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Apple wins bid to pause Apple Watch ban at US appeals court

120 points by mfiguiere 3y ago

oldpersonintx 3y ago
[dead]
Doches 3y ago
Watching this unfold I was really hoping that the long-term solution here would be Apple moving (or at least announcing a move) Watch assembly to the US, if only to get around the _import_ ban. I realize that would take...rather a long time to set up, but it would have been one hell of a win (for the US, not so much for Apple).
- jjtheblunt 3y ago
  That still could be underway?
- bdcravens 3y ago
  Licensing the technology or acquiring the company would probably be less expensive and take less time.
  - kemayo 3y ago
    Masimo has a market capitalization of a bit over $6 billion, so Apple presumably has a very long way to go before acquiring them is cheaper than continuing the lawsuit. Apple could certainly do a hostile takeover out of their cash-on-hand if they wanted to, though -- it'd take about 10% of what they have available. I've not seem anyone manage to turn up what sort of terms Masimo would want to license their patent. It's certainly possible that what they want is unreasonable, particularly since they seem to be launching their own smartwatch. Of course, Apple famously loves its high margins on products, and it might be fighting here to keep a 30% profit on the Watch rather than 28%.
    - Someone 3y ago
      > Masimo has a market capitalization of a bit over $6 billion, so Apple presumably has a very long way to go before acquiring them is cheaper than continuing the lawsuit > I've not seem anyone manage to turn up what sort of terms Masimo would want to license their patent. It's certainly possible that what they want is unreasonable FTA: “In its earlier suit, which ended with a deadlocked jury, Masimo wanted Apple to pay more than $3 billion in damage” So, they’re claiming that patent is worth half the company. I guess that’s, at least, quite a high initial offer.
      - bdcravens 3y ago
        It sounds to me like Apple is probably just stalling to negotiate that number down.
      - krab 3y ago
        No, they claim their company would be worth 1/2 more had Apple not infringed their patent. Or probably they're asking for something extra to compensate for the fact they have to sue. Anyway not directly related to current market cap.
  - alberth 3y ago
    That’s presumably a precedent Apple doesn’t want to set.
    - bdcravens 3y ago
      Paying for what doesn't belong to them? I'm not qualified to analyze the patent claims, but assuming it's correct as determined, this hardly seems like a situation where Apple is being bullied and needs to stand on principle.
- deleted 3y ago
  [deleted]
tambourine_man 3y ago
Took longer than I expected
flutas 3y ago
Honestly, all this tells me is no matter what big tech wins. Have a great idea and patent it? Well who cares, they'll steal your tech and courts seemingly will let them. All comes down to who has the money for better lawyers.
- rand1239 3y ago
  If they make the tech accessible for millions of people and improve reality, how is that a bad thing? I am confused. Unless you are too much emotionally caught up in the word "steal" and bunch of sentences.
  - galbar 3y ago
    Stealing is morally bad, regardless of the good effects the act of stealing may have.
    - rand1239 3y ago
      > morally bad, Apart from those words, is there anything else you think is of concern compared to the progress made by humanity by making the tech available to millions of people?
      - deleted 3y ago
        [deleted]
      - angus-prune 3y ago
        The debate isn't about whether the technology should be available to millions but whether (and how much) apple should have to pay for the technology. Either Apple are guilty or being stingy, or Massimo are guilty of being greedy. Either could be responsible for the conflict.
        rand1239 3y ago
        I couldn't care less whatever is the interpretation of reality is. You seems to be interested in who is guilty or not. I am not interested in that. It's just some thoughts in your mind. The end result was that tech became more accessible and which is all I care about.
kemayo 3y ago
Pausing the ban during appeals seems generally reasonable. After all, the point of there being an appeal is that the case isn't actually settled yet, so leaving the status quo in place until it is seems less-harmful overall. Possibly with some kind of clawback requirement for if the appeal fails. Apple's argument was that it was being irreparably harmed by having to take the Watch off the market. Not for lost sales, which are reparable by handing money to Apple, but for the reputation / goodwill cost of consumers being exposed to the turmoil. (There's established case law that this does count as irreparable, so the main question would be whether they're really being harmed in that way.)
- mratsim 3y ago
  If there is a ban for consumer safety reasons, say in food, health, agriculture, transport, is it reasonable to pause a ban?
  - DaiPlusPlus 3y ago
    But this is a ban due to alleged patent infringement (or alleged abuse of the patent system, depending on one's opinion of Apple) - comparing this to a public harm/public-benefit scenario is a distraction.
    - gambiting 3y ago
      And to add to that - there's no harm in allowing the sale of these devices to continue, because if the court upholds the ruling then Apple could always be sued for damages during that time(and there is no risk that Apple would not be able to pay it).
      - beeboobaa 3y ago
        The risk is that consumers will be shafted by buying a product today that apple refuses to support later because they weren't actually allowed to sell it.
Almondsetat 3y ago
Apple's only concern is to slow things down until they release the newer device which hopefully will have a patent workaround
- granzymes 3y ago
  And they will likely succeed. In addition to this appeal to the Federal Circuit, which has the potential to pause the import ban for over a year if the stay is extended, Apple is also submitting a proposed software redesign to U.S. Customs and Border Protection. U.S. Customs will decide on January 12th whether the redesign is sufficient, and if it is sufficient Apple can continue its imports. Maismo would then need to head back to the ITC to argue that the software redesign still infringes their patents. That could easily take another year. If Apple succeeds in either way, they will be able to draw out the litigation long enough for a full hardware redesign in the Apple Watch 10.
