Apple attempts to prevent Masimo’s new watch following import ban

Although Apple Inc. utilized every possible method to resist an import ban on its flagship Apple Watch models, the company has also been working to obstruct Masimo Corp.’s imminent launch of its Freedom watch.

Masimo, a manufacturer of medical technologies, refers to the Freedom as “a more refined smartwatch” that incorporates the patented blood-oxygen measurement technology at the center of the longstanding patent and trade secrets dispute between the companies.

As Apple’s request to pause enforcement of the US International Trade Commission’s late-October orders banning imports of Apple Watches that infringe Masimo patents was denied, the company intensified the rhetoric in its patent-infringement suits against its smaller competitor.

“With the Freedom, Masimo is directly targeting Apple’s clients,” the Cupertino, Calif-based company stated in its January 3 opposition to Masimo’s plea to delay a case that Apple filed in October 2022 in the US District Court for the District of Delaware. A redacted version was filed a week later. Masimo plans to widely release the Freedom by this summer.

Apple’s “tactical” two-pronged strategy is evidence it’s “simultaneously trying to mitigate the impact of the ITC’s decision and subtly undermining Masimo’s market presence,” said Stacey Lee, a professor of practice in law and ethics at Johns Hopkins Carey Business School with a joint appointment at Johns Hopkins Bloomberg School of Public Health.

The tech giant’s opposition to pausing the lawsuit “lays bare Apple’s unease about the Apple Watch facing a true competitor,” Lee said.

The Freedom contains the same medical-grade pulse oximeter as Masimo’s W1 watch, which the US Food and Drug Administration cleared last November for both prescription and over-the-counter use. The Freedom has already been released in a pre-market release program where users provide feedback in exchange for a discount. Masimo’s CEO, Joe Kiani, stated that the Freedom, “more elegant” than the W1, should be available under a limited-market release program this quarter, with a full-market release in the first half of 2024.

The Freedom also has other conventional smartwatch features, such as cell phone connectivity, messaging, music, and a hardware privacy switch.

Angela McIntyre, executive director of Stanford University’s Wearable Electronics Initiative, mentioned that the legal actions “seem typical of tech companies” but “have little to do with the market for wearables.”

Apple indicated that Kiani mentioned in an August 2022 earnings call that the Freedom “should command 100% market share.” That’s reason enough for the court to deny Masimo’s request to pause Apple’s lawsuit while administrative challenges to several patents’ validity proceed, Apple argued.

“Delaying resolution of Apple’s infringement claims will allow Masimo an opportunity to gain customers and build brand awareness on the back of Apple’s patented technology,” the filing said. At trial, Apple said, it would show that Masimo is the true culprit and “should not be permitted to publicly pitch its unfounded, one-sided narrative while delaying adjudication of Apple’s claims showing that the opposite is true.”

‘Aggressively Protecting’ Territory

Apple’s emphasis on the accolades its devices’ health-related features have received from the medical community, Lee said, shows it isn’t just defending its products, but rather is “underscoring the strategic importance of these innovations in maintaining market supremacy.”

“This narrative isn’t just a defensive legal maneuver,” Lee said. It’s “a reflection of Apple’s deeper concerns about preserving its edge in a health-tech market that’s evolving at a breakneck pace.”

She called Masimo’s entry as a potential Apple Watch challenger “significant.” Apple’s filing “isn’t out of left field; it’s a consistent part” of Apple’s “playbook—aggressively protecting their market territory” through legal means.

Apple initiated two patent infringement suits against Masimo in Delaware federal court: one centered on design patents and one on utility patents. Masimo rejected the allegations and lodged counterclaims in both cases, accusing Apple of antitrust violations, false advertising, deceptive trade practices, unfair competition, and patent infringement by the Apple Watch. The counterclaims in the utility patents case, which Apple denies, were put on hold in January 2023 because they involve five patents Masimo also asserted in its ITC case. Masimo’s request to lift the stay as to three of the patents that weren’t part of the ITC’s decision and aren’t at issue in Apple’s appeal is pending.

The two companies are also dueling at the US Patent and Trademark Office’s Patent Trial and Appeal Board, where Masimo challenged the validity of four of Apple’s six utility patents. On Dec. 20, Masimo asked the Delaware court to pause that suit until the PTAB issues its decisions.

Apple responded earlier this month, urging the district court to “reject Masimo’s attempt to create separate tracks for overlapping claims.” A trial would likely occur “months before” the PTAB rules on the patents’ validity, Apple said—the board’s first decision isn’t due until Sept. 20, and the last on Oct. 16. Those dates don’t account for potentially lengthy appeals.

The utility-patents case, Apple argued, is at a late stage, so it would be harmed by a stay “because of the unique circumstances of this case.” Apple said “allowing Masimo to gain a foothold in the marketplace with an infringing product while Apple’s claims are potentially stayed for years through appeals will irreparably harm Apple.” Masimo, it said, “is already engaging in a negative public relations campaign against Apple to promote the Freedom.”

“This case is not at ‘an efficient stopping point,’ as Masimo asserts,” Apple said. “This case will not stop. Rather, the case, including potentially claims that Masimo told the court ‘arise from the same transaction or occurrence’ as Apple’s utility patent claims, will proceed.”

Betting the Company

Apple “made false claims that Masimo somehow copied Apple’s technology,” Kiani, the Masimo CEO, said in supporting his company’s opposition to Apple’s emergency motion to stay enforcement of the ITC’s import ban. “Masimo would never copy Apple’s poorly performing product or release such a product to the public.”

Kiani said he “essentially bet the company” on the Apple dispute, which he said has cost Masimo about $100 million. The sprawling legal fight is largely centered on pulse-oximetry technology, and the rivals have clashed at the ITC, the PTAB, the US Court of Appeals for the Federal Circuit, and in Delaware and California federal courts. Apple’s efforts to mitigate damage from the ITC ban also pulled a US customs agency into the mix.

“Apple—even though they took my people, they took our property, they took our patents—their product is horrible,” Kiani said during a Jan. 17 videoconference hosted by an inventors’ advocacy group hours after the Federal Circuit rejected Apple’s request to halt the import ban while the appeal is ongoing. He also said that although he doesn’t want to work with Apple at this point, “it may be better for everybody if we could help them improve their product.” The olive branches he said he’s offered haven’t resolved the dispute.

Three of Apple’s asserted utility patents cover a wearable electronic device and expire in September 2035, Bloomberg Law estimates. Another is related to an embedded heart-rate monitor and also is at issue in Apple’s California federal case against AliveCor—claims regarding that patent, estimated to expire in April 2029, were stayed pending a PTAB validity review. A fifth covers “devices, methods, and graphical user interfaces for accessing notifications” and is estimated to expire in September 2037. The case’s other patent covers a wearable device “for sensing biological parameters” and has the latest estimated expiration of the six: August 2038.

“I don’t see it as mere legal posturing or brinkmanship,” Lee, the Johns Hopkins professor, said of Apple’s arguments. “I think it’s a calculated strategy by Apple to shield its market share and uphold its reputation in a sector where they’ve not only participated but have been trailblazers.”

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