Apple and Masimo will appear in court this week in California. Masimo will insist during the hearing that Apple illegally poached its employees and stole its trade secrets when developing smartwatches. Apple, in turn, will try to convince the court of its innocence and prevent Apple Watch sales from being blocked.
Image source: apple.com
Masimo filed its first lawsuit against Apple in 2020, and a jury trial took place in 2023. During the trial, the court rejected more than half of Masimo’s trade secret claims, but in the end the trial was declared a mistrial because the jury was unable to reach a final decision: six of the seven jurors sided with Apple, and the remaining Masimo supporter did not change his mind. The two companies had to retry the case with a different jury, but Masimo dropped all claims for monetary damages in order to have the case tried by a professional court – without a jury. The plaintiff initially sought damages in the amount of $1.85 billion, reasonable royalties, lost profits and penalties for fraudulent misappropriation of trade secrets.
Masimo is now not seeking monetary damages, but wants an injunction against the Apple Watch. During the process, it will be determined whether there have been violations of trade secrets, after which the court will consider the plaintiff’s arguments for an injunction. Given that most of the claims in the case have been dismissed, it is unclear what kind of injunctive relief Masimo might seek. During the trial, Masimo accused Apple of violating 17 patents, but after an examination by the US International Trade Commission (ITC), 15 of them were declared invalid – consideration of the patent part of the dispute in the trade secret case was suspended.
In just the past five years, Masimo has faced off against Apple in three cases. Masimo achieved a ban on the sale of the devices that became the subject of the dispute, but this was not a disaster for Apple’s business – the company disabled this function at the software level and continued to sell smart watches, which are actually equipped with an oxygen sensor. It is believed that the prospects for a new trial for Masimo remain vague.
Note that Masimo’s new trade secret lawsuit against Apple is separate from both the ITC’s decision to ban the sale of Apple Watch models with a blood oxygen sensor and the patent infringement lawsuit Apple filed against Masimo. Apple appeals ITC ban on smartwatches. The ITC decision causes significant damage to Apple – the company cannot sell smartwatches with a blood oxygen sensor in the United States. Apple believes an appeals court will overturn the department’s decision, and the component will be returned to devices sold in the United States.
To get a sales ban, Masimo had to prove that it itself used patents that, according to its version, Apple violated, so Masimo rushed to release its own smartwatch in 2022, deliberately copying several Apple patents. The device, called the Masimo W1 Freedom, was the subject of a patent lawsuit Apple filed against Masimo, and last week a jury ruled that Masimo’s smartwatch infringed patents related to the Apple Watch. Apple requested only $250 in damages – the purpose of the claim was not to obtain funds, but to force Masimo to stop copying the Apple Watch design.