  - FpUser 3y ago
    >"If Apple succeeds in either way, they will be able to draw out the litigation long enough for a full hardware redesign in the Apple Watch 10." Can they still be sued for the damages caused even if they come up with total redesign?
    - mrkstu 3y ago
      Yes, for any of the previous infringing watches.
    - granzymes 3y ago
      Yes, but not at the ITC, which doesn't have the power to award monetary damages. Masimo has sued Apple for unjust enrichment from trade secret theft already and sought damages, but the jury deadlocked 6-1 in favor of Apple. There's a retrial scheduled for next October and Masimo could add patent damage claims to that case. The likely reason Masimo made the strategic choice to sue for for unjust enrichment instead of damages is that damages are limited to the license fees Apple would have paid in the alternative world where they sought a license. That's a relatively small amount of money compared to what Masimo is no doubt hoping to extract by blocking Apple Watch imports. By the way, a court would not have enjoined Apple from importing or selling the Apple Watch. Masimo has a very small domestic consumer-facing industry putting their patents into practice and they they already license their patents to others, demonstrating that they could do so here as well. The ITC was the only place they were likley to get that remedy.
conjecTech 3y ago
Isn't there treble(3x) damages for knowingly selling something that violates others' IP? This seems like a risky gambit by Apple. I'm not sure what their endgame is, but having those potential damages stack up in the likely scenario the patent violations get upheld seems like they would be a big deterrent to having Masimo come to the table and negotiate.
- ceejayoz 3y ago
  It isn’t necessarily knowingly if you’re still in the appeals process.
  - conjecTech 3y ago
    I'm speaking colloquially. I believe it covers exactly this situation.
- granzymes 3y ago
  The ITC doesn't have the power to award monetary damages to Masimo for Apple's alleged infringement. For that, you need to go to court. The ITC is a specialized forum for trade disputes. Masimo actually did sue Apple in Federal court for damages, but the judge declared a mistrial after the jury deadlocked 6-1 in favor of Apple.
  - FireBeyond 3y ago
    > Maismo actually did sue Apple in Federal court for damages, but the judge declared a mistrial after the jury deadlocked 6-1 in favor of Apple. To be clear, the mistrial was around "theft of trade secrets", and had nothing to do with the alleged patent infringement.
    - granzymes 3y ago
      The jury heard testimony related to patent infringement. It's true that Masimo chose to seek an award for unjust enrichment from trade secret theft instead of damages related to the patents themselves, but that was a strategic choice on their part. They could have requested damages in that same case.
albntomat0 3y ago
Is there a concrete explanation of what Masimo’s actual innovation was in their patents? They were posted in a previous thread, and the way they were written made it unclear what was actually covered. Is Apple allegedly infringing on the idea of putting a blood oxygen sensor in a watch, a technical innovation in how to do so effectively, or something else entirely?
- explaininjs 3y ago
  It’s regarding the arrangement of LED’s and sensors in the watch, along with the signal processing needed to get reasonable data out of them. My impression of the whole debacle is that Masimo hired up a bunch of smart people, they invented this tech while being paid next-to-nothing by Masimo (as Masimo didn’t have the product development chops to actually bring anything to market), Apple saw that the tech was good and just neeeed a product/marketing team, Apple tried to acquire Masimo, their CEO tried to play hard to get, so Apple ”stole” (offered compensation commensurate to their technical prowess) all the engineers who actually made the thing and just built it in house from “scratch”. It’s a tricky case to be sure. But I’m all for the outcome where consumers get cool tech and the people who actually made it (notably not the Masimo CEO) get fair compensation for their work. The aspect a lot of people here gloss over is that the patent that Masimo owns wasn’t actually developed by anyone currently at Masimo. Apple “owns” all the people, but Masimo “owns” their accomplishments. It’s weird.
  - delecti 3y ago
    Patent law is convoluted sometimes, but that seems like a somewhat charitable description of pretty blatant patent infringement.
    - explaininjs 3y ago
      Right, and the only way laws change is by moneyed individuals testing them. We should be cheering this opportunity for an actually decent precedent to be set by Apple’s patent law army. Though in all likelihood it will be settled out of court.
JCharante 3y ago
That was fast
hedora 3y ago
Note that no court has ruled the Masimo patent is valid. They ran this through an expedited legal procedure that bypasses patent review. In all likelihood, the patent will eventually be tossed out, but that process takes a year or two.
- justahuman74 3y ago
  I'd presumed that patents are presumed valid unless invalidated (which I think is a problem in itself)
  - ClumsyPilot 3y ago
    What? If you presume that a patent is invalid, then what is the patent office for? You pay them to make sure the patent in valid before granting it. Why would one part of the government always preaume that the other part of the government is wrong?
- HumblyTossed 3y ago
  Isn’t this backwards? They don’t validate a patent but assume it is until it is invalidated.
  - hedora 3y ago
    That’s the beauty of this process from a patent troll perspective. It is expedited, and therefore can’t be blocked by having a proper review that could invalidate the patent.
    - andsoitis 3y ago
      > That’s the beauty of this process from a patent troll perspective I know you didn't draw the connection explicitly, but I just wanted to point out that in this particular case, Masimo isn't a patent troll - they're a company that sells actual devices - https://www.masimopersonalhealth.com https://www.masimopersonalhealth.com and is listed on the NASDAQ with market cap of $6 billion.
jmpman 3y ago
Has Masimo stated what their proposed licensing fees would be? $10/watch, retroactively, seems like a reasonable deal. I bought my Apple Watch 6, specifically for that feature, even though I had a perfectly functional Apple Watch 3.
- gnicholas 3y ago
  Masimo has no reason to state this publicly, and I don't believe they have done so.

