Breaking: appeals court continues ITC ban on Apple Watches with working pulse oximetry (updated)

January 18, 2024 | by

Breaking  US appeals court lifts temporary injunction, bans sale of new pulse oximetry-functioning Watch 9 and Ultra 2. Yesterday, the US Appeals Court for the Federal Circuit dropped the first shoe and that landed against Apple’s head. The court ruled against continuing the short-term stay against the sale and importation of new Watch 9 and Ultra 2 watches equipped with functioning pulse oximetry (blood oxygen, SpO2). That ban is now in effect. The ban is a result of the International Trade Commission’s (ITC) Limited Exclusion Order that found that Apple violated Masimo’s patents on pulse oximetry (SpO2) sensors and software that became effective on 31 December.

Apple’s workaround was to disable the pulse oximetry software for new watches they sell in Apple Stores and ship to third parties.  The hardware is still inside, but readings are disabled by the watchOS. These new versions have a /A after the model number. This workaround allows the US Customs and Border Protection (CBP)’s Exclusion Order Enforcement (EOE) branch to permit new Watch 9 and Ultra 2 watches to be imported and sold. TTA 17 Jan

Reports have confirmed that existing models that were already sold or distributed before the ban through retailers will continue to have working SpO2 software. The court decision does not require pushing a software update that disables the blood oxygen reading. These pre-ban Watches sold by third parties and on the used market do not have the /A after the model number. Other Apple Watch models that never had the pulse oximetry feature were unaffected by the ban.

Of note, the appeals court cleverly separated the Apple Watch importation from the appeal of the ITC ruling. That ‘other shoe’ is a decision on whether Apple can appeal the ITC ruling, initiating the long appeals process. That decision is pending but due shortly. See TTA 28 Dec 2023 for the timeline.

Another possible outcome is that Apple settles with Masimo at some point, an action that seems obvious, but not in Apple’s suites. CNBC, 9to5Mac has the best explanation of the model changes with commenters reflecting the split jury on whether SpO2 readings are all that critical for Watchaholics. This story is developing and will be updated.

Update 19 Jan   This Editor enjoyed reading Strate-gee’s writeup on the latest developments in Masimo v. Apple. He digs into the roots of the dispute which go quite far back, to 2022 and Apple’s poaching of Masimo employees working directly on their pulse oximetry including their chief medical officer and chief scientist. The first employee went to Apple and then started his own company. He was found to have appropriated Masimo’s trade secrets and technology. Another finding: in the Masimo letter to the appeals court (included in the article) stating that the redesign of the Apple Watch “eliminates any irreparable harm”, part of the EOE proceeding is confidential and thus the EOE decision document is not public. His speculation is that this may be a key to whether the already in circulation Watch 9 and Ultra 2 models will in future have their blood oxygen reading disabled via an Apple software update.

 

Breaking: ban on sale of Apple Watches 9 and Ultra 2 stayed by federal appeals court Wed 27 December

December 28, 2023 | by | 2 Comments

Apple Watch 9, Ultra 2 available again for sale–at least well into January, as appeals court decides. It should come as no surprise that Apple quickly appealed the US International Trade Commission (ITC) ruling of 26 October that prohibited Apple from importing either model and won a temporary stay of enforcement. The ITC ruling found that Apple in the Series 6 and later violated Masimo’s patents on pulse oximetry (SpO2) sensors and software. ITC rulings are sent to the US president in a 60-day process that ended in no presidential veto and thus final approval on 25 December. Apple, anticipating compliance and moving in an orderly fashion, pulled both models from online sale 3 pm Eastern Time on Thursday 21 December, while Store sales ended on Christmas Eve. [TTA 21 Dec]

On Tuesday 26 December (Boxing Day), Apple filed for an emergency stay of the ban in the US Court of Appeals for the Federal Circuit which was granted almost immediately, on Wednesday 27 December. This prevents Homeland Security’s Customs and Border Protection (CBP) from enforcing the import ban until the court can consider Apple’s motion to stay the ban pending its full appeal. The timeline now, after this emergency stay, is that the ITC has until 10 January 10 to file its opposition, with Apple’s reply due on 15 January. If the court grants Apple its desire for a full appeal after that and to stay enforcement of the Limited Exclusion Order (LEO) until that appeal is decided, the enforcement timeline then typically pushes forward another 18 months. Masimo is contesting the action saying there was no emergency as Apple had already stopped selling their watches with pulse oximetry features. Apple, as the infringer on Masimo’s patents as found by the ITC, has to show the court that the stay is justified.

