By: Jennifer Gomes
Since its launch in early 2015, the Apple Watch has been the smartwatch, paving the way for technological breakthroughs across the market. While limited in function, the original Apple Watch created the foundational design of a mini smartphone to be wearable and accessible on the wrist. Over multiple series of watches and software updates, features such as GPS sensors, waterproofing, ECG sensors, and crash detection have been implemented to keep smartwatch users interested. The newest upgrades – the Apple Watch Series 9 and Apple Watch Ultra 2 – introduced blood oxygen sensors integrated with pulse oximetry features. However, a patent infringement case brought by California-based health technology company Masimo has forced Apple to withdraw the new feature from all of their devices.
Pulse oximetry is a non-invasive method of measuring blood oxygen levels. Monitoring oxygen flow within the body can aid in monitoring heart health and detecting conditions such as chronic obstructive pulmonary disease (COPD), asthma, heart failure, and even lung cancer. It’s a helpful tool for smartwatch users who monitor their physical activity with the devices and track health metrics. Apple’s blood oxygen sensor could measure how much oxygen red blood cells carry from the lungs through a combination of lights and sensors. Masimo alleged that this technology infringed on their light-based pulse oximetry sensor patent.
This isn’t the first time Masimo has gone to court alleging infringement over this technology. In 2018, Masimo claimed that startup True Wearables infringed the wireless pulse oximeter technology and came out on top with a permanent injunction against True Wearables. The company’s CEO, Marcelo Lamego, was a former executive at Masimo and Apple. After Lamego’s departure from Apple, other former Masimo executives who may have brought proprietary information in their move to Apple were hired.
Masimo sued Apple for infringing 12 patents used in the previous Apple Watch series back in 2020, and ongoing litigation (and other various patent infringement claims and counterclaims) across the aisle saw Masimo come out on top after a court found Apple liable for infringement in January 2023. This decision was upheld by the International Trade Commission (ITC) in October 2023, and a limited import ban was placed on the Apple Watch Series 9 and Ultra 2. The bans went into effect on December 26, 2023, but Apple pulled the watches from shelves on Christmas Eve. They quickly filed an emergency appeal with the Federal Circuit, temporarily blocking the import ban. While the watches were cleared for sale on January 3, 2024, the US Customs and Border Patrol ordered that the Series 9 and Ultra 2 could only be sold with a software update disabling the pulse oximetry technology. Only a few days later, the Federal Circuit stayed the ban, but the Series 9 and Ultra 2 were officially blocked from the market again on January 17, 2024. New versions of the Apple Watches omitting the blood oxygen technology hardware hit stores the next day.
What does this mean for Apple’s sales? It’s expected that Apple will lose about $5 billion in revenue throughout the dispute. Apple Watch sales totaled $17 billion in 2023 – meaning they are facing nearly a 30% dip in watch sales. Nevertheless, this is only about 1% of the tech giant’s annual sales profit. Since the dispute is only based within the U.S., the ban would not affect other worldwide sales of Apple Watches. While the ban does not have a current end date set, it’s hard to say how much total revenue loss Apple will face.
While older smartwatch models are available for purchase, smartwatch users may be forced to invest in other brands if Apple does not find a workaround. Masimo’s blood oxygen technology is a valuable metric to reference. Suppose Masimo were to ultimately prevail in the action and force Apple to sell Apple Watches without the disputed features. In that case, the company may take their intellectual property to other smartwatch providers and license out the technology. This would be a major blow to Apple’s dominant place in the industry and bolster a formidable opponent in the health-tech market.
The two companies are continuing their fight over tech IP on various fronts – with 4 Apple patents being challenged by Masimo for being invalid and a trade secret misappropriation case being retried later this year. Apple definitely sees Masimo as stiff competition for its Apple Watch market through its continued legal involvement. It’s possible Apple may seek a license for use or even seek an acquisition of Masimo. Until they can make a favorable showing over their IP, Apple will likely continue their legal attacks on the smaller competitor in order toprotect their reputation in the health-tech sphere.
Student Bio: Jennifer Gomes is a second-year law student at Suffolk University Law School. She is a staff writer for the Journal of High Technology Law. Jennifer received a Bachelor’s of Science in Biomedical Engineering with a minor in Mechanical Engineering from Worcester Polytechnic Institute (WPI) in 2020. Prior to law school, she worked in the biotechnology industry.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
