Medtech company Masimo has filed a lawsuit challenging a US Customs and Border Protection (CBP) ruling claiming it allows Apple to “bypass” an order from the International Trade Commission (ITC) that bans some Apple Watch models from being imported into the country.
The ITC imposed an import ban on certain Apple Watch models in October 2023 after Masimo accused the company of infringing its patented pulse oximetry technology in newer versions of the watch.
In a lawsuit filed on 20 August at the US District Court for the District of Columbia, Masimo claims the CBP has reversed that decision without telling it first, permitting Apple to import devices that, when used with iPhones already in the US, perform the same functionality that the ITC had found infringed Masimo’s patents.
Josh Budwin, a principal in the intellectual property practice area at McKool Smith in Austin, said Masimo’s decision to file a suit directly against the CBP in the federal court in Washington DC was “in my experience, unique”.
“Typically, I’d expect a party in Masimo’s position to go back to the ITC and seek a modification or clarification of the scope of the limited exclusion order,” he added.
“Instead, Masimo has chosen to open a new front in a new court and judicial circuit in its long-running war with Apple, raising a novel theory that customs has failed to comply with its own regulations and failed to provide adequate due process.”
Masimo says it only discovered the new ruling, issued on 1 August, two weeks later, on 14 August, when Apple publicly announced it would be reintroducing the pulse oximetry functionality through a software update.
The lawsuit is the latest twist in Masimo’s increasingly fraught dispute over its technology in Apple watches.
In January 2024, the parties agreed that the Apple watches could be imported as long as the functionality that infringes Masimo’s patents was disabled.
Masimo says that the CBP, by issuing this new ruling through an ex parte process and “applying a self-imposed rule against considering indirect infringement theories”, has acted “unlawfully and deprived Masimo of the protections of its patents”.
Masimo is seeking declaratory and injunctive relief preventing the CBP from implementing the 1 August ruling.
Cole Tipton, a commercial litigator at Snell & Wilmer in Washington DC, said: “Practically, the effect of the CBP ruling is that it moots the immediate effects of the ITC exclusion order because Apple can now import watches that have the same ultimate functionality of pulse oximetry.”
Going forward, Masimo has many options, he continued, one of which is bringing an enforcement action at the ITC, a process that would see it ask the ITC to confirm that the modified product continues to infringe and violate the ITC’s previous order.
He added that fines can be severe if the ITC finds that Apple’s redesigned product continues to violate its exclusion order. Under 19 USC § 1337(f), daily fines can be “not more than the greater of $100,000 or twice the domestic value of the articles entered or sold on such day in violation of the order”.
In July, the US Court of Appeals for the Federal Circuit heard Apple’s appeal of the 2023 ITC import ban and the court is currently reviewing the merits of that appeal.
Quinn Emanuel Urquhart & Sullivan partners Derek L. Shaffer, Michael E. Swartz, Matthew A. Traupman, Samuel P. Nitze and Steven C. Cherny are representing Masimo.
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