5 ms·

There's a lot more to this story than just pulse oximeters. Years ago Apple approached the company about an acquisition, but presumably this was in bad faith; t

There's a lot more to this story than just pulse oximeters. Years ago Apple approached the company about an acquisition, but presumably this was in bad faith; they ended up looting the company for information gained during those talks, as well as hiring away 20 of their employees. https://www.latimes.com/business/technology/story/2023-10-05/column-joe-kiani-masimo-apple-watch-pulse-oximeter-lawsuit https://www.latimes.com/business/technology/story/2023-10-05...

bigmattystyles 3y ago
Why is hiring from a company an issue. The company may have a point about their IP being looted but they don’t own these employees. Assuming the employees only brought their know how and not actual technology and software, I don’t see the issue here. Would they not be allowed to use their expertise to develop a like system without violating the existing patent?
- bdcravens 3y ago
  Those employees can totally create a cleanroom implementation, true. That's very difficult in any domain. I could totally create software that does what my employer does, but could I do it without using any of the solutions I specifically created for them? It would be a challenge.
  - deleted 3y ago
    [deleted]
  - bdowling 3y ago
    The restrictions are only against using protectable trade secrets or patented technology. Protectable trade secrets don't include things that are generally known within an industry or that the prior employer didn't treat as a trade secret (e.g., didn't take steps to prevent from becoming generally known).
    - bdcravens 3y ago
      Sure. In my case, I'm thinking about problems I've solved that there are no known solutions for, that I essentially had to invent while on the job.
- itg 3y ago
  Hard to feel bad for Apple here, since they do the same thing https://www.reuters.com/legal/litigation/apple-lawsuit-says-stealth-startup-rivos-poached-engineers-steal-secrets-2022-05-02/ https://www.reuters.com/legal/litigation/apple-lawsuit-says-...
  - renewiltord 3y ago
    > Apple's Friday lawsuit said Mountain View, California-based Rivos has hired over 40 of its former employees in the past year to work on competing "system-on-chip" (SoC) technology, and that at least two former Apple engineers took gigabytes of confidential information with them to Rivos. Well you can't go around taking your employer's data with you.
    - bdcravens 3y ago
      That also includes the employer's data you keep in your head.
      - jrockway 3y ago
        I was recently reading the New York Court of Appeals ruling on People v Aleynikov, which involves someone copying Goldman Sachs's software and taking it to a new startup. New York has a criminal offense called "Unlawful use of secret scientific material" that covered this case. Aleynikov argued that it only covers tangible representations of scientific material (which the court ruled covers computer source code), and that computer files are not tangible. The court disagreed, but did say: Defendant contends that if "tangible" means "having physical form," then the statutory term "tangible reproduction" would involve a redundancy because all computer data is stored in some physical medium. We disagree. Someone with a photographic memory who memorized a piece of source code would not be making a tangible reproduction of the code (see generally Bottone, 365 F2d at 393 [referring to a hypothetical "case where a carefully guarded secret formula was memorized, carried away in the recesses of a thievish mind and placed in writing only after a boundary had been crossed"]). It is true that copying secret scientific material solely by memorizing it would not fall under the statute for a separate reason, i.e., that{*31 NY3d at 400} it would not be "writing, photographing, drawing, mechanically or electronically reproducing or recording such secret scientific material" (Penal Law § 165.07). Nevertheless, the word "tangible," as we interpret it, does not introduce redundancy; it adds a modest element to "reproduction," serving to emphasize that the crime consists in making a physical, not a mental, copy of secret scientific material. (From: https://www.nycourts.gov/reporter/3dseries/2018/2018_03174.htm https://www.nycourts.gov/reporter/3dseries/2018/2018_03174.h...) So anyway, you're not violating New York State law if you remember how your system works and you take it to your next employer. Contracts you sign and patent law still exist, however.
- smoldesu 3y ago
  > Would they not be allowed to use their expertise to develop and like system without violating the existing patent? Maybe, but that's kinda the point of this lawsuit. As Apple implemented it, they did violate portions of the patent. Not every part of their claim was considered a violation, but some of it certainly was: > As a result, the Commission finds that Apple has violated section 337 as to claims 22 and 28 of the ’502 patent and claims 12, 24, and 30 of the ’648 patent. https://www.usitc.gov/system/files?file=secretary/fed_reg_notices/337/337_1276_notice10262023sgl.pdf https://www.usitc.gov/system/files?file=secretary/fed_reg_no...