With the Court of Appeals ruling in place, Apple is resuming online sales today (Thursday 28 Dec) at noon Pacific Time (3pm Eastern Time).

Yet another wrinkle is that Apple has proposed a modification to both of these watches to the CBP. They are now seeking a judgment that the modified version is outside of the ITC Limited Exclusion Order. The ban also affected owners of older Apple Watches with pulse oximetry readings, as out-of-warranty watches’ hardware would not be considered repairable. 

The most legally comprehensive article on this is by Dennis Crouch at Patently-O. Bloomberg, Axios, and The Guardian. The New York Post has a backgrounder on the relationship between the current president and Masimo’s CEO, which appears to be a close one but, based on another company’s history that follows, is likely to not be pertinent to the ITC decision or approval. (This Editor notes that Apple for decades and currently has been considerably influential in government matters and business policy. It is not unusual here in the US or elsewhere for that matter that company leaders play the donation game. We eschew additional comment.)  

Apple and others’ patents–not perfect together. AliveCor is in a similar situation in its own patent legal actions with Apple: winning in an ITC patent determination approved by the White House, negative PTAB actions, then Apple appealing. AliveCor is currently engaged in an antitrust court action with Apple in the US District Court of Northern California [TTA 19 July and prior] with a decision expected in 2024. Unlike Masimo, Apple licensed AliveCor’s ECG technology in early Apple Watches, then took action when Apple introduced its own ECG in the Apple Watch 4 in 2020.

It also shows that Apple has, shall we say, a certain pattern of updates to its Watch lines that may infringe on the patents of smaller companies. Again, all Apple would need to do is license these patents and pay royalties. It might be cheaper than lawyers and lawsuits.

Owlet sock pulled from US distribution after FDA warning letter

December 4, 2021 | by

Awwww turning to Owwwww! High-flying Owlet has lost some altitude due to the consequences of a 5 October FDA warning letter. The outcome, at least for now, is that Owlet cannot sell its Smart Sock in the US. The Smart Sock measures sleep patterns, blood oxygen saturation, and pulse rate through pulse oximetry. FDA is now considering it a medical device that falls under 510(k) marketing clearance requirements, including premarket approval (PMA). Effective 22 November, the Owlet app will no longer be downloadable, although current owners who have downloaded the app for the Smart Sock and the Cam will not be affected. There are Owlets in the reseller pipeline, such as Amazon, which have now been rendered non-working. The Owlet Smart Sock can be sold outside the US, but not from the website.

What is surprising from the FDA letter is that they have had this issue with Owlet for five years. From the letter: “Since 2016, the FDA has corresponded with Owlet that the Owlet Smart Sock meets the definition of a device under the FD&C Act and does not fall under the compliance policy for low-risk products that promote a healthy lifestyle (General Wellness guidance).” The latter is a catch-all that has enabled various tech products to go to market with statements such as “not intended to diagnose, cure, treat, alleviate or prevent any disease or health condition”. It may have been either an escalation of monitoring capabilities, of marketing, or of the FDA deciding after the SPAC that Owlet needed to be treated differently. Owlet came to market in 2013.

Owlet’s letter to customers alludes to the FDA warning letter and that no safety issues were raised. They promise here and on the website that they will “transition to a new app and consumer wellness product that addresses FDA’s concerns”. The website continues to sell the Owlet Cam and Dream Lab, with ‘Coming Soon’ in January for the new Dream Sock and Dream Duo, but with no details. What’s not known are any details on their capabilities, whether they will fall under ‘general wellness’, and whether Owlet has begun the laborious and long process of filing as (likely) a Class II device.

Owlet enjoyed a SPAC during the summer [TTA 23 July] that nabbed it $135 million and a valuation of over $1 billion. It traded then at $8. Today’s close was $3.95. Its market cap is now less than half. It’s disappointing to this Editor that Owlet didn’t file with FDA well before the SPAC. They now have the opportunity to get FDA clearance, but the more likely outcome is that, at least for now, they will market a less capable device that falls under ‘general wellness’. Deseret News, FierceBiotech, CNET, The Verge