120 points by mfiguiere 3y ago

[dead]

Watching this unfold I was really hoping that the long-term solution here would be Apple moving (or at least announcing a move) Watch assembly to the US, if only to get around the _import_ ban. I realize that would take...rather a long time to set up, but it would have been one hell of a win (for the US, not so much for Apple).

jjtheblunt 3y ago
That still could be underway?
bdcravens 3y ago
Licensing the technology or acquiring the company would probably be less expensive and take less time.
- kemayo 3y ago
  Masimo has a market capitalization of a bit over $6 billion, so Apple presumably has a very long way to go before acquiring them is cheaper than continuing the lawsuit. Apple could certainly do a hostile takeover out of their cash-on-hand if they wanted to, though -- it'd take about 10% of what they have available. I've not seem anyone manage to turn up what sort of terms Masimo would want to license their patent. It's certainly possible that what they want is unreasonable, particularly since they seem to be launching their own smartwatch. Of course, Apple famously loves its high margins on products, and it might be fighting here to keep a 30% profit on the Watch rather than 28%.
  - Someone 3y ago
    > Masimo has a market capitalization of a bit over $6 billion, so Apple presumably has a very long way to go before acquiring them is cheaper than continuing the lawsuit > I've not seem anyone manage to turn up what sort of terms Masimo would want to license their patent. It's certainly possible that what they want is unreasonable FTA: “In its earlier suit, which ended with a deadlocked jury, Masimo wanted Apple to pay more than $3 billion in damage” So, they’re claiming that patent is worth half the company. I guess that’s, at least, quite a high initial offer.
    - bdcravens 3y ago
      It sounds to me like Apple is probably just stalling to negotiate that number down.
    - krab 3y ago
      No, they claim their company would be worth 1/2 more had Apple not infringed their patent. Or probably they're asking for something extra to compensate for the fact they have to sue. Anyway not directly related to current market cap.
- alberth 3y ago
  That’s presumably a precedent Apple doesn’t want to set.
  - bdcravens 3y ago
    Paying for what doesn't belong to them? I'm not qualified to analyze the patent claims, but assuming it's correct as determined, this hardly seems like a situation where Apple is being bullied and needs to stand on principle.
deleted 3y ago
[deleted]

tambourine_man 3y ago

Took longer than I expected

flutas 3y ago

Honestly, all this tells me is no matter what big tech wins. Have a great idea and patent it? Well who cares, they'll steal your tech and courts seemingly will let them. All comes down to who has the money for better lawyers.

