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Apple Has a Habit of Taking Advantage of Smaller Firms’ Innovation: WSJ Report

"The truth, is these companies are blatantly copying our products or stifling competition by using invalid patents," an Apple spokeswoman told The Wall Street Journal.
Neil Campbell
Neil lives in Canada and writes about society and politics.
Published: April 21, 2023
Apple preys on the innovation of smaller firms to generate its profits, Wall Street Journal alleges
A file photo of the Apple logo through a fence at an Apple Store in San Francisco in July of 2013. A new article by The Wall Street Journal alleges the company has a long standing habit of generating its profits by preying on the innovation of smaller firms. (Image: Justin Sullivan/Getty Images)

Cornerstone of the U.S. equities market and Big Tech pinnacle Apple has a long-standing habit of taking advantage of innovation created at smaller firms through actions that some may consider anti-competitive, The Wall Street Journal states in a new article.

The accusations contained in the April 20 article are notable in that they were collected from companies that can only be considered smaller than one as large as Apple with its nearly $2.7 trillion market capitalization.

“When Apple takes an interest in a company, it’s the kiss of death,” said Joe Kiani, Chairman and CEO of Masimo Corp, a health and audio device manufacturer worth more than $10 billion at today’s prices.


Kiani told the Journal that when Apple reached out to his company in 2019, he thought it was a business opportunity for a blood oxygen sensor device his firm developed to be incorporated into the Apple Watch product line.

Much to the dismay of Masimo executives and shareholders, however, not only did a deal never transpire, but Apple began hiring Masimo engineers and even the company’s Chief Medical Officer with the enticement of doubling their salaries.

“In 2019, Apple published patents under the name of a former Masimo engineer for sensors similar to Masimo’s, documents show. The following year, Apple launched a watch that could measure blood oxygen levels,” the article reads.

When asked for comment, Apple was paraphrased as telling the Journal “that it doesn’t steal technology and that it respects the intellectual property of other companies.”

To the contrary, an Apple spokeswoman was quoted as stating, “The truth, is these companies are blatantly copying our products or stifling competition by using invalid patents.”

WSJ states that Masimo’s case is not an isolated incident, “Mr. Kiani is one of more than two dozen executives, inventors, investors and lawyers who described similar encounters with Apple.”

“First, they said, came discussions about potential partnerships or integration of their technology into Apple products. Then, they said, talks stopped and Apple launched its own similar features,” author Aaron Tilley continued.

The Journal directly alleges that, “Apple has tried to invalidate hundreds of patents owned by companies that have accused Apple of violating their patent” and paraphrased unnamed executives and lawyers “at some smaller companies” as stating that the giant will also “sometimes files multiple petitions on a single patent claim and attempts to invalidate patents unrelated to the initial dispute.”

WSJ wrote that companies in the competitive arena against Apple can only “fight back in two ways.”

One is “complaining publicly to get attention from regulators interested in Apple’s market power” and the second is filing lawsuits against Apple.

And that is exactly how the battle has unfolded. Accusations of Apple engaging in similar behavior from relatively big name firms has been emerging for years. 

In 2019, Blix, a company that developed the once-popular BlueMail app sued Apple in Federal Court alleging the company ripped off the “single sign-on system” used in BlueMail’s account logins, incorporating the features into “Sign In With Apple.”

Blix lost the case and then appealed. Reuters reported in December of 2022 that the U.S. Court of Appeals for the Federal Circuit had sided with the giant in the case.

Blix’s original suit alleged Apple engaged in a method colloquially described as “Sherlocking,”

The Sherlocking term first emerged during the Steve Jobs era and appears in WSJ’s article, described in the following way:

“The term refers to an episode about two decades ago, when Apple released a software product called ‘Sherlock’ that helped users find files on its Mac computers and perform internet searches.

After an outside company built a tool that had a few more capabilities, which it called ‘Watson,’ Apple released an updated version of Sherlock with many of the same features. According to the engineer who built Watson, which he subsequently sold, Apple co-founder Steve Jobs personally called him to defend the move.”

These types of business practices are arguably rooted in Apple’s, well, roots.

A 2017 article published in Forbes chronicled how in the 1980s, when Steve Jobs and his Apple Computers was itself a “smaller company” competing against the mighty International Business Machines (IBM), Apple stole several components of a system design and configuration from Xerox, using it to get a foothold in the market.

“Apple introduces Lisa, a $9,995 PC for business users. Many of its innovations such as the graphical user interface, a mouse, and document-centric computing, were taken from the Alto computer developed at Xerox PARC, introduced as the $16,595 Xerox Star in 1981,” the article stated.

Jobs was directly quoted at the time, “We knew they [Xerox] hadn’t done it right and that we could–at a fraction of the price.”

Walter Isaacson, author of the best selling autobiography Steve Jobs, wrote unabashedly in his book on the event, “The Apple raid on Xerox PARC is sometimes described as one of the biggest heists in the chronicles of industry.”

Isaacson quoted Jobs as stating, “Picasso had a saying–‘good artists copy, great artists steal’–and we have always been shameless about stealing great ideas.” 

“They [Xerox management] were copier-heads who had no clue about what a computer could do… Xerox could have owned the entire computer industry,” Jobs continued.

In 2010, CNBC reported that Apple, which at the time was worth a paltry $247 billion by market capitalization, had “captured $192 billion in market capitalization from its competitors” with just the then-novel iPad and iPhone.

The record is striking in terms of how absorbing critical features from competitors—even fellow giants—can result in cornering the market and collapsing competition, “The iPad doesn’t support Adobe’s popular Flash program for viewing Web video. The tablet is eating into’s Kindle e-reader.” 

CNBC added that, “Dell and Hewlett-Packard’s coming tablet will face stiff competition from the iPad, and Microsoft shelved its own once Apple’s hit the market.”

The article also explained how the iPhone had “cut into business for Research in Motion, Palm and Google, costing them $40 billion in market cap. And Nokia and Motorola – the latter could lose another 50% of its legacy cell-phone business by the fourth quarter – have given up $96 billion in market cap.”

But the Journal does concede that Apple licenses products from smaller firms and competitors from time to time. The company’s spokeswoman stated Apple had licensed as many as 25,000 patents over the last three years alone.

However, in one such case that unfolded in 2016 between Apple and a firm named AliveCor, which “announced a watchband accessory for conducting electrocardiograms that could pair with the newly released Apple Watch,” showed that the good relationships with Cupertino’s keystone are sometimes short lived.

Founder David Albert told WSJ that he met with COO Jeff Williams and demonstrated the product before being told, “We’d like to find a way to work with you, but we might compete with you.”

Although AliveCor’s product was the first “medical-device accessory for the Apple Watch approved by the Food and Drug Administration” in 2017, when Apple released its Series 4 digital watch in 2018, AliveCor’s accessory was cut.

“Around that time, Apple changed its operating system in a way that AliveCor’s hardware and software integration no longer worked with the watch. A year later, AliveCor stopped selling the Apple Watch accessory,” the Journal stated.

The spokeswoman was paraphrased as remarking that Apple had been developing its own EKG device since 2012.

AliveCor told the outlet that in the time since challenging Apple’s move in court, the company had sought to invalidate seven of its existing patents.

“Apple will talk to everybody and then try to steal the best people who are developing the technology,” alleged AliveCor Chairman Vinod Khosla.