Valencell, a Delaware-based biometrics firm with primary operations in North Carolina, filed a lawsuit against Apple on Monday accusing the company of patent infringement, deceptive trade practices, and breach of contract, all stemming from alleged dealings between the two companies during the development of the Apple Watch.
As discovered by AppleInsider's Mikey Campbell, the lawsuit filed by Valencell claims that Apple first expressed interest in its biometric technology in early 2013, with Apple's then-Senior Partnership Manager Liang Hoe initiating talks about a possible partnership to develop wrist-based heart rate monitoring. As those talks began, Valencell claims that Apple employees accessed company information via fraudulent means.
Valencell offers various white papers related to its biometric sensor solutions to the public via its website, provided that users complete a form identifying themselves. The company claims to have later discovered that multiple IP addresses assigned to Apple accessed this information after providing "fictitious names."
Prior to this discovery, Apple is alleged to have expressed great interest in licensing Valencell's technology and patents, with Valencell providing a prototype demonstration to 15 members of the Apple Watch design team. Talks progressed further, with Apple requesting delivery of Valencell products for in-house examination and testing between September 2013 and March 2014.
However, Apple never reached an agreement with Valencell to license or purchase the company's technology, and shipped the Apple Watch in April 2015 with biometric sensor capabilities that Valencell claims were improperly appropriated. Far from a misunderstanding, Valencell claims that this was Apple's plan all along, based on a strategy of bullying smaller partners and competitors that was codified in the management style of late Apple co-founder Steve Jobs. As summarized by Valencell's complaint:
Apple solicited technical information and know-how from Valencell on the false premise that it wished to license Valencell's PerformTek Technology. Apple did not have an intention of licensing Valencell's PerformTek Technology. Instead, Apple's interaction with Valencell was fueled by a business decision that the benefits of infringing upon Valencell's patented technology outweigh the risk of being caught and ultimately forced to pay damages. This practice is consistent with the statement by Apple CEO Steve Jobs that Apple has 'always been shameless about stealing great ideas.' Further, Apple is knowingly using Valencell's patented technology in an effort to achieve a licensing rate that is below a reasonable royalty.
Valencell cites U.S. Patent Nos. 8,923,941, 8,886,269, 8,929,965, and 8,989,830 in its complaint, all of which relate to wearable biometric sensing and analysis. The company is seeking a sales injunction of the Apple Watch as well as damages for "reasonable royalties" and court costs for each infringed patent. Apple has yet to respond.
Of note, Valencell has also filed a similar suit for patent infringement against Fitbit.