Apple pulled the rabbit out of the hat: What will they do if they lose their patent infringement? AliveCor confronts ITC with a case study

Many smartwatches look alike and have similar features, so it’s rare for a company to successfully block the sales of a competitor by claiming patent infringement. In 2016, Fitbit attempted to block the import of Jawbone products in a patent case, but dropped its suit after realizing that … well, Jawbone doesn’t sell that many fitness trackers anyway. To see this happen to a Goliath company like Apple, the maker of the best-selling watches in the worlds, is truly a feat.

Apple and Masimo have been in a patent dispute for a long time. The latter is known for its pulse oximetry tech, generally referred to as SpO2 or blood oxygen saturation in the wearable world, and it claims that Apple is using that patented technology without permission.

Case in point, while the ITC granted AliveCor’s import ban, it hasn’t had any impact because the Patent Trial and Appeal Board ruled that AliveCor’s EKG tech isn’t actually patentable. AliveCor would have to win its appeal to that ruling before any Apple Watches with EKG features would be pulled from the market for that reason.

10 years ago, Apple pulled the rabbit out of the hat after rolling the dice. It’s very unlikely for them to do that again,” says Levi.

Apple’s end of the world: a human-scale reviewer of wearable technologies, with a view toward next-generation health applications

Speaking as a wearables reviewer, removing the SpO2 sensors wouldn’t be the end of the world for Apple in the short term. Apple doesn’t offer blood oxygen features that are useful beyond your nightly baseline. I’m willing to bet the average Apple Watch user forgets that the blood oxygen features even exist.

In October the ITC banned the import of products that had already been imported and ordered the stop of sales of products that had already been imported. We’re currently nearing the end of a 60-day presidential review period, in which President Joe Biden or the US Trade Representative (USTR) has the opportunity to veto the ban. The ban will be in effect at the end of the review period if there is no veto.

“It is extraordinarily rare for the President to overturn a decision from the International Trade Commission and in my view, [it’s] unlikely in this particular case,” says Andrei Iancu, co-chair of the Council for Innovation Promotion (C4IP) and partner at Sullivan & Cromwell LLP, who was also the director of the US Patent and Trademark Office from 2018 to 2021.

The only real blow for Apple is if the rumors are correct and it’s working on sleep apnea detection. It would be hard to develop the feature if the sensors were lost. A lengthy FDA clearance process is required for that feature. That means more advanced health features like sleep apnea detection are more of a medium to long-term concern — and it’s very possible that Apple will have a workaround by the time such features are ready for consumers.

“From a legal perspective, whatever change Apple makes has to be significant enough to avoid the patent, and it cannot be what’s called a ‘colorable’ difference. Minor changes will not suffice, according to Iancu.

Basically, Apple can’t simply make a small tweak to the code and call it a day. Masimo claims that the patents are hardware related, so even completely disabling the sensor may not work depending on how the patent is written. It would need to be removed from the design, but it could take some time since Apple has a very thorough supply chain.

There are ways in which Apple might have to pay some money. Apple could have a licensing deal with Masimo. In an interview with the New York Times, Masimo CEO Joe Kiani stated that Apple didn’t engage in licensing negotiations. It is an easy fix, so why not do it? Both parties have to want a solution.

Levi says every case is different and every patent is different. “Different complainants who bring up a case have got their own businesses, their own products, and those implicate a whole different set of facts.”

Even so, Iancu says everything is working as it ought to. “The takeaway is that the system is working as originally intended. If Apple wants to bring products into the U.S. it should make sure it comes up with its original innovations and not use other peoples’ patented technology.