Davids (AliveCor, Masimo) v. Goliath (Apple): the patent infringement game *not* over; Masimo’s messy proxy fight with Politan (updated)

April 4, 2024 | by

Apple’s legal department certainly hasn’t been maxing their relaxing this year, what with DOJ and pesky upstarts taking them to court. The big one keeping them busy is the US Department of Justice (DOJ) giving Apple a dose of its own medicine in filing an antitrust lawsuit against Apple for monopolizing smartphone markets [TTA 22 Mar]. Apple also continues to fight antitrust and intellectual property (patent) infringement in Federal district courts, the US Patent and Trademark Office (USPTO)’s Patent Trial and Appeal Board (PTAB), and the International Trade Commission (ITC), brought by ECG reader AliveCor and Masimo‘s pulse oximetry reader and software. Masimo succeeded in disrupting Apple’s sales of the Watch Series 9 and Ultra 2 right at the Christmas holiday sales season [TTA 28 Dec 23], forcing Apple to disable the pulse ox feature [TTA 18 Jan] in future imports in one of Apple’s few losses.

The DOJ lawsuit does not address Apple’s copycat activities against either AliveCor or Masimo. Both companies worked with Apple.  AliveCor integrated its early KardiaBand (2016) with early Apple Watches, only to have cardiac readings integrated into the Apple Watch two years later (2018). Masimo and Apple were in mid-stages of a 2021 partnership that Apple broke off, but Masimo then accused Apple of hiring its employees working on the project [TTA 27 Oct 23].

AliveCor hasn’t been quite so successful as Masimo in challenging Apple, but it has been fighting Apple as a David v Goliath on multiple fronts for years. In February, AliveCor lost a round in the US District Court for the Northern District of California on the heart rate algorithm changes Apple made in 2018 that made their SmartRhythm app provided to Apple non-functional. That decision reportedly is still under seal. However, AliveCor has multiple Federal patent infringement lawsuits going against Apple. The differing rulings of the PTAB against and an ITC ruling finding for AliveCor went to the Federal circuit court level. According to CEO Priya Abani in an excellent MedCityNews article, AliveCor expects to see action on this by summer. Abani also scored Apple’s annoying (understatement) habit of IP infringement and broken partnerships. “Apple’s vast resources allow them to squash small innovators,” she said. “They have more lobbyists and lawyers on their payroll than we have employees.”

AliveCor and Masimo aren’t the only ones battling Apple. In the MedCityNews article, NYU Langone cardiologist Joseph Wiesel has sued Apple on patent infringement on his atrial fibrillation app (2021), also involving the USPTO, an action that is wending its way through courts now. While this Editor has long been mystified by Apple’s continued combativeness against small innovative companies when certainly it would be cheaper (and more respectful) to pay a license or settlement, FTA in MedCityNews citing Dr. Wiesel’s attorney Andrew Bochner, “Apple is known among the legal community to have a certain modus operandi: they do “not entertain any sort of real settlement discussions” and instead battle “tooth and nail” in order to wear out their rivals with fewer resources.” The shocker here is that Apple, in this case, stated to Bochner that it filed “roughly 10%” of the USPTO’s total post-grant proceedings, which take place after a patent has been granted and generally challenge a patent’s validity. One wonders whether DOJ will even take note of this anticompetitive activity involving Apple Watches in its blunderbuss action on iPhones and the US smartphone market.

Masimo itself is being roiled by a shareholder proxy fight over who controls the company. Masimo is a publicly-traded (Nasdaq) electronics company that is primarily focused on health devices, including smartwatches, and data software monitoring for the clinical and consumer markets, notably pulse oximetry.

