Apple Faces Demand to Bar Watch From U.S. as Fight Widens

An Apple Inc. Apple Watch Series 6 sits on display at the company's flagship store in Sydney, Australia. (Photographer: David Gray/Bloomberg)

Apple Faces Demand to Bar Watch From U.S. as Fight Widens

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Masimo Corp. is expanding its legal fight against Apple Inc., filing a patent-infringement complaint at the U.S. International Trade Commission that seeks to halt imports of the Apple Watch.

Apple’s Series 6 smartwatch infringes five patents for devices that use light transmitted through the body to measure oxygen levels in blood, Masimo said in a complaint filed at the Washington agency. The patented technology is key to Masimo’s core business and Apple is unfairly copying the features, the company said.

Masimo, which develops signal-processing technology for health-care monitors, and its spinoff, Cercacor Laboratories Inc., first sued Apple in January 2020, accusing it of stealing trade secrets and improperly using Masimo inventions related to health monitoring in its Apple Watch.

The patents in the federal case are being reviewed by the U.S. Patent and Trademark Office after Apple argued they didn’t cover new inventions. The judge put that aspect of the case on hold until the reviews are completed.

Unlike a district court, the trade agency won’t delay consideration of the patent complaint and it typically completes investigations in 15-18 months. Conversely, if Apple decides to challenge these patents as well, the patent office is likely to decline any request for a review because the ITC works so quickly.

The dispute is likely to end in a settlement that could net Masimo between $50 million and $300 million a year in royalties, Bloomberg Intelligence analyst Tamlin Bason said in a note Tuesday. Masimo reported $1.14 billion in sales last year.

Apple denies that it stole any trade secrets or infringed the patents in the earlier case. Company officials didn’t immediately respond to queries seeking comment on the new case. The unit that includes sales of Apple Watch reported $30.6 billion in revenue in fiscal 2020.

As part of its ITC complaint, Masimo said the public won’t be harmed if the Apple smartwatch is kept from the U.S. market because the pulse oximetry feature is “not essential to the public health or welfare.”

“Apple heavily markets that feature of the Series 6 to give the watch the appearance of a medical device,” Masimo said in the filing. “Yet, hidden from the millions of purchasers of the Series 6, Apple warns in the fine print that the blood oxygen measurements should not be relied upon for medical purposes.”

The case is In the Matter of Certain Physiological Measurement Devices, 337-3554, U.S. International Trade Commission (Washington).

©2021 Bloomberg L.P.

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