Apple and Masimo Shun Money for Injunctions in Smartwatch Fight

Apple Inc. and medical-device maker Masimo Corp. faced off twice in recent weeks over smartwatches, first in a Delaware patent-infringement jury trial and then in a California trade-secrets bench trial. Neither offered the chance for a substantial payout.

In Wilmington, Del., Apple spent five days persuading jurors to award $250, the minimum it could seek to get the federal jury trial it wanted as part of its effort to block Masimo’s current smartwatch products. Across the country in Santa Ana, Calif., Masimo relinquished its previous bid for $1.85 billion in damages after a jury deadlocked last year, successfully pushing to convert the retrial to a bench trial to focus on its quest to block sales of Apple Watches it says use technology covered by its trade secrets.

“I’ve never seen this sprawling litigation in district court where the focus has been almost exclusively on obtaining injunctive relief,” said Jeff Saltman, a partner at Fisch Sigler LLP in Washington.

The two cases are part of the multi-venue battle the tech giant and Masimo have been locked in since 2020 over smartwatch technology, including blood-oxygen sensors. Late last year, the US International Trade Commission banned imports of certain Apple Watch models found to infringe Masimo’s patents, and Apple’s appeal is pending at the US Court of Appeals for the Federal Circuit.

While the ITC can block infringing products at the border, it can’t award damages, which are usually sought in district courts. Given that, attorneys said, it’s rare—and emblematic of broader strategies—to see both parties in the recent trials essentially eschewing damages in favor of positioning for injunctive relief.

“Both companies are playing a long game, trying to strengthen their positions for eventual settlement talks or to secure competitive advantages in overlapping markets,” said Stacey Lee, a professor of practice in law and ethics at Johns Hopkins Carey Business School.

‘Not Looking for Money’

At October’s trial in Delaware over allegations Masimo’s smartwatches copied the Apple Watch’s aesthetic and functionality, John Desmarais of Desmarais LLP, representing Apple, told jurors, “a couple hundred bucks is all we’re asking for.”

“We’re not looking for money from Masimo,” he said. “We just want them to stop copying our product.”

Jurors awarded $250 after finding the discontinued versions of Masimo’s smartwatches infringed design patents.

Apple painted the mixed verdict as a victory for innovators. But Masimo pushed back on that assessment.

“Apple primarily sought an injunction against Masimo’s current products,” it told Bloomberg Law at the time, “and the jury’s verdict is a victory for Masimo on that issue.”

Less than two weeks later, Masimo again faced off with Apple, this time in the US District Court for the Central District of California. Masimo, valued at about $9 billion, accused Apple—worth about $3.6 trillion—of stealing trade secrets for the blood-oxygen sensor on some Apple Watch models after poaching Masimo workers. Judge James Selna didn’t rule from the bench, and post-trial briefs are due Dec. 19. A hearing is set for Jan. 27.

Selna ordered the retrial after last year’s clash ended with a deadlocked jury. Before the bench trial, Apple said in a court filing Masimo had “abandoned all claims to punitive damages, a reasonable royalty, and lost profits damages.” Masimo then dropped its quest for $1.85 billion in unjust enrichment—already down from $3.1 billion after Selna tossed other claims during the first trial.

“Masimo was likely worried that Apple would be popular with juries,” said Mark Lemley, a Stanford University law professor.

Saltman said it’s “notable” that Masimo had “kind of foregone those damages,” but also pointed to the previous mistrial. “Maybe it was not turning favorably for Masimo, so they decided that an injunction was the better course,” he said.

Masimo and Apple declined to comment.

Old-Fashioned Fight

An order blocking a company from importing, manufacturing, and selling its products “can often be even more valuable than damages,” Saltman said. “Ultimately, this could result in some sort of large license between the companies,” and an order blocking a rival’s product “gives you additional leverage to get more favorable terms.”

Lee, who has a joint appointment at Johns Hopkins Bloomberg School of Public Health, said Masimo’s decision to forego its billion-dollar claim in the trade-secrets case “might signal a shift toward prioritizing control over the narrative” in the dispute.

The strategy, she said, “could reflect the unique dynamics of trade secrets versus patents—where the perceived harm to a company’s competitive edge or innovation pipeline often outweighs the immediate financial impact.”

Masimo has also alleged some Apple Watch models infringe patents related to low-power heart-rate monitoring—claims that were bifurcated from the trade-secret claims in its California case—and asserted infringement counterclaims in Delaware. Damages remain possible if Apple is found liable in either instance.

Apple’s damages expert argued in a recent court filing that her Masimo counterpart “grossly overstated profits attributable to the blood oxygen feature” and said it accounts for just $34.1 million of Apple’s profits from two watch models.

The damages question could reemerge in the trade-secrets case should Selna find Apple liable but decline to award Masimo an injunction. In that scenario, future royalties for the Apple Watch’s deactivated, but still-present, pulse-oximetry sensor could come into play.

The crisscrossing claims and counterclaims span federal district and appeals courts, the ITC, the Patent Trial and Appeal Board, and a US customs agency. It’s peculiar, Lemley said, “that we view a case like this as so unusual.”

“We have been so inundated with suits by patent trolls and people seeking big payouts that the idea that the companies are fighting over whether to actually enforce the patent to stop a competitor from selling products strikes us as surprising,” he said. “But that is how the system was originally designed to work.”

The lead district court cases are Masimo Corp. v. Apple Inc., C.D. Cal., No. 8:20-cv-48; and Apple Inc. v. Masimo Corp., D. Del., No. 22-cv-1377.