rand1239 3y ago
If they make the tech accessible for millions of people and improve reality, how is that a bad thing? I am confused. Unless you are too much emotionally caught up in the word "steal" and bunch of sentences.
- galbar 3y ago
  Stealing is morally bad, regardless of the good effects the act of stealing may have.
  - rand1239 3y ago
    > morally bad, Apart from those words, is there anything else you think is of concern compared to the progress made by humanity by making the tech available to millions of people?
    - deleted 3y ago
      [deleted]
    - angus-prune 3y ago
      The debate isn't about whether the technology should be available to millions but whether (and how much) apple should have to pay for the technology. Either Apple are guilty or being stingy, or Massimo are guilty of being greedy. Either could be responsible for the conflict.
      - rand1239 3y ago
        I couldn't care less whatever is the interpretation of reality is. You seems to be interested in who is guilty or not. I am not interested in that. It's just some thoughts in your mind. The end result was that tech became more accessible and which is all I care about.

kemayo 3y ago

Pausing the ban during appeals seems generally reasonable. After all, the point of there being an appeal is that the case isn't actually settled yet, so leaving the status quo in place until it is seems less-harmful overall. Possibly with some kind of clawback requirement for if the appeal fails. Apple's argument was that it was being irreparably harmed by having to take the Watch off the market. Not for lost sales, which are reparable by handing money to Apple, but for the reputation / goodwill cost of consumers being exposed to the turmoil. (There's established case law that this does count as irreparable, so the main question would be whether they're really being harmed in that way.)

mratsim 3y ago
If there is a ban for consumer safety reasons, say in food, health, agriculture, transport, is it reasonable to pause a ban?
- DaiPlusPlus 3y ago
  But this is a ban due to alleged patent infringement (or alleged abuse of the patent system, depending on one's opinion of Apple) - comparing this to a public harm/public-benefit scenario is a distraction.
  - gambiting 3y ago
    And to add to that - there's no harm in allowing the sale of these devices to continue, because if the court upholds the ruling then Apple could always be sued for damages during that time(and there is no risk that Apple would not be able to pay it).
    - beeboobaa 3y ago
      The risk is that consumers will be shafted by buying a product today that apple refuses to support later because they weren't actually allowed to sell it.

Almondsetat 3y ago

Apple's only concern is to slow things down until they release the newer device which hopefully will have a patent workaround

granzymes 3y ago
And they will likely succeed. In addition to this appeal to the Federal Circuit, which has the potential to pause the import ban for over a year if the stay is extended, Apple is also submitting a proposed software redesign to U.S. Customs and Border Protection. U.S. Customs will decide on January 12th whether the redesign is sufficient, and if it is sufficient Apple can continue its imports. Maismo would then need to head back to the ITC to argue that the software redesign still infringes their patents. That could easily take another year. If Apple succeeds in either way, they will be able to draw out the litigation long enough for a full hardware redesign in the Apple Watch 10.
- FpUser 3y ago
  >"If Apple succeeds in either way, they will be able to draw out the litigation long enough for a full hardware redesign in the Apple Watch 10." Can they still be sued for the damages caused even if they come up with total redesign?
  - mrkstu 3y ago
    Yes, for any of the previous infringing watches.
  - granzymes 3y ago
    Yes, but not at the ITC, which doesn't have the power to award monetary damages. Masimo has sued Apple for unjust enrichment from trade secret theft already and sought damages, but the jury deadlocked 6-1 in favor of Apple. There's a retrial scheduled for next October and Masimo could add patent damage claims to that case. The likely reason Masimo made the strategic choice to sue for for unjust enrichment instead of damages is that damages are limited to the license fees Apple would have paid in the alternative world where they sought a license. That's a relatively small amount of money compared to what Masimo is no doubt hoping to extract by blocking Apple Watch imports. By the way, a court would not have enjoined Apple from importing or selling the Apple Watch. Masimo has a very small domestic consumer-facing industry putting their patents into practice and they they already license their patents to others, demonstrating that they could do so here as well. The ITC was the only place they were likley to get that remedy.