  • Last week, activist investor group Politan Capital Management accused CEO Joe Kiani and others of mismanagement, announcing the nomination of two more independent candidates from Politan for the board of directors. Politan already has two seats on the BOD and a win here would give Politan majority control.
  • The bone being picked is Masimo’s February 2022 $1 billion acquisition of consumer audio brand Sound United (Polk, Marantz, Denon, and others) which didn’t mesh well with their health tech business. This drove down the share price from that time, with Politan subsequently swooping in and picking up shares, successfully winning two BOD seats in 2023.
  • Masimo announced on 22 March that their consumer ‘hearables’ division would be spun off.
  • Politan’s response on 26 March was to object to the spinoff on governance grounds, nominate the additional directors, and heavily criticize CEO Kiani’s ‘control and influence’. Strata-gee 26 March

Yesterday’s follow-up is that Kiani and Masimo are rebutting all of Politan’s claims and more. Strata-gee 2 April, Masimo release 1 April, MedTechDive

This Editor notes that products in their personal monitoring line combine both audio and vital signs monitoring–the (out of stock) Stork, that appears with its baby sock to be directly competitive with Owlet’s Dream Sock.

This will all play out at the yet-to-be-announced 2024 Shareholders Meeting. This Editor notes that Politan picks its battles and is rarely defeated. Our Readers may recall that Politan swooped in on Centene Corporation in late 2021, and in short order ousted long-time directors, added new friendly ones, shook up management and forcibly retired 25+ year CEO Michael Neidorff (since deceased). Masimo’s victory over Apple may go down as either not mattering much–or that Apple will be fighting a much deeper-pocketed backer that knows how to win.

Update: It gets stranger. Masimo’s Consumer (audio) division’s brand president and general manager Joel Sietsema announced on Tuesday that he is no longer with the company. He came to Masimo through the Sound United acquisition being with them for a decade. He announced his departure on LinkedIn. It was apparently a mutual decision that preceded the current turmoil. Strata-gee 4 April

AliveCor loses Patent Office ruling with Apple; three patents invalidated

December 8, 2022 | by

Apple prevails in the patent infringement suit by AliveCor–and got three AliveCor heart monitoring patents invalidated as ‘unpatentable’. In the duel of patent infringement claims dating back to May 2021 between AliveCor and Apple, the US Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) not only ruled that Apple did not infringe on AliveCor’s patents, but also threw out the AliveCor patents that were the basis for the infringement. AliveCor had sued Apple for patent infringement on their ECG technology in three US patents: No. 10,595,731 (“the ’731 patent”); No. 10,638,941 (“the ’941 patent”); and No. 9,572,499 (“the ’499 patent”) in their Apple Watches 4, 5, and 6. [TTA 29 Apr 21, 9 July 21] 

The term ‘unpatentable’ is used when the PTAB deems the patent, even when granted in the past, too obvious or too general. When the PTAB finds that, they throw out the patent and it is no longer valid.

Apple of course crowed that they developed their own patents fully on their own, and not from the time when AliveCor’s ECG monitoring was incorporated into earlier Apple Watches. Apple is up to the Series 8. AliveCor has already announced it will appeal and await the pending ruling from the International Trade Commission (ITC) to block the import of Apple Watches. The ITC’s initial determination in June was positive [TTA 28 June] and AliveCor of course is ‘cautiously optimistic’ on the Final Determination due in a few days (12 December). With the PTAB’s finding, it is far less likely that the ITC will impose an import block when AliveCor’s patents have been invalidated.  9to5Mac, Mobihealthnews

AliveCor has moved forward with its KardiaMobile series, including a credit card-sized device (left), and has enjoyed substantial investment, with an August Series F (amount undisclosed) round led by GE Healthcare. 

Patent invalidation is a danger in any patent infringement lawsuit. In 2015, Bosch Healthcare, which had bought HealthHero, an early RPM platform marketed as Health Buddy, and ViTelNet, was a serial patent challenger. They went after Philips, Viterion (while owned by Bayer), both to a draw, and won against a slew of barely-out-of-the-cradle companies forgotten by nearly all of us such as Alere Health, MedApps, Waldo Health, and Express MD Solutions. Then they sued Cardiocom in 2012 with the same expectation. Except that a year later, Cardiocom was acquired by Medtronic. Deep-pocketed Medtronic fought back hard–and by 2015, the PTAB invalidated most of Bosch’s key patents. Bosch withdrew from the US market abruptly in 2015. TTA 19 June 2015, 7 September 2015 primarily about the ongoing Teladoc-Amwell dustups

Given their funding and device development, AliveCor will likely not face Bosch’s fate, but such invalidations have consequences yet to be determined and litigated. 