  - bdowling 3y ago
    Note: To infringe a patent, the allegedly infringing activity has to match every element of at least one claim of the patent.
- harimau777 3y ago
  If I'm understanding it correctly, the assertion is that Apple feigned interest in collaboration as a pretext to put themselves in a position to hire away employees. If that's true, then it's certainly dishonest even if it isn't illegal. It could also be concerning if large companies can smother smaller competitors in the cradle.
  - m3kw9 3y ago
    This happens all the time, imagine every deal goes thru, it doesn’t, and there will be meetings. Could be that their asking price was too high and it went thru and Apple hires some of them instead(legally), but the employees was dumb enough to use their knowledge of their previous product too much
  - Someone 3y ago
    > the assertion is that Apple feigned interest in collaboration as a pretext to put themselves in a position to hire away employees If that was their plan, and they weren’t stupid, that will be extremely hard to prove. Reason: if their plan was “we want to have this tech” and started talks in good faith that led nowhere, the same easily could have happened. It’s a standard negotiation tactic to let ‘them’ know/think that you have alternatives, so during negotiations, Apple may have hinted that they would do it themselves if negotiations broke down, with the side effect of informing personnel of Masimo that opportunities might become available if negotiations broke down. If, after negotiations broke down, Apple really decided “let’s do it ourselves” and put up job descriptions, I don’t think they’d have to explicitly call Masimo personnel to apply for those jobs, as they’ll know there are good career opportunities there. > It could also be concerning if large companies can smother smaller competitors in the cradle. I think that’s unavoidable. If SmallCo has a feature in their product that BigCo doesn’t have, commenters will deride them for it. If they add it in basic form, commenters will also deride them for it, and if they add it in superior form, commenters will also deride them for it, calling it Sherlocking. The only way to prevent that would be to pay SmallCo for permission to clone the feature. If SmallCo, knowing that, sets an unrealistic price, what can BigCo do, other than ending negotiations and building the feature themselves? If they don’t build it at, commenters will deride them for it, so that’s not an option.
- HumblyTossed 3y ago
  > Why is hiring from a company an issue. > The company may have a point about their IP being looted ... > Would they not be allowed to use their expertise to develop a like system without violating the existing patent? I mean, come on. Taking the IP and the employees ...
- gumby 3y ago
  In particular in California where non-competes are illegal and unenforceable (no idea if Massimo had noncompetes, just underlining your point). However the basis of the suit was fraudulent representation: Apple lost on the basis that they were found to be pretending to buy the company or license the tech. Have no idea if this is Apple's typical M.O. though I doubt it solely on the fact that these suits are rarely brought and they would be a juicy target. I saw Google do this to a company I was loosely connected to. Because they were in acquisition discussions I was more closely involved than normal (but not in any inter-party meetings). My interpretation of events was incompetence on Big G's acquisition team rather than actual malice. It was a big deal for the startup but rather small for G and it didn't look like they had sent the A team over to do the deal. I have no idea what really happened with Massimo/Apple beyond a few reports in the press.
- jacquesm 3y ago
  Typical part of an acquisition process is a 'terms sheet' and usually terms sheets contain very explicit non-poaching clauses to stop the company that says they want to acquire doing an end run around the process by bulk hiring the people instead of acquiring the stock.
  - deepsun 3y ago
    Non-poaching agreements are illegal in California (they are considered no-compete agreements that harm competition).
renewiltord 3y ago
This is why we need unions. That way Apple wouldn't have been able to hire away those 20 people.
- explaininjs 3y ago
  "We need unions... so that employees can't have the opportunities they'd have otherwise to be fairly compensated for their know-how by the companies most able to bring their talents to market." Isn't really a slam dunk IMO.
  - Wytwwww 3y ago
    I would assume that was certainly sarcasm.
    - explaininjs 3y ago
      Could be. It's exceptionally hard to tell with union advocates. My partner is in one and they've done nothing but screw her over at every twist and turn, yet many in her industry still speak (genuinely) fondly of them.
      - unshavedyak 3y ago
