Apple Keeps Win Knocking Out Masimo Blood-Oxygen Sensor Patents

The Federal Circuit sided with Apple Inc. by affirming a series of tribunal decisions that mostly invalidated a set of Masimo Corp. blood-oxygen sensor patents that Masimo says the tech giant infringed through sales of smart watches.

A three-judge panel of the US Court of Appeals for the Federal Circuit concluded that the Patent Trial and Appeal Board had sufficient factual support for its finding that the bulk of the patent claims are obvious in light of prior art.

The decision closes one phase in a yearslong, sprawling legal battle between Apple and Masimo—competitors in the fast-growing wearable medical device market. The companies previously squared off in a district court trade secrets trial earlier this year that resulted in a deadlocked jury. The US International Trade Commission is also weighing an import ban on Apple Watches, after an ITC judge found in January it infringed a different Masimo patent.

Masimo had advanced several different lines of argument in the appeal, including that the PTAB ignored evidence and arguments that contradicted its obviousness finding.

But that argument misrepresented the case, according to Judge Alan D. Lourie, who wrote the nonprecedential opinion.

The board, he said, hadn’t ignored contrary evidence or arguments. “Rather, it considered all of Masimo’s points; it just did not reach the conclusions that Masimo desired.”

He also rejected Masimo’s argument that the board improperly relied on a theory put forth by Apple to explain why a skilled engineer looking at prior inventions would’ve found Masimo’s newer invention obvious. Specifically, Masimo alleged that Apple raised the “greatest curvature theory” for the first time in its reply brief filed with the board, and beyond the point where Masimo had adequate ability to respond.

Lourie wrote that the Apple had introduced the theory earlier on in the case and “merely further expanded on that theory” in its reply to rebut Masimo arguments. As a result, it wasn’t legal error for the board to rely on the theory.

Masimo’s Silver Lining

Lourie’s decision, though, did rescue a handful of claims from one of the challenged Masimo patents.

The PTAB had ruled that five patent claims from US Patent No. 10,588,554 were obvious even while the independent claim from which they depend wasn’t obvious in light of the prior art presented by Apple.

Masimo argued that holding was erroneous, and even Apple wrote that, under the circumstances, the board ruling on the five patent claims “should be set aside.”

Lourie agreed, reviving those five patent claims.

Trade Secrets Case

Masimo initially asserted the patents in question in 2020 when it sued Apple in a California federal court. The company has argued both that Apple developed a blood-oxygen sensor for its Apple Watch using Masimo trade secrets and that the watches infringe more than a dozen Masimo patents.

The case’s trade secrets claims went to trial, but US District Judge James V. Selna put the patent infringement claims on hold pending a resolution of various PTAB appeals at the Federal Circuit.

After a three-week trial, the jury ultimately deadlocked in May.

Masimo has said it will seek a new trial and could potentially assert one or more patent claims revived by the Federal Circuit.

Lourie was joined by Judges Sharon Prost and Tiffany P. Cunningham.

Fish & Richardson PC represents Apple. Masimo is represented by Knobbe, Martens, Olson & Bear LLP.

The case is Masimo Corp. v. Apple Inc., Fed. Cir., 2022-1631, affirmed-in-part and reversed-in-part 9/12/23.