A Heavyweight Case; 916 Pages Heavy, That Is
Last Friday, Apple, Inc. filed a massive appeal with the U.S. Appeals Court for the Federal Circuit asking the judges to overturn the ruling of the United States International Trade Commission (ITC) which sided with Masimo and ordered a ban on sales of certain models of the Apple Watch. The filing runs an impressive 916 pages long and cites multiple elements of the ITC ruling, telling the Federal Court that the commission “…both exceeded its authority and issued a series of flawed substantive rulings.”
Apple says: ‘The Commission’s decision cannot stand.’
I have covered the battle between Masimo and Apple extensively, and the reader may recall the surprising turn of events late last year and into early this year. It was October 2023 when Masimo succeeded in convincing the ITC, based largely on the ITC’s own detailed investigation, that Series 9 and Ultra 2 models of the Apple Watch infringed on the company’s core pulse oximetry technology. Pulse oximetry is a technology that measures the oxygen level in the bloodstream.
The ITC ordered a halt to all imports and a ban on U.S. sales of all Watch models containing the infringing technology that was to take effect in December. Then, at the last minute, Apple filed an emergency appeal of the ban to the U.S. Appeals Court for the Federal Circuit, requesting – and receiving – a temporary stay of the ITC ban while Apple appealed.
Things Really Heated Up in Mid-January 2024
The stay from the Appeals Court allowed Apple to continue to import and sell all Apple Watches, but it was only a temporary stay while both parties argued the issue in initial filings and hearings. Then, in a complete surprise, we learned in mid-January of this year that the Exclusion Order Enforcement Branch of the U.S. Customs and Border Protection – the agency tasked with enforcing ITC bans – had determined that new samples of the Watch provided by Apple were no longer infringing on Masimo’s patents. Apple had apparently redesigned the infringing model by removing the pulse oximetry technology. This sounded like either a full capitulation by Apple, or perhaps a Plan B to be held in their back pocket if needed.
But on January 18th, another surprise – the Court of Appeals lifted the stay on the ITC ban, forcing Apple to immediately halt the importation and sales of any Apple Watch model that employs the infringing technology – a bad blow to Apple. Many readers thought that this twist in the case as reported by Strata-gee meant the matter was over, Apple obviously had designed a new Watch without pulse oximetry technology that they would now be forced to begin selling in place of the infringing models.
Apple’s Not Giving Up; At Least Not Yet
Instead, Apple has filed this massive appeal as it seeks – again – to overturn the ITC ‘s action (which it has previously appealed directly to the ITC). Apple appears to be holding on to the idea that it will be able to sell its existing infringing models if it can convince the Appeals Court to overturn the ITC ruling.
In its opening salvo in this action, Apple has its cannons aimed squarely at the ITC – an agency that Apple itself has used to protect its own patents. There’s a different tone in this action. Typically, up to now, Apple’s top-rated legal teams wrote smart and logical legal filings, with powerful ideas well presented in a narrative that was unemotional, controlled, and professional.
Apple’s Latest Filing is Higher Intensity
This document feels different in its intensity. In the introduction to the action, the company tells the Court in the very first sentence that the ITC has exceeded its “statutory authority.” The next sentence alleges that the ITC then compounded that “fundamental error by issuing a series of substantively defective patent rulings.”
By sentence three, the company insists that the Court put the ITC back in its proper place, saying, “…this Court should correct the Commission’s errors and ensure the agency observes the jurisdictional limitations Congress prescribed.” That’s right, Apple thinks the Court should put the ITC in its place, perhaps in the corner in a time-out.
Took 916 Pages to Get All the Venom Out
As strongly worded and passionate as this document is – it took 916 pages to get all the venom out of their system – I find it strategically contradictory. Apple says the ITC overstepped its statutory bounds but instead of showing where the Commission overstepped those statutory boundary lines, it rather takes up with arguing each of the individual findings and decisions of the Commission. Findings that, as far as I can tell, were all well within their role. [However, I admit that I haven’t finished all 916 pages yet. Apple’s argument on the limits of the Commission’s statutory authority may be argued later.]
But the company has also stockpiled lots of ire for its adversary, Masimo Corp., whom in this document it characterizes as a patent troll who laid a trap for Apple to walk into and somehow managed to pull the wool over the eyes of the ITC who foolishly (or even ignorantly) stumbled into their trap…victimizing Apple in the process. It’s a little dramatic and dripping with irony considering Apple’s reputation for – ahem – “acquiring” technology from other companies.
Apple even notes as a reference Sonos, Inc. v. Google LLC where a judge found Sonos guilty of abusing the patent system. This was a clear effort to try to paint Masimo with the same bad-boy brush. (See my take on how companies abuse the patent system for profit, in the truly stunning Court finding against Sonos in my post here…) But again, to my certainly non-lawyer eyes, the circumstances between these two cases differ too greatly to apply.
The Launch of the Infringing Watch
On September 18, 2020, Apple launched the Series 6 Watch – “The first to include a feature measuring the user’s blood oxygen levels.” Including this new feature was no easy feat, they tell the Court, “…fitting a blood oxygen feature into Watch while adhering to Apple’s meticulous design standards was a technological feat that required tens of thousands of engineer hours.” Six days after the launch, Apple says, Masimo and Cercacor Labs (a related company) “…brushed off a twelve-year-old patent application and applied for new claims” it says were written “to ensnare Apple’s new Watch.” Masimo then was said to have “rushed to use these…claims” to initiate an investigation by the ITC.
