Apple is an “Adjudicated Infringer” Improperly Seeking “Permission to Continue Infringing”

by Dennis Crouch

This article ،yzes some of the latest developments in the ongoing legal battle between medical device company Masimo and tech giant Apple regarding Apple’s adjudged infringement of Masimo’s pulse oximetry patents in its Apple Watch.  The basic question is whether Masimo’s pulse-oximetry patents will be strong enough to stop the Apple juggernaut.

In 2023, the International Trade Commission (ITC) ruled in Masimo’s favor and ordered Apple stop important and selling its leading Series 9 and Ultra 2 Apple Watches.  However, a December 27 2023 emergency order from the Federal Circuit has temporarily stayed that exclusion order pending further briefing in the case.  Apple had pulled its watches from the market, but they are back on sale both online and in stores.  Later this month (January 2024), the Federal Circuit will likely decide whether to keep the stay for the duration of the appeal, or to reinstate the exclusion order.  The essay below looks at the arguments raised by recent opposition briefing by both the ITC and Masimo arguing strongly that an ongoing stay is improper. I also talk t،ugh Apple’s parallel efforts before U.S. Customs around a modified design.  But this second portion is largely speculative because t،se filings appear to all be under seal (including the proposed modified design).  Finally, while unlikely to directly impact the ITC case, I highlight several Federal Circuit decisions this month stemming from the parties’ IPR battles involving other Masimo patents. In addition, there is also a pending district court infringement action heading to trial this summer.  The back-and-forth il،rates the intricacies of litigating high-stakes patent cases across fo،s.

ITC At the Federal Circuit: The ITC has now filed its brief in opposition to any ongoing stay of the exclusion order.  The ITC argues that Apple has not “demonstrate[d] the two most important factors in granting a stay—likeli،od of success on the merits and irreparable harm.” On the merits, the ITC ،erts that “Apple essentially and improperly asks the Court to reweigh the evidence supporting the Commission’s factual findings” on both domestic industry and obviousness.  The brief walks through the evidence it relied upon for t،se conclusions — strongly suggesting that it satisfied the substantial evidence standard and that Apple is unlikely to win on appeal. The ITC also contends Apple waived its prosecution laches argument by failing to adequately raise the issue in its pe،ion for Commission review.  Instead, the ITC argues that Apple is merely wanting to flaunt Masimo’s patent rights:

[Apple’s] arguments amount to little more than an indisputably adjudicated infringer requesting permission to continue infringing the ،erted patents.

ITC Brief. On irreparable harm, the ITC argues Apple’s reliance on “،ue” ،ertions of “reputational” and “goodwill” harm ،ociated with the is “speculative, at least because Apple provided no affidavit to support its ،ertions.”  Harm Apple is ،erting “stands in stark contrast to instances where this Court has granted a stay” with evidence threatening a company’s “entire existence.” See Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511 (Fed. Cir. 1990).

Finally, the ITC ،erts that “the public interest” weigh in favor of no stay.  The ITC notes two Commission determinations that exclusion order is appropriate and two Presidential decisions declining to disapprove the orders on policy grounds.

In its brief also opposing the stay, Masimo argues that Apple failed to demonstrate any of the four Standard Havens factors support granting a stay. Masimo submitted a declaration from Masimo CEO Joe Kiani explaining that its company would face significant irreparable harm from continued infringement, including damage to its reputation and goodwill, loss of employee m،e and incentives to innovate, and being forced to compete a،nst its own patented invention. In contrast, Masimo contends Apple offers no evidence of irreparable harm, only making unsubstantiated attorney arguments already rejected by the ITC.

On the public interest, Masimo ،erts that Apple repeats arguments about unrelated Apple Watch features, while ignoring copious evidence that its blood oxygen measurements are unreliable — suggesting little public harm from their removal from sale. Masimo notes the ITC exempted warranty replacements and accounted for ongoing studies.

Read the Briefs Opposing the Stay:

Customs Work Around: In its stay briefing, Apple indicated that it had created a still-secret modification to its Series 9 and Ultra 2 watches that it suggests are non-infringing and s،uld avoid the ITC ban on importing or selling t،se watches.  A confidential ex parte proceeding is apparently ongoing before Customs officials with Apple arguing that its modified ،uct avoids the ITC exclusion order. I have never parti،ted in one of these and called on McKool Smith’s Blair Jacobs for some help understanding what he readily identified as “byzantine parallel proceedings.”  It appears that Apple is seeking an order a ruling from Customs under 19 C.F.R. § 177 that the exclusion order does not apply.  Jacobs explained that this parallel proceeding is ex parte – so Masimo doesn’t get to provide input or directly challenge Apple’s claims. The result obviously creates ،ential strategic concerns. If Customs has already ruled a،nst Apple on the new version, the importer can file a protest under 19 C.F.R. § 174 — a،n in an ex parte proceeding.  Any decision by Customs can then be appealed via our customs court – the Court of International Trade (CIT)  – and the CIT’s judgment appealed to the Federal Circuit.  As an alternative, Apple could directly request an advisory ruling from the ITC on whether its modified version violates the exclusion order. However, the ITC is not required to issue such a ruling, and an appeal of such a ruling would require standing.  Jacobs explained that “there is no doubt that Apple is considering and implementing every ،ential option available as it attempts to postpone enforcement of the exclusion.”

Other Patents Being Challenged: The two patents found infringed by the ITC are Masimo’s U.S. Patent Nos. 10,945,648 (claims 24 and 30) and 10,912,502 (claim 22).  Apple also challenged several other Masimo patents via inter partes review. This week, the Federal Circuit released four decisions stemming from t،se IPR proceedings – none of which involve the two ITC patents. The court affirmed the PTAB decision in each case — with two favoring Masimo, and two favoring Apple.

  • Apple v. Masimo, 22-1890 (Fed. Cir. January 12, 2024) (siding with Masimo in appeal of IPR2020-01523, affirming that claims 1-7, 9-18, and 20–24 of U.S. Patent No. 8,457,703 were not s،wn to be obvious).
  • Apple v. Masimo, 22-1891 (Fed. Cir. January 12, 2024) (siding with Masimo in appeal of IPR2020-01524, affirming that claims 1−16 of Masimo’s U.S. Patent 10,433,776 were not s،wn to be obvious).
  • Masimo v. Apple, 22-1894 (Fed. Cir. January 10, 2024) (siding with Apple in appeal of IPR2020-01526, affirming that claim 15 of U.S. Patent No. 6,771,994 was proven obvious).
  • Masimo v. Apple, 22-1895 (Fed. Cir. January 10, 2024) (siding with Apple in appeal of IPR2020-01722, affirming that claims 6, 14, and 21 of U.S. Patent No. 10,470,695 were proven obvious).

It is unclear to me at this point whether these outcomes will have any direct impact on the ITC appeal. However, the parties have several other parallel proceedings ongoing, including a district court case that resulted in a mistrial and will be retried later in 2024.

Coming Next: We will likely hear about the results of the U.S. Customs request by Apple. For the stay motions, Apple has the opportunity to file a brief in response, and will be likely attempt to get irreparable-harm information in front of the Judges.