Time is ticking to purchase an Apple Watch this year. Specifically, Apple Watches with a light-based pulse oximetry feature used to measure blood oxygen levels are facing an International Trade Commission (“ITC”) import ban.
Traveling back in time to the start of the dispute on January 9, 2020, Masimo Corp. sued Apple in California courts. Masimo alleged Apple stole trade secrets related to their technology for measuring blood oxygen levels. Following the initial suit, in 2021, Masimo filed a complaint with the ITC requesting the ITC launch an investigation regarding unlawful importation of infringing devices by Apple. Masimo alleged the infringing devices were manufactured in China and imported into the United States for sale.
Under Section 337(a) of the Tariff Act of 1930, the ITC has the power to conduct investigations involving allegations of patent and trademark infringement by imported goods into the United States. Additionally, remedies available under Section 337 include exclusion orders directing Customs to stop infringing imports from entering the United States. Further, the ITC has the power to issue cease and desist orders against named importers engaging in unfair acts violating Section 337. Lastly, the ITC can issue temporary exclusion orders and temporary cease and desist orders to expedite relief.
On January 10, 2023, the ITC released a Notice of Final Initial Determination, finding that Apple Watches with a light-based pulse oximetry feature infringed Masimo’s patent. Following the notice, the ITC reviewed the decision to determine if an import ban on the infringing Apple Watches was appropriate.
The clock struck midnight for Apple on October 26, 2023. The ITC issued a Notice of the Commission’s Final Determination, Issuance of a Limited Exclusion Order (LEO) and a Cease and Desist Order, prohibiting importation of Apple Watches with light based pulse oximetry technology covered by U.S. Patent Nos. 10,912,502 and 10,945,648 owned by Masimo Corp.
However, only time will tell if the ban will actually go into effect. The decision is not an immediate ban on imports. The ITC decision will first face a sixty-day presidential review period. A presidential veto cannot be appealed by Masimo. However, Apple can appeal following the sixty-day presidential review period in the Federal Circuit.
Apple has other options to handle the potential import ban. First, Apple can simply disable the pulse oximeter feature on new watches imported into the United States. Second, Apple can redesign the pulse oximeter feature on the Apple Watches to avoid infringement of the Masimo patents. Third, Apple can enter licensing negotiations with Masimo regarding the cited patents.
Masimo CEO, Joe Kiani, released a statement that the ITC decision “sends a powerful message that even the world’s largest company is not above the law”. Prior to the Masimo case, in December 2022, the ITC issued a ban on Apple Watch imports related to patents owned by AliveCor. Apple succeeded in invalidating the underlying patents and the ban was temporary put on hold. AliveCor CEO, Priya Abani, released a statement that the outcome represented “every small company and every future innovation that is at risk of being suppressed by a goliath”.
Holiday shoppers may be concerned about the effects of the import ban on their gift lists. However, the import ban is scheduled to go into effect on December 26, 2023 after the presidential review period ends on December 25, 2023. Fortunately, holiday shoppers will not have to worry about beating the clock!
Written by Sara Desai