        Unions are like government. They can and do serve a very important, often necessary, role. However they can also be easily corrupted without special and meticulous care. We as a society seem especially bad about the burden of collective accountability over government and unions. IMO they’re essential, but the state we end up in feels inevitable. I’m quite a pessimist as a result.
        explaininjs 3y ago
        Unions are like government. In both, the most corrupt and power hungry individuals will see a way to get a ton of money from the masses by grandstanding their way to the top, and once there will move on to the next easy cash: selling out their ability to place rules on the people that pay them to the highest bidders. I once went to a bar in Portland that had a ~20% discount if you showed them your union card when asked. If you said you didn't have a union, they'd respond: "no, you don't have a union... yet!" with a big grin on their face. Well intentioned, I'm sure. But overhearing the sheer volume of bike shedding that went on in conversations there regarding matters entirely adjacent to the folks' actual work, I can't say I want any part of it.
stefan_ 3y ago
People don't like to hear this but employees leaving for the (would be) competition with their knowledge is sort of the entire basis of capitalism and progress and fully intentional.
- WaxProlix 3y ago
  The basis of capitalism is the organization of the economy around capital. I don't know what the basis of progress is, but 'the proliferation of knowledge' sounds like it might be a passable start.
tw04 3y ago
This isn’t the first time they’ve done it either, it’s becoming a trend with them. They lowball offer and then pull out after having the details they need to steal your tech. They’re banking on you going bankrupt before you can win a lawsuit against them.
deleted 3y ago
[deleted]
crazygringo 3y ago
A large part of the fault here lies with Masimo however. This is capitalism -- it's your job to protect your company's information and trade secrets, and to pay your employees enough and treat them well enough so they don't go to a competitor. Everyone knows a potential acquisition might fall through or not be genuine in the first place, and that any potential acquirer can turn into a potential competitor in an instant. That's just business 101. And it's not like Masimo is some mom and pop business that can't compete with Apple's salaries on 20 key employees. It had revenue of $1.24 billion last year, so come on. All of this clearly hinges on whether Masimo had Apple actually stole trade secrets (presumably violating an explicit NDA or similar that Apple reps had signed), and whether Apple infringed on patents. The result on stolen trade secrets was a hung jury, and we'll wait for the final answer on patent infringement after presumably a sequence of appeals. But the idea that Apple was "looting" was not confirmed by a jury, and "hiring away" treats these employees like property, which they are not. They are perfectly free to go work for Apple, and they should if Apple gives them a better deal.
- FireBeyond 3y ago
  Apparently most of the fault here is not Apple's, according to you. Hell, even though they were found guilty of patent infringement, you're still, "It's not been shown that they actually did... we have to wait for the appeals!"
  - crazygringo 3y ago
    There's nothing hilarious, please don't be insulting. Everybody knows that major patent trials often get reversed on appeal, and sometimes reversed yet again. Precisely because they're not clear-cut, because clear-cut cases often just get settled before going to court at all. And yes, the jury trial already couldn't decide against Apple in terms of trade secrets. So the idea that Apple is obviously the bad guys here simply doesn't hold water. And they certainly aren't in terms of hiring employees from a competitor, because that's just what corporations do to do each other. Maybe this jury decided correctly on patent infringment, maybe they didn't. Patent infringement cases can be notoriously difficult to determine. If this one gets upheld after a couple of appeals, then it's a lot easier to say Apple was in the wrong.
sireat 3y ago
So again SV was based on real life: https://silicon-valley.fandom.com/wiki/Runaway_Devaluation https://silicon-valley.fandom.com/wiki/Runaway_Devaluation
vaxman 3y ago
Until/unless people start writing their own operating systems, developing their own hardware again and educating Congress to force interoperability AND SECURITY standards, this will definitely remain a Thing. [ There is a pervasive feeling, dating back to the late 1970s, that engineers are not business people/risk takers and have therefore volunteered for a safer, but financially asymmetrical, symbiotic relationship with the platform OEM (and are history if they "get in the way" --much like the plant watering person who pulls up out front in a van and maybe spills some water on the floor while servicing the geraniums in the boardroom). The conflict, of course, is that many engineers aspire to be business people/risk takers and rarely understand why the platform OEMs won't directly support their efforts. ] https://www.youtube.com/watch?v=C9XyXLiTpI4 https://www.youtube.com/watch?v=C9XyXLiTpI4