Because the ITC is, according to Apple, “fundamentally a trade forum, not an intellectual property forum,” Masimo was required to show it had an existing item “that practiced [utilized] its asserted patents.” But Apple asserts “Masimo had no such article” and so it resorted to “CAD drawings of a supposed ‘Masimo Watch.’ The document alleges that “Masimo ultimately conceded no such item existed,” and therefore, Apple concludes the initial investigation was initiated by “a serious misrepresentation.”
Many Issues Already Raised With, and Rejected By, the ITC
The company goes on to raise multiple issues centered around this matter with the Commission. However, Masimo was able to satisfy the Commission it meets all necessary requirements with other items that utilized the patented technology. Apple disagrees with the Commission’s decision to accept this – as Apple puts it – “circumstantial evidence” provided by Masimo.
For background, Apple wanted the court to know that it is a Cupertino, California-based company with 90,000 U.S. employees “and additionally supports more than ‘450,000 jobs through its 9,000 U.S. suppliers.'” The company devotes $30 billion – “over half of its total operating expenses – to research and development.”
Was that a “flex”?
Five Claims of Infringement Connected to Two Patents
To win its initial ITC case against Apple, Masimo ended up asserting five claims of infringement on two of its patents. The original case was larger than that but had been refined through the process. The first one is U.S. Patent No. 10,912,502, titled “User-Worn Device for Noninvasively Measuring a Physiological Parameter of a User.” The second is U.S. Patent No. 10,945,648, also titled “User-Worn Device for Noninvasively Measuring a Physiological Parameter of a User.” The company asserted two claims on the ‘502 patent and three claims on the ‘648 patent, with the ITC eventually agreeing with them and issuing the ban on the two Apple Watch models.
Apple makes much of the fact that the initial complaint filed by Masimo contained over 100 claims of infringement and that the ITC had eliminated most of them…ending up with these last five claims. Again, I fail to see how it is outside of the ITC purview to determine that these surviving 5 claims were legitimate, regardless of the process that eliminated the other initially asserted claims. At the end of the day, Masimo only needs to prevail on 1 claim; whereas here, they prevailed on 5 claims of infringement.
The Four Key ITC Decisions Apple Wants Overturned
How important is this matter to Apple? Well, consider some interesting facts and figures surrounding this new appeal. Apple lists no fewer than 49 separate attorneys on its team from 5 different law firms. It invokes citations from no less than 42 cases, 10 statutes, and 6 “Other Authorities.”
They are asserting 4 major issues, with multiple related sub-issues. The main ITC decisions Apple is seeking to reverse are:
- The Commission Erred by Holding the Domestic Industry Requirement Satisfied
- The Commission Erred By Concluding That The Asserted Claims Are Not Invalid
- The Commission Only Found Infringement by Construing Claim Terms Contrary To Their Ordinary Meanings
- The Commission Erred By Permitting Masimo To Enforce The Asserted Claims Despite Masimo’s Unreasonable, Prejudicial Delay in Prosecution
Apple will have their work cut out for them. These issues were all raised with the Commission, which has a process to thoroughly review its preliminary decisions before they are finalized. The Commission considered Apple’s arguments and this, coupled with an incredibly extensive investigatory process in which both parties are constantly participating, suggests it feels it is on solid ground.
The Company That Dumped Ten Years and $10 Billion Down the Drain
Of course, Apple is helped by the fact that, as one of the richest companies in the world it has virtually unlimited resources to pursue its goals. I mean, this is a company that dumped ten years of engineering and $10 billion down the drain after it decided to shutter its autonomous vehicle division. However, this case is titled Apple, Inc. v. International Trade Commission – and the ITC is also a deeply resourced entity that undoubtedly has other unrelated Apple matters in front of it as it fights them in Court on this matter.
Masimo and Cercacor are also involved in the matter as “intervenors.” Intervenors are “organizations or persons who want to participate in a proceeding because they believe the proceeding, or its outcome, may affect their rights or duties. Intervenors as a ‘matter of right’ are those parties who have a statutory right to participate,” according to the Legal Information Institute.
See More…
I cannot predict how this appeal will turn out. Lawyers always tell me courts are completely unpredictable, although this case will be argued before a judge, not a jury. Juries are often the most unpredictable element.
To me, Apple’s arguments boil down to the fact that they disagree with the ITC Commission’s decisions and the discretion they applied to arrive at their judgment. But Apple didn’t really have any kind of “smoking gun” where the Commission made a totally crazy “out of bounds” decision. The decisions they did make may feel crazy to Apple, but I’m not sure an objective third party would feel the same way.
Again, I’m not an attorney, so I will be quite interested to see what the Appeals Court finds. Stay tuned folks!
See more on Apple by visiting apple.com.
Learn more on Masimo and its products – including the very real Masimo W1 Watch and the new Masimo Freedom Watch – at masimo.com.
Leave a Reply