Raising the pulse: How Masimo v Apple changed patent strategy

The drama of the decade-long patent dispute reflects a changing market. Marisa Woutersen speaks with John Cronin and Pete Conley from Know Labs to explore its impact on patent strategy and the changing face of medtech.

A dispute that began in 2013 hit a climax this year, when the US Court of Appeals for the Federal Circuit denied Apple’s motion for extending an interim stay on a ban issued by the International Trade Commission (ITC) for some versions of the Apple Watch.

The order, dated January 17, 2024, prevented Apple from selling its Apple Watch Series 9 and Ultra 2 devices that Masimo claims have its blood-oxygen measuring tech embedded within.

Since January, the Masimo versus Apple lawsuit has been described as one of the “historical events that have changed the patent system” by John Cronin, chairman and CEO at ipCapital Group.

LSIPR spoke with Cronin and Peter Conley, chief financial officer and SVP of IP at Know Labs, to unpack the aftermath of the case, shedding light on the ITC’s role, strategic considerations for rights owners, and the enduring case’s broader impact on medtech.

With a growing demand for medtech and specifically pulse oximeters, that has seen the entry of tech giant Samsung into the market, the dynamics of protecting wearables is changing.

Large companies such as Masimo can engage in lengthy and expensive legal disputes, impacting major players like Apple, however, a smaller company with fewer resources wouldn’t have been able to take this fight far, Cronin tells LSIPR.

So big is the case’s impact, Cronin believes it may prompt further changes in the patent system to make litigation more accessible and cost-effective, especially for smaller companies.

ITC actions are a ‘wake-up call’

Describing the case as a “wake-up call”, Cronin identified the ITC’s intervention as a potentially serious barrier and suggested companies in this space change their strategy.

Cronin, a prolific inventor who previously spent 17 years at IBM, identifies two trends that could emerge following Masimo v Apple: the likelihood of increased scrutiny on IP strategies by boards and C-Suite executives of large companies due to the potential risks it exposed; and the growing importance of reshoring in light of the ITC-related challenges, pushing companies to reconsider offshoring of technologies.

Conley, with over 20 years in strategic IP analysis, development, and monetisation, describes the case as a “seminal event” in the perception of patent strategy.

Recently, there has been a rise of criticism around patent strategies arguing the current patent system is “discouraging organisations from developing new technologies,” says Conley.

“The Apple versus Masimo dispute is evidence that the industry is shifting back to valuing patents and we can expect to see this trend continue. This renewed interest in patent strategy won’t necessarily stifle innovation, as larger players are generally aiming to acquire innovation from smaller players in the space,” he adds.

Strategic insights for rights owners

The dispute should focus minds on patents and the strategic importance of having a diverse and robust patent portfolio, says Cronin.

As a result of this case, Cronin pointed out some key takeaways for rights owners, particularly from the ITC’s response.

Smaller companies, like Masimo, should strategically decide whether to spend money on litigation, especially considering the potential impact of stopping competitors from shipping to the US—the ITC could represent better value for money.

"If it's a trade issue, that you can get the ITC involved, I think that's a stronger argument for a board member of a board, or a CEO, trying to say yes, let's spend the money on litigation," said Cronin.

He also argued stopping sales immediately is “more powerful than collecting litigation money, which could take years to get”.

Additionally, rights holders, in response to potential threats, should enhance their trade secret programmes to protect valuable information and prevent employees from taking critical knowledge when leaving.

“Maybe if Masimo had a stronger trade secret policy, employees might not have been as easily courted away,” argues Cronin.

He also notes the ability to win IP cases is linked to having a diverse and extensive patent portfolio, covering various aspects such as methods, systems, user perspectives, key elements, supplier processes, and business models.

“A lot of the successful cases have to do with having lots of patents, so when you get litigation, you can find out which ones stand and hopefully it will be strong,” says Cronin.

Not only would rights holders recognise they “need to have more patents” but also they should actively “invent around their own patents” to strengthen their position and prevent others from doing the same.

This is a “core skill”, according to Cronin and involves using a well-thought-out checklist to invent around and then strategically considering the “broader strategic footprint of patents.”

To avoid potential counterclaims and strengthen their position, rights holders should “publish inventions, to create prior art, that they cannot afford to patent or believe will not receive a patent” as a way to prevent others from doing so.

Cronin stresses the importance of “strategy in numbers”, arguing that a focus on quantity of patents, diversity of patents, and inventing around their own patterns can make them stronger in litigation.

Samsung enters the game

Recently, Samsung entered the market by publicly expressing an interest in developing a non-invasive blood glucose monitor to incorporate into its devices.

This move could influence patent strategy by “driving companies to invest in stronger patent portfolios,” says Conley.

“The more “competition" or players in the field—whether that be incumbent players, emerging companies, or completely new entrants to the market—the more valuable the patent strategy,” he adds.

Additionally, increased competition in the market also “paves the way for increased collaboration and innovation”.

“Generally speaking, large players are typically looking for solutions that are interoperable with their existing operations,” says Conley.

Rising demand for medtech

There has been an increase in demand for pulse oximeters that came about after the Covid-19 pandemic, and there is a broader growing trend of medtech entering the mainstream market, according to Cronin.

“As we’re seeing this growing interest, we’re certainly seeing a corresponding rise in mainstream wearable devices,” chimes Conley.

The re is obvious potential for medtech to become more user-friendly and integrated into everyday devices. As the world's population ages, technology will play an increasing role in in addressing health concerns.

In terms of patent strategy, Conley says medtech has experienced “steady growth” and an “increase in overall patent applications”.

In the non-invasive glucose monitoring space, there has been a “noticeable increase” in patenting activity in the past couple of years, with “patent filing increasing about 35 percent year-over-year,” he explained.

“More organisations are beginning to understand that accelerating patents often correlates to technological success,” he argues.

And when an organisation becomes an IP leader, it can go on to become a market leader.

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