Context: “Sherlocking” refers to a technology industry phenomenon where a platform owner (often Apple) releases a new, native feature that replicates the functionality of a third-party app or service, rendering that independent app obsolete. The term originated in the early 2000s when Apple’s “Sherlock” search tool copied functionality from a third-party app named “Watson”.
What’s new: Today, one of the UK’s 100 fastest-growing privately-held technology companies (LinkedIn post), Reincubate, whose Camo camera app became a victim of an act of Sherlocking, has filed a combined antitrust and patent infringement lawsuit against Apple in the United States District Court for the District of New Jersey. Reincubate alleges unlawful monopolization by Apple, raising interoperability issues. The company also accuses Apple of infringing two of its U.S. patents. The complaint discusses in detail how Apple originally treated Reincubate as a partner, only to turn around at some point.
Direct impact:
- Apple will absolutely want to avoid a jury trial in which its allegedly anticompetitive conduct and the alleged patent infringements are at issue. There would be a risk of the combination of the accusations being stronger than the sum of the parts. It would be unusual for Apple not to seek the dismissal of the antitrust claims. It was only in Epic Games v. Apple that a procedural agreement was reached between the court and the parties not to bring certain pretrial motions.
- U.S. patents have recently become more powerful thanks to the policies of United States Patent & Trademark Office (USPTO) Director John A. Squires.
Wider ramifications:
- The antitrust part of this case is far from the first, but the combination of interoperability issues and Sherlocking makes it a novel one.
- In the same district, Apple is defending against a lawsuit by the United States Department of Justice (USDOJ or DOJ) after a motion to dismiss failed.
Camo’s CEO Aidan Fitzpatrick has published a corporate blog post on the history with Apple that led to this complaint, hinting that there’s some juicy stuff to tell but which he doesn’t want to make public for now.
Apple’s Continuity Camera feature enables users of Apple devices to use the camera of an iPhone as, for example, an external camera of a Mac.
Here’s the complaint:
The following passage from paragraph 1 of the complaint sums up the allegations of anticompetitive conduct:
Apple induced Reincubate to develop and disclose its Camo technology. But because Camo provided interoperability between iPhones and Windows computers, as well as between Android devices and Mac computers, Apple copied the technology, built it into iOS as “Continuity Camera,” and used its control over its operating systems and App Store to disadvantage that interoperable solution and redirect user demand to Apple’s own platform-tied offering. Apple’s conduct preserved its dominance in mobile operating systems and suppressed innovation that would have reduced user lock-in. As a direct result, Reincubate suffered, among other harms, the loss of its core competitive position and commercial upside from Camo after Apple induced it to prove the market and then used its OS and App Store control to copy the technology, prevent equal technical access, and redirect demand to Apple’s own bundled substitute.
These are the patents-in-suit (both entitled “Devices, systems and methods for video processing”):
The complaint contains a picture that shows Apple software chief Craig Federighi with Camo CEO Aidan Fitzpatrick at the 2023 edition of Apple’s Worldwide Developer Conference (WWDC):
Camo apparently fears that Apple might now terminate its iOS developer license. Among the remedies Camo seeks, there is a “preliminary and permanent injunction prohibiting Apple from exercising or enforcing any provision of the Apple Developer Program License Agreement that authorizes Apple to terminate, suspend, or otherwise restrict a developer’s participation in the program on the basis that the developer has filed, maintained, or participated in a patent-infringement action against Apple.”
Counsel for Camo
Hecht Partners’ David Hecht, Maxim Price, Peter Joon Park, and Tanner Murphy.