The Theranos Story, ch. 59: there’s life left in the corporate corpse–patents! And no trial date in sight.

April 25, 2019 | by

You can get blood out of this. Really! The US Patent and Trademark Office (USPTO) awarded five–count ’em, five!–patents to Theranos in March and April. All of them were filed between 2015 and 2016, when the whispers of fraud were getting louder, as were the legal threats.

The five patents are:

1. Systems, devices, and methods for bodily fluid sample collection, transport, and handling
2. Systems, devices, and methods for bodily fluid sample transport
3. Systems and methods for sample preparation using sonication
4. Systems and methods for sample preparation using sonication (cell disruption)
5. Rapid measurement of formed blood component sedimentation rate from small sample volumes

The CB Insights Research article has the details on what they cover, including patent application illustrations. It’s not stated, but looking back to TTA’s many articles, in this Editor’s judgment, the heir to these patents cannot be Elizabeth Holmes or her many investors now feeling the lint in their pockets, but the company holding the last note, the $65 million (not $100 million) loan from Fortress Investment Group LLC, part of Japan’s SoftBank Group [TTA 28 Dec 17]–collateralized by the portfolio of over 70 patents. Hat tip to HISTalk 19 April

If you hunger for a deep dive into the design of Theranos’ blood analyzers that never really worked, and can appreciate that the miniLab was what “one expert in laboratory medicine called “theater … not science”, this Design World article is for you: Schadenfreude for Theranos — and satisfaction in how engineering doesn’t lie

Meanwhile, back in the US District Court in San Jose, California, we learn that the trial of Ms. Holmes (now engaged to William “Billy” Evans, a 27-year-old heir to the Evans Hotel Group, which has three West Coast resort properties and who is also a techie) and former Theranos president Ramesh ‘Sunny’ Balwani has been delayed indefinitely. Originally reported to be summer entertainment with a start date of 8 July, the judge set the next status conference for the case for 1 July, but refused to set a trial date, which means that the trial may not begin till next year. According to the San Jose Mercury News, the defense is seeking materials from the FDA and CMS, which are, according to defense lawyer, lawyer Kevin Downey, are “in many instances exculpatory.”

Ms. Holmes’ lawyers are also seeking information on the communications between John Carreyrou of the Wall Street Journal, the FDA, and CMS. In a motion filed last week, they accused Mr. Carreyrou under the guise of investigative journalism of “exerting influence on the regulatory process in a way that appears to have warped the agencies’ focus on the company and possibly biased the agencies’ findings against it.” Stat

The bubbly Ms. Holmes and Not-So-Sunny Balwani are facing Federal charges of two counts of conspiracy to commit wire fraud and nine counts of wire fraud. They each face a maximum of 20 years in prison and up to $2.7 million in fines.

A review of digital health patent slugfests and Unintended Consequences

September 7, 2016 | by

Mobihealthnews provides a recap of the past four years of patent actions pitting company against company in the hushed but deadly rings of the US Patent and Trademark Office (USPTO) and the US International Trade Commission. On the fight card: the never-ending American Well-Teladoc bout (Teladoc winning every decision so far by a knockout [TTA 18 June]–a second American Well patent being invalidated on 25 August); CardioNet vs MedTel, which the former won but has had to chase the latter out of the arena and down the street to collect; Fitbit-Jawbone which has gone both ways [TTA 27 July]; and the long trail of blood, sweat and Unintended Consequences around Bosch Healthcare’s heavyweight IP pursuit against mainly flyweight early-stage companies (not noting, as we did, their apparent ‘draws’ vs Philips and Viterion, then owned by Bayer).

The Reader will note our tracking Bosch’s activities go back to 2012 (here, here and here). Moreover, with Mr Tim Rowan of Home Care Technology, we broke the news of Bosch’s demise in June 2015, drawing the conclusion that their offense versus Cardiocom’s patents (now in Medtronic’s cardiac division) directly led to the invalidation of their key patents, IP–and the very basis of the company’s existence. See the 19 June 2015 article and our recap one year later in reviewing AW-Teladoc. (Any similar phrasing or conclusions within the Mobihealthnews article, we will leave to our Readers to decide!)

