masimo isn't some mom-and-pop shop. They have revenue of $1.24 billion. They know what they're doing.

>Even Maximo's case has been whittled down from 103 instances of infringement to just 5

That's like every ITC complaint in the history of ITC complaints. You throw everything at them and your best stuff sticks. They literally need one single complaint to stick, and they have 5. That is incredibly, overwhelmingly strong.

>Companies try to hire experts away from other companies all the time

Apple didn't just hire employees away from them. There would be nothing wrong with that (well, outside of the era of non-competes, which notably Apple was a big fan of and was a legal enforcer of, making that a humorous justification). Apple engaged in a classic "brain rape" to extract value without cost.

I'm a fan of Apple, but it is an extraordinarily greedy company. Maybe the greediest company in history. That is not a good trait, and it isn't beneficial to the industry as a whole.

> Apple engaged in a classic "brain rape" to extract value without cost.

Hyperbolic, sexualized language isn't helpful here.

Why didn't Masimo counter Apple's offers and pay their employees what they are worth? I don't see how this isn't Masimo's fault when they certainly had the money to do it.

I know lots of cases where rival companies tried to hire engineers with highly domain-specific expertise away from rivals and failed, because those rivals would counter offers and provided a great, supportive work environment. If Masimo failed to do that, then that's their own fault.

I side with the employees here. Good on them for knowing their worth.

> Why didn't Masimo counter Apple's offers and pay their employees what they are worth?

Was Apple paying them what they were worth, or did they pay them more than they were worth in order to damage Masimo? I don't think we know enough to say one way or the other. There must be some level at which poaching employees with inflated salaries crosses the line into anticompetitive territory.

Masimo is a profitable company, but that doesn't mean they can survive a bidding war against Apple.

They’re worth what precisely what someone is willing to pay them. Their expertise is probably more valuable for Apple than Masimo. It would make sense for them to be able to work at Apple then.

Not if, for example, equally qualified engineers not working for Masimo are not offered the same salaries.

Of course something like this is not easy to prove.

They’ve already spent >60 million just on legal fees.

Somehow I very strongly doubt they’d have spent that much just paying their employees more.

Alternatively, someone at Apple thought "we should add one of those pulse ox thingies like they've used in the doctor's office for the last 50 years into our next watch", saw that Masimo was a player in the space, met with them, and then decided they'd rather do it themselves.

This is not something Masimo invented themselves. The class of devices existed for decades before Masimo even existed. I'm not saying that Apple's in the right here -- I have no inside information giving me more perspective than anyone else reading this -- but it's far from clear that they did anything wrong.

> met with them, and then decided they'd rather do it themselves

..., headhunted Masimo engineers, and hired them to reimplement a pulse-ox device.

> Masimo and Apple began their relationship in 2013, when Apple discussed potentially integrating Masimo’s sensing technology into future Apple products. Internally, Apple executives debated the idea of buying Masimo and making its chief executive a vice president, according to documents made public at a later trial. But Apple ultimately decided against it because “acquisitions of this size aren’t our style,” an email reads.

> Instead of buying Masimo, Apple ended up hiring Masimo engineers and began working on the technology itself, Masimo later said.

https://www.wsj.com/tech/apple-to-halt-watch-sales-as-it-pre...

Basically what 100% of the AI companies are doing right now.

From an employee's point of view, I'm 100% OK with that. If Apple wants to throw money at an engineer to do the same thing they were already doing, but for Apple, then by all means do so. I don't think it's at all unethical to hire away employees. If it were, that'd lead to bad outcomes for those people (i.e. artificially suppressed wages).

… which is in fact something Apple was doing in the past. It's somewhat ironic when a company that gets in trouble for their anti-poaching shenanigans now gets accused of poaching.

To me, it's clear that hiring competitors' employees is not morally wrong, and for the most part it's not legally wrong either, PROVIDED those employees do not take along their prior employers' confidential information.

Agreed, and agreed, with the proviso that “confidential information” doesn’t cover the general knowledge of how something is done. For example, designing motors for Ford shouldn’t mean a lifetime ban on making motors for anyone else.

Personally, I'm against anti-poaching when Apple does it and I'm against anti-poaching when other people do it.

I am not saying this is right.

But I think it is something poetic about a company that sues and wins over Samsung for a "design patent" and uses the fact that Samsungs lawyers cannot see the difference as proof...

when that company gets hit by a ridiculous "intellectual property" lawsuit.

Said as an Apple user who has brought in a number of new Apple users, meaning I am not against Apple only against ridiculous "intellectual property" laws.

It's hard to look at pre-iPhone and post-iPhone smartphones and not see a pretty clear dividing line with significant shift in looks and functionality. I'm leery of design patents, but it's hard to say there wasn't some invention going on there.