bigmattystyles 3y ago

Why is hiring from a company an issue. The company may have a point about their IP being looted but they don’t own these employees. Assuming the employees only brought their know how and not actual technology and software, I don’t see the issue here. Would they not be allowed to use their expertise to develop a like system without violating the existing patent?

bdcravens 3y ago
Those employees can totally create a cleanroom implementation, true. That's very difficult in any domain. I could totally create software that does what my employer does, but could I do it without using any of the solutions I specifically created for them? It would be a challenge.
- deleted 3y ago
  [deleted]
- bdowling 3y ago
  The restrictions are only against using protectable trade secrets or patented technology. Protectable trade secrets don't include things that are generally known within an industry or that the prior employer didn't treat as a trade secret (e.g., didn't take steps to prevent from becoming generally known).
  - bdcravens 3y ago
    Sure. In my case, I'm thinking about problems I've solved that there are no known solutions for, that I essentially had to invent while on the job.
itg 3y ago
Hard to feel bad for Apple here, since they do the same thing https://www.reuters.com/legal/litigation/apple-lawsuit-says-stealth-startup-rivos-poached-engineers-steal-secrets-2022-05-02/ https://www.reuters.com/legal/litigation/apple-lawsuit-says-...
- renewiltord 3y ago
  > Apple's Friday lawsuit said Mountain View, California-based Rivos has hired over 40 of its former employees in the past year to work on competing "system-on-chip" (SoC) technology, and that at least two former Apple engineers took gigabytes of confidential information with them to Rivos. Well you can't go around taking your employer's data with you.
  - bdcravens 3y ago
    That also includes the employer's data you keep in your head.
    - jrockway 3y ago
      I was recently reading the New York Court of Appeals ruling on People v Aleynikov, which involves someone copying Goldman Sachs's software and taking it to a new startup. New York has a criminal offense called "Unlawful use of secret scientific material" that covered this case. Aleynikov argued that it only covers tangible representations of scientific material (which the court ruled covers computer source code), and that computer files are not tangible. The court disagreed, but did say: Defendant contends that if "tangible" means "having physical form," then the statutory term "tangible reproduction" would involve a redundancy because all computer data is stored in some physical medium. We disagree. Someone with a photographic memory who memorized a piece of source code would not be making a tangible reproduction of the code (see generally Bottone, 365 F2d at 393 [referring to a hypothetical "case where a carefully guarded secret formula was memorized, carried away in the recesses of a thievish mind and placed in writing only after a boundary had been crossed"]). It is true that copying secret scientific material solely by memorizing it would not fall under the statute for a separate reason, i.e., that{*31 NY3d at 400} it would not be "writing, photographing, drawing, mechanically or electronically reproducing or recording such secret scientific material" (Penal Law § 165.07). Nevertheless, the word "tangible," as we interpret it, does not introduce redundancy; it adds a modest element to "reproduction," serving to emphasize that the crime consists in making a physical, not a mental, copy of secret scientific material. (From: https://www.nycourts.gov/reporter/3dseries/2018/2018_03174.htm https://www.nycourts.gov/reporter/3dseries/2018/2018_03174.h...) So anyway, you're not violating New York State law if you remember how your system works and you take it to your next employer. Contracts you sign and patent law still exist, however.
smoldesu 3y ago
> Would they not be allowed to use their expertise to develop and like system without violating the existing patent? Maybe, but that's kinda the point of this lawsuit. As Apple implemented it, they did violate portions of the patent. Not every part of their claim was considered a violation, but some of it certainly was: > As a result, the Commission finds that Apple has violated section 337 as to claims 22 and 28 of the ’502 patent and claims 12, 24, and 30 of the ’648 patent. https://www.usitc.gov/system/files?file=secretary/fed_reg_notices/337/337_1276_notice10262023sgl.pdf https://www.usitc.gov/system/files?file=secretary/fed_reg_no...
- bdowling 3y ago
  Note: To infringe a patent, the allegedly infringing activity has to match every element of at least one claim of the patent.
harimau777 3y ago
If I'm understanding it correctly, the assertion is that Apple feigned interest in collaboration as a pretext to put themselves in a position to hire away employees. If that's true, then it's certainly dishonest even if it isn't illegal. It could also be concerning if large companies can smother smaller competitors in the cradle.
- m3kw9 3y ago
  This happens all the time, imagine every deal goes thru, it doesn’t, and there will be meetings. Could be that their asking price was too high and it went thru and Apple hires some of them instead(legally), but the employees was dumb enough to use their knowledge of their previous product too much
- Someone 3y ago
  > the assertion is that Apple feigned interest in collaboration as a pretext to put themselves in a position to hire away employees If that was their plan, and they weren’t stupid, that will be extremely hard to prove. Reason: if their plan was “we want to have this tech” and started talks in good faith that led nowhere, the same easily could have happened. It’s a standard negotiation tactic to let ‘them’ know/think that you have alternatives, so during negotiations, Apple may have hinted that they would do it themselves if negotiations broke down, with the side effect of informing personnel of Masimo that opportunities might become available if negotiations broke down. If, after negotiations broke down, Apple really decided “let’s do it ourselves” and put up job descriptions, I don’t think they’d have to explicitly call Masimo personnel to apply for those jobs, as they’ll know there are good career opportunities there. > It could also be concerning if large companies can smother smaller competitors in the cradle. I think that’s unavoidable. If SmallCo has a feature in their product that BigCo doesn’t have, commenters will deride them for it. If they add it in basic form, commenters will also deride them for it, and if they add it in superior form, commenters will also deride them for it, calling it Sherlocking. The only way to prevent that would be to pay SmallCo for permission to clone the feature. If SmallCo, knowing that, sets an unrealistic price, what can BigCo do, other than ending negotiations and building the feature themselves? If they don’t build it at, commenters will deride them for it, so that’s not an option.
HumblyTossed 3y ago
> Why is hiring from a company an issue. > The company may have a point about their IP being looted ... > Would they not be allowed to use their expertise to develop a like system without violating the existing patent? I mean, come on. Taking the IP and the employees ...
gumby 3y ago
In particular in California where non-competes are illegal and unenforceable (no idea if Massimo had noncompetes, just underlining your point). However the basis of the suit was fraudulent representation: Apple lost on the basis that they were found to be pretending to buy the company or license the tech. Have no idea if this is Apple's typical M.O. though I doubt it solely on the fact that these suits are rarely brought and they would be a juicy target. I saw Google do this to a company I was loosely connected to. Because they were in acquisition discussions I was more closely involved than normal (but not in any inter-party meetings). My interpretation of events was incompetence on Big G's acquisition team rather than actual malice. It was a big deal for the startup but rather small for G and it didn't look like they had sent the A team over to do the deal. I have no idea what really happened with Massimo/Apple beyond a few reports in the press.
jacquesm 3y ago
Typical part of an acquisition process is a 'terms sheet' and usually terms sheets contain very explicit non-poaching clauses to stop the company that says they want to acquire doing an end run around the process by bulk hiring the people instead of acquiring the stock.
- deepsun 3y ago
  Non-poaching agreements are illegal in California (they are considered no-compete agreements that harm competition).

