Introduction: The David and Goliath Battle in the Tech World

If you imagine that suing a tech giant like Apple is a simple and hassle-free task, you must become familiar with the realities of the legal costs of such cases, which can reach millions of dollars and be a heavy burden even for large companies. The legal battle between the medical technology company Masimo and Apple is a prime example of such costly and complex cases where expenses go beyond initial expectations. This conflict, which began in 2020, has not only become a major legal challenge but has also consumed a significant portion of Masimo’s financial resources. This case shows how incredibly expensive and arduous the path through the courts can be, even with significant legal victories, and what pressure it can put on smaller companies.

This article examines the details of this case and its financial dimensions, demonstrating why legal confrontation with powerful technology companies is only possible for those who possess very strong financial resources and legal strategies. We will analyze the costs Masimo has incurred over these years and the reasons for these exorbitant expenses. Furthermore, we will discuss the implications of this case for the technology market and for companies that may face such challenges in the future. Ultimately, the lesson to be learned from this legal battle is a deeper understanding of the complexities and enormous costs of the legal system in the modern technology world.

The Surge in the Masimo and Apple Lawsuit: Astronomical Costs

Since 2020, Masimo has been engaged in an extensive legal dispute with Apple, primarily centered on the blood oxygen measurement technology in the Apple Watch. This case began with accusations of trade secret theft and patent infringement, evolving into one of the most expensive legal cases in the technology industry. Masimo has regularly disclosed the costs associated with this case in its quarterly financial reports. Although the method of reporting these expenses has changed over the past five years, a close review of these reports clearly shows how expensive suing a company as large as Apple can be. These costs include fees for prominent lawyers, expert fees, extensive investigations, and other legal expenses related to the court process.

The lawsuit filed by Masimo against Apple, which was brought due to patent infringement related to blood oxygen measurement, officially commenced in 2021. After many ups and downs, it finally led to a ban on the import of specific Apple Watch models into the United States in December 2023. Following this ruling, Apple was forced to remove the blood oxygen measurement feature from its smartwatches in the U.S. market, which was a significant blow to the company. The costs Masimo incurred to pursue this case clearly demonstrate the massive financial scale of such legal battles: in 2021, Masimo spent $5.5 million; this figure increased to $28.7 million in 2022; and in 2023, it exceeded $40 million. In 2024, these costs amounted to $70 million, indicating an exponential increase in legal expenditures.

Why Is Suing Tech Giants So Expensive?

The exorbitant costs incurred by companies like Masimo when suing tech giants like Apple have multiple reasons, understanding which helps in comprehending the complexities of the legal system in the technology sector. The first, and perhaps most important, factor is the immense legal teams that large companies employ. These teams consist of the best lawyers specializing in patent and intellectual property law, who command very high fees. Every large technology company has extensive in-house legal departments employing dozens or even hundreds of lawyers, and if necessary, they engage external lawyers and reputable law firms to ensure no avenue for defeat remains.

The second reason is the lengthy duration of these cases. As observed with Masimo and Apple, a legal case can span years. Each year, court sessions, investigations, document discovery, and witness testimonies incur significant ongoing costs. Furthermore, expenses related to technical experts and industry specialists hired to analyze and confirm patent infringement claims are very high. These experts must possess deep knowledge in specialized fields and often receive substantial sums for complex analyses and court testimonies. Moreover, the “Discovery” process, which involves collecting and reviewing a vast volume of information, emails, and internal company documents, can alone cost millions of dollars, as it requires large teams of specialists and specific software to manage this volume of data.

Side Effects and Consequences of These Battles

Legal costs are not limited to direct payments to lawyers and experts. These cases also have numerous side effects and indirect consequences that can far exceed direct costs. For companies like Masimo, engaging in such battles means allocating a significant portion of managerial and executive resources to these cases. Senior managers and key engineers must spend countless hours preparing for testimonies, reviewing documents, and collaborating with the legal team, which can divert their focus from the company’s core activities, such as research and development or new product manufacturing. This diversion of human and financial resources can slow down innovation and set the company back in a competitive market.

Another significant consequence of these lawsuits is their impact on company reputation and brand. The public image of companies may suffer during these battles, especially if negative news or serious allegations emerge. Even if a company ultimately wins, these lengthy disputes can have negative impacts on relationships with customers, partners, and investors. For smaller companies attempting to innovate and compete with tech giants, the astronomical costs of these lawsuits can act as an entry barrier, preventing them from entering markets dominated by large corporations. This can lead to reduced competitiveness in the market and greater monopolization by larger companies, as smaller companies lack the capacity to withstand such legal challenges.

Conclusion: A Look into the Future

The Masimo v. Apple case, with its sky-high legal costs approaching $200 million, offers an important lesson for all tech industry players: suing a tech giant is an all-out battle only possible with strong financial and legal backing. This case demonstrated that even a smaller company, with perseverance and substantial investment in its legal department, can achieve significant victories and even compel a company as large as Apple to change its course. However, the cost of this victory has been very heavy, consuming a significant portion of Masimo’s financial resources over the years. This not only helps shed light on the hidden financial dimensions of such conflicts but also raises questions about access to justice for smaller companies against tech superpowers.

Ultimately, it can be said that legal cases in the tech world are not limited to legal and technical discussions but have transformed into a major financial game where success can only be achieved by powerful players. This trend may slow down innovation in some areas, as startups, fearing involvement in such costs, may refrain from investing in fields that might conflict with the patents of tech giants. In the future, to maintain competition and innovation in the tech industry, new solutions for resolving legal disputes will be needed to prevent exorbitant costs from being imposed on innovative and smaller companies.

Source: Zoomit