Even if Apple wins the battle to prove that the Apple Watch blood oxygen sensor does not infringe on Masimo's patents, another patent war is looming and could deal a flurry of blows to the company.
With the dramatic events of the ITC's recent ban on the Apple Watch, it's easy to forget that Masimo isn't the only company challenging the health sensors used in the Apple Watch.
ECG technique to take ECG readings
Another company has also filed a lawsuit, claiming that Apple's ECG technology, which was introduced in the Apple Watch Series 4 in 2018, infringes its patents.
In 2017, a small healthtech company called AliveCor released an Apple Watch accessory called KardiaBand, the first FDA-approved Apple Watch accessory that allows users to take ECG readings.
However, a year later, Apple built a similar feature directly into the Apple Watch Series 4. As a result, AliveCor filed an antitrust lawsuit in 2021, accusing Apple of stealing its ideas and engaging in "behind-the-scenes sabotage" in the form of watchOS changes that rendered KardiaBand's SmartRhythm companion app inoperable.
This patent war is undoubtedly a huge challenge for Apple and needs to be dealt with carefully.
Apple responds to legal action
In addition to filing a lawsuit with antitrust authorities, AliveCor has filed a patent lawsuit with the U.S. International Trade Commission (ITC), alleging that the Apple Watch ECG feature infringes its patents.
Although the antitrust case was dismissed earlier this year, the ITC ruled in favor of AliveCor by issuing a Limited Exclusion Order (LEO) prohibiting the sale and import of the Apple Watch Series 8 and Apple Watch Ultra (and other models with ECG technology) in the United States.
This is similar to Apple's patent dispute with Masimo, when the ITC ruled that the Apple Watch Series 6 and later blood oxygen sensors infringed Masimo's patents.
AliveCor's path to a ban is similar to Apple's experience in the Masimo case, which also went through the Biden administration's 60-day presidential review period. The key difference, however, is that Apple successfully obtained a ruling from the U.S. Department of Commerce's Patent Trial and Appeal Board (PTAB) declaring AliveCor's related patents invalid.
This decision put the ITC's injunction on hold because a product cannot be prohibited from infringing a patent that does not technically exist. Therefore, the onus is on AliveCor to prove that its patent is still valid and has appealed the PTAB decision.
At the same time, Apple also appealed the ITC's ruling, which was the first to issue a ban. Nonetheless, AliveCor is optimistic about Masimo's victory at the ITC, seeing it as a positive omen. In a statement to the media, a AliveCor spokesperson expressed support for Masimo and praised the government for holding industry giants accountable for anti-competitive behavior.
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While the appeal may not be heard until sometime next year, if AliveCor succeeds in getting the Court of Appeals to confirm the validity of its patents and Apple fails to overturn the ITC's ruling, we could once again face sales restrictions for the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States.
On the other hand, if regulators continue to put pressure on Apple, the next-generation Apple Watch Series 10 (or Apple Watch X) may have to make significant changes to avoid violating the red line of US regulators. This could mean removing features such as blood oxygen and ECG sensors.
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