renewiltord 3y ago

This is why we need unions. That way Apple wouldn't have been able to hire away those 20 people.

explaininjs 3y ago
"We need unions... so that employees can't have the opportunities they'd have otherwise to be fairly compensated for their know-how by the companies most able to bring their talents to market." Isn't really a slam dunk IMO.
- Wytwwww 3y ago
  I would assume that was certainly sarcasm.
  - explaininjs 3y ago
    Could be. It's exceptionally hard to tell with union advocates. My partner is in one and they've done nothing but screw her over at every twist and turn, yet many in her industry still speak (genuinely) fondly of them.
    - unshavedyak 3y ago
      Unions are like government. They can and do serve a very important, often necessary, role. However they can also be easily corrupted without special and meticulous care. We as a society seem especially bad about the burden of collective accountability over government and unions. IMO they’re essential, but the state we end up in feels inevitable. I’m quite a pessimist as a result.
      - explaininjs 3y ago
        Unions are like government. In both, the most corrupt and power hungry individuals will see a way to get a ton of money from the masses by grandstanding their way to the top, and once there will move on to the next easy cash: selling out their ability to place rules on the people that pay them to the highest bidders. I once went to a bar in Portland that had a ~20% discount if you showed them your union card when asked. If you said you didn't have a union, they'd respond: "no, you don't have a union... yet!" with a big grin on their face. Well intentioned, I'm sure. But overhearing the sheer volume of bike shedding that went on in conversations there regarding matters entirely adjacent to the folks' actual work, I can't say I want any part of it.