conjecTech 3y ago

Isn't there treble(3x) damages for knowingly selling something that violates others' IP? This seems like a risky gambit by Apple. I'm not sure what their endgame is, but having those potential damages stack up in the likely scenario the patent violations get upheld seems like they would be a big deterrent to having Masimo come to the table and negotiate.

ceejayoz 3y ago
It isn’t necessarily knowingly if you’re still in the appeals process.
- conjecTech 3y ago
  I'm speaking colloquially. I believe it covers exactly this situation.
granzymes 3y ago
The ITC doesn't have the power to award monetary damages to Masimo for Apple's alleged infringement. For that, you need to go to court. The ITC is a specialized forum for trade disputes. Masimo actually did sue Apple in Federal court for damages, but the judge declared a mistrial after the jury deadlocked 6-1 in favor of Apple.
- FireBeyond 3y ago
  > Maismo actually did sue Apple in Federal court for damages, but the judge declared a mistrial after the jury deadlocked 6-1 in favor of Apple. To be clear, the mistrial was around "theft of trade secrets", and had nothing to do with the alleged patent infringement.
  - granzymes 3y ago
    The jury heard testimony related to patent infringement. It's true that Masimo chose to seek an award for unjust enrichment from trade secret theft instead of damages related to the patents themselves, but that was a strategic choice on their part. They could have requested damages in that same case.

albntomat0 3y ago

Is there a concrete explanation of what Masimo’s actual innovation was in their patents? They were posted in a previous thread, and the way they were written made it unclear what was actually covered. Is Apple allegedly infringing on the idea of putting a blood oxygen sensor in a watch, a technical innovation in how to do so effectively, or something else entirely?

explaininjs 3y ago
It’s regarding the arrangement of LED’s and sensors in the watch, along with the signal processing needed to get reasonable data out of them. My impression of the whole debacle is that Masimo hired up a bunch of smart people, they invented this tech while being paid next-to-nothing by Masimo (as Masimo didn’t have the product development chops to actually bring anything to market), Apple saw that the tech was good and just neeeed a product/marketing team, Apple tried to acquire Masimo, their CEO tried to play hard to get, so Apple ”stole” (offered compensation commensurate to their technical prowess) all the engineers who actually made the thing and just built it in house from “scratch”. It’s a tricky case to be sure. But I’m all for the outcome where consumers get cool tech and the people who actually made it (notably not the Masimo CEO) get fair compensation for their work. The aspect a lot of people here gloss over is that the patent that Masimo owns wasn’t actually developed by anyone currently at Masimo. Apple “owns” all the people, but Masimo “owns” their accomplishments. It’s weird.
- delecti 3y ago
  Patent law is convoluted sometimes, but that seems like a somewhat charitable description of pretty blatant patent infringement.
  - explaininjs 3y ago
    Right, and the only way laws change is by moneyed individuals testing them. We should be cheering this opportunity for an actually decent precedent to be set by Apple’s patent law army. Though in all likelihood it will be settled out of court.

JCharante 3y ago

That was fast

hedora 3y ago

Note that no court has ruled the Masimo patent is valid. They ran this through an expedited legal procedure that bypasses patent review. In all likelihood, the patent will eventually be tossed out, but that process takes a year or two.

justahuman74 3y ago
I'd presumed that patents are presumed valid unless invalidated (which I think is a problem in itself)
- ClumsyPilot 3y ago
  What? If you presume that a patent is invalid, then what is the patent office for? You pay them to make sure the patent in valid before granting it. Why would one part of the government always preaume that the other part of the government is wrong?
HumblyTossed 3y ago
Isn’t this backwards? They don’t validate a patent but assume it is until it is invalidated.
- hedora 3y ago
  That’s the beauty of this process from a patent troll perspective. It is expedited, and therefore can’t be blocked by having a proper review that could invalidate the patent.
  - andsoitis 3y ago
    > That’s the beauty of this process from a patent troll perspective I know you didn't draw the connection explicitly, but I just wanted to point out that in this particular case, Masimo isn't a patent troll - they're a company that sells actual devices - https://www.masimopersonalhealth.com https://www.masimopersonalhealth.com and is listed on the NASDAQ with market cap of $6 billion.

jmpman 3y ago

Has Masimo stated what their proposed licensing fees would be? $10/watch, retroactively, seems like a reasonable deal. I bought my Apple Watch 6, specifically for that feature, even though I had a perfectly functional Apple Watch 3.

gnicholas 3y ago
Masimo has no reason to state this publicly, and I don't believe they have done so.