Unintended consequences: American Well loses, loses patent, to Teladoc

June 18, 2016 | by

On Tuesday, the Federal District Court of Massachusetts not only dismissed the American Well patent infringement lawsuit against Teladoc, but also invalidated American Well‘s patent, held by co-founder Dr. Roy Schoenberg since 2009. It was invalidated on the grounds that the claims in the patent were “too abstract” to be patentable and do not “amount to an inventive concept.” American Well is appealing the court decision.

Teladoc started this call-and-response in March 2015 by petitioning the USPTO (US Patent and Trademark Office) to invalidate several American Well patents. (AW claims to hold 28 patents and 22 pending applications). Shortly before Teladoc’s IPO on the New York Stock Exchange last June, American Well sued Teladoc on patent infringement. Those in the industry saw an effort to scupper the IPO. Our Editor Chrys at the time took a decidedly jaundiced view of American Well’s grounds for infringement:
This author is wondering who thought this was such a novel technology as to warrant a patent? What were they thinking? Having worked on developing unified messaging systems for a mobile phone operator at the turn of the century (now that’s a scary 15 years ago) I am just picking myself off the floor after reading this.
Surely all these functions are no more than what is in every instant messaging program, dating back to 1990s? Replace the words “medical service provider” by “friends” or “contacts” and “consultation” by “chat” or “call” it seems to me you get … Skype and Face Time and more! [TTA 9 June 15]
No matter, the result was yesterday’s double shot of a decision. In addition, three Teladoc complaints against American Well‘s patents to invalidate them are still in progress with the USPTO. A triple, anyone? MedCityNews, Teladoc press release, American Well press release
All this is despite the sobering facts that telemedicine has been unprofitable to date–and that IP wars have unintended consequences. (more…)

What’s news at the end of the week

June 11, 2015 | by

Care Innovations harmonizes seniors, Panasonic adds diabetes, Jawbone and Fitbit bite, the first EHR/PHR Hack and Concussion in Cleveland. Converging its interests in remote patient monitoring with its long-time footprint in senior housing resident monitoring (QuietCare), Intel-GE Care Innovations is testing its Health Harmony remote patient monitoring system, partnering with two California-located Front Porch communities and the Front Porch Center for Innovation and Wellbeing. The residents selected have poor chronic condition management or have returned after a discharge from a skilled nursing facility. No disclosure on projected number or duration–and it doesn’t appear that QuietCare is part of the monitoring. Release….Panasonic just bought Bayer Healthcare’s diabetes/blood glucose monitoring device unit for $1.13 billion as Bayer continues to shed non-life science businesses. While old-school prick-and-bleed monitors are being eclipsed by continuous glucose monitors (CGMs) and mobile-based devices such as Telcare in the US and in Europe, there’s plenty of market remaining in the West, and new ones in Asia and the Middle East for simple devices. It joins Panasonic’s existing blood pressure monitors. MedCityNews….Jawbone and Fitbit continue to snap at each other in court, with the former on Wednesday filing a second lawsuit on patent infringement, specifically “a wellness application using data from a data-capable band”, with the added fillip of going to the International Trade Commission, which could ban the import of Fitbit products or component parts. The 28 May lawsuit was about Fitbit’s hiring of five former Jawbone employees who allegedly stole IP. The companies between them have hundreds of patents, and as this Editor has noted in previous IP and patent troll articles, the US Patent and Trademark Office (USPTO) is not especially rigorous in ensuring that patents are not overbroad. Wonderful for the IP attorneys, but not exactly what Fitbit wants as a runup to their expected IPO next week. Wall Street Journal….Now an EHR and PHR join Hackermania Running Wild. Medical Informatics Engineering reported Tuesday that in May their server was cyberattacked, exposing PHI of patients in five clients and separately information contained in the NoMoreClipboard PHR subsidiary. POLITICO reports that this is the first recorded instance of an EHR compromise. MIE Release, POLITICO Morning eHealth….If you are in the Cleveland, Ohio area and have an interest, Concussion: A National Challenge is a free, two-day event on detection and diagnosis sponsored by the National Academy of Engineering, the Institute of Medicine, Case Western Reserve University, Metro Health and Taipei Medical University. Advance registration required.