stefan_ 3y ago

People don't like to hear this but employees leaving for the (would be) competition with their knowledge is sort of the entire basis of capitalism and progress and fully intentional.

WaxProlix 3y ago
The basis of capitalism is the organization of the economy around capital. I don't know what the basis of progress is, but 'the proliferation of knowledge' sounds like it might be a passable start.

tw04 3y ago

This isn’t the first time they’ve done it either, it’s becoming a trend with them. They lowball offer and then pull out after having the details they need to steal your tech. They’re banking on you going bankrupt before you can win a lawsuit against them.

deleted 3y ago

[deleted]

crazygringo 3y ago

A large part of the fault here lies with Masimo however. This is capitalism -- it's your job to protect your company's information and trade secrets, and to pay your employees enough and treat them well enough so they don't go to a competitor. Everyone knows a potential acquisition might fall through or not be genuine in the first place, and that any potential acquirer can turn into a potential competitor in an instant. That's just business 101. And it's not like Masimo is some mom and pop business that can't compete with Apple's salaries on 20 key employees. It had revenue of $1.24 billion last year, so come on. All of this clearly hinges on whether Masimo had Apple actually stole trade secrets (presumably violating an explicit NDA or similar that Apple reps had signed), and whether Apple infringed on patents. The result on stolen trade secrets was a hung jury, and we'll wait for the final answer on patent infringement after presumably a sequence of appeals. But the idea that Apple was "looting" was not confirmed by a jury, and "hiring away" treats these employees like property, which they are not. They are perfectly free to go work for Apple, and they should if Apple gives them a better deal.

FireBeyond 3y ago
Apparently most of the fault here is not Apple's, according to you. Hell, even though they were found guilty of patent infringement, you're still, "It's not been shown that they actually did... we have to wait for the appeals!"
- crazygringo 3y ago
  There's nothing hilarious, please don't be insulting. Everybody knows that major patent trials often get reversed on appeal, and sometimes reversed yet again. Precisely because they're not clear-cut, because clear-cut cases often just get settled before going to court at all. And yes, the jury trial already couldn't decide against Apple in terms of trade secrets. So the idea that Apple is obviously the bad guys here simply doesn't hold water. And they certainly aren't in terms of hiring employees from a competitor, because that's just what corporations do to do each other. Maybe this jury decided correctly on patent infringment, maybe they didn't. Patent infringement cases can be notoriously difficult to determine. If this one gets upheld after a couple of appeals, then it's a lot easier to say Apple was in the wrong.

sireat 3y ago

So again SV was based on real life: https://silicon-valley.fandom.com/wiki/Runaway_Devaluation https://silicon-valley.fandom.com/wiki/Runaway_Devaluation

vaxman 3y ago

Until/unless people start writing their own operating systems, developing their own hardware again and educating Congress to force interoperability AND SECURITY standards, this will definitely remain a Thing. [ There is a pervasive feeling, dating back to the late 1970s, that engineers are not business people/risk takers and have therefore volunteered for a safer, but financially asymmetrical, symbiotic relationship with the platform OEM (and are history if they "get in the way" --much like the plant watering person who pulls up out front in a van and maybe spills some water on the floor while servicing the geraniums in the boardroom). The conflict, of course, is that many engineers aspire to be business people/risk takers and rarely understand why the platform OEMs won't directly support their efforts. ] https://www.youtube.com/watch?v=C9XyXLiTpI4 https://www.youtube.com/watch?v=C9XyXLiTpI4