We've had easy fingertip pulse oximetry since 1977, and Masimo was founded in 1989. It's unclear to me what in their patent is novel.

The big change with iPhone was the lack of physical keyboard, wasn't it?

The form factor square with rounded edges in itself has been used for calculators and pocket PCs long long long before iPhone hasn't it?

The big change with the iPhone was the entire concept of how a smart phone looked and worked.

Nah, Windows Mobile, Palm devices and even the Newton had virtual keyboards long before the iPhone came around. They were resistive screens with shitty operating systems that required a stylus to do anything but the lack of a physical keyboard is not the difference. Smartphone design language changed dramatically after they all started copying the iPhone.

Nor is Apple copying their tech the “kiss of death” that the article mentions, as Masimo makes primarily medical/hospital equipment. The majority of their equipment is sold to other businesses or through medical suppliers. Seeing as how they claim to own 90% of the hospital O2 monitoring market, I think they’re doing just fine.

Once again, this isn’t Apple stealing tech from Joe Shmoe. This is just standard legalistic BigCorp infighting, corporate backstabbing, brain drain/theft, etc.

Side note - I love the infant sp02 tape monitors they have, as they work incredibly well for use on adults with poor extremity perfusion. Earlobe usually works great.

> Once again, this isn’t Apple stealing tech from Joe Shmoe. This is just standard legalistic BigCorp infighting, corporate backstabbing, brain drain/theft, etc.

Conversely, if Apple feels comfortable stealing from BigCorp, they will absolutely feel comfortable stealing from Joe Shmoe, which is why this issue should be treated seriously.

Apple needs to be incentivized so that if they're sitting down with a startup and considering if they should acquire and make the founder a VP or just go about stealing the technology that they should pick the former path because they've gotten burned in the past by doing the latter.

Disclaimer: Not a lawyer

It isn't clear to me if Apple's internal team working on this was the original plan - think "embrace, extend, extinguish", or "we'll do the basics, everything else is a 'third-party opportunity'" - or if they were formed as a backstop in the event an acquisition or licensing deal didn't happen.

See also the current situation with AliveCor over ECG tech in the Apple Watch.

Bottom line, Masimo wants to be paid - which I get - but I think the case will also try to settle whether or not Apple (or anyone) can integrate these features in something that (legally speaking) isn't a medical device without paying licensing fees of some kind.

They will almost certainly settle, and very quickly in my opinion (also just a layman opinion however) because if Masimo is successful in forcing them to stop sales the next logical step would be to force them to disable the feature until a ruling is made otherwise.

Masimo is a $billions dollar company. The description of a “David and Goliath” battle is a tad misleading.

Sure, they acted scummy, but this is just typical BigCorp behavior where one huge corporation steals from another huge corporation.

They aren't the "little guy", but at the same time Apple is a $trillionX3 dollar company, so David vs Goliath seems pretty fair. It is a tiny operation relative to Apple.

What does the valuation of a company’s stock have to do with this? I keep hearing that Apple is a $3 trillion company but that is strictly a function of how investors value the company. Cash on hand is probably a better way to compare and here Apple is top dog I think.

Investors give Apple 500x more value than their opponent in this battle. I mean market cap (or maybe the more accurate enterprise value) is a pretty ordinary way or comparing the size of companies.

Apple could acquire Masimo in a stock swap and it would be barely a blip on their share dilution.

How much bigger than David was Goliath? 2x perhaps?

Apple is over 500x bigger than Masimo. 6B vs 3000B+

The amount I rounded down on Apple's market cap (32B) is over 5x bigger itself.

They're not even in the same ballpark to be just "two huge corporations"

I disagree.

> Apple, of course, is one of the largest and most powerful companies in history — it’s the first to hit a $3-trillion — that’s trillion, with a T — market cap.

Apple is at least 100 times bigger than Masimo, 500x based on the numbers in the article. Sounds David and Goliath to me.

Add in the despicable behavior and you've got a story where real life is more than fiction could do.

This is literally standard corporate playbook behavior that has been utilized since the creation of corporations. In what possible way is it “more than fiction”?

It’s still a multi-billion dollar company. At that scale, you’re not facing any real disadvantages in the legal process even against Apple unless your company is actively losing money already and you won’t have enough cash on hand to continue operating. A quick looksie at their financials indicates that is not the case here.

I don’t want to say Market Cap doesn’t matter, but man is it irrelevant to most discussions and mainly of use to PR agents that want to spin a David and Goliath story.

Also, the issue at hand is a hobby for Apple, but it’s Massimo’s bread and butter, so they ought to be willing to spend accordingly on lawyers.

If both companies are able to afford tier A law firms then the relative size difference is meaningless. An extra trillion in market cap doesn't go any further in helping Apple's case.

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