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Further to a report we heard last week from Bloomberg’s Mark Gurman, Apple’s developers are still hard at work on software updates to ensure the Apple Watch’s blood oxygen detection system does not violate the patents that led to the ban on the sales of the Apple Watch Series 9 and the Apple Watch Ultra 2.
The ban went into effect on December 25, but Apple appealed the decision to the US Court of Appeals for the Federal Circuit, which granted a stay on the ban that should last at least until January 15, when the ITC will make a final judgment on whether the stay should remain in place for the entire duration of Apple’s appeal.
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As a result, the Apple Watch Series 9 and Ultra 2 have made a triumphant return to Apple’s US brick-and-mortar and online stores.
Howver, a new Bloomberg report indicates that Apple is not resting on its laurels, as it’s still working to avoid a permanent sales ban by submitting an Apple Watch software update to US Customs that could bypass the ban by disabling or modifying features that infringe upon the patents in question.
If approved, the update would result in Apple being allowed to continue importing and selling the Apple Watch Series 9 and Apple Watch Ultra 2 even if the appellate court doesn’t grant a full stay of the ban.
If Apple’s software fixes pass inspection by customs, the two Apple Watches could go back on sale as soon as January 12, which could render the court decision largely irrelevant.
However, such a decision might be a two-edged sword, as the ITC has said that approval by the Customs tribunal would only reinforce the court’s original decision since it suggests Apple would be tacitly admitting that it infringed Masimo’s patents by working around them.
That forthcoming Customs decision on the redesigns has no bearing on the status of the infringing Apple Watch products, and in fact, a favorable decision by Customs would further undermine any assertion of irreparable harm. ITC, in a December 26 response letter to the Federal Circuit Court
Apple is “working desperately” to pull all available levers “to try and procedurally shut down the ITC by getting a stay from somebody,” said Smith R. Brittingham IV, who heads the ITC litigation practice at Finnegan, Henderson, Farabow, Garrett & Dunner LLP.
Brittingham says Apple is taking a multi-pronged approach to the problem, and Masimo will likely be left without recourse if Customs says Apple’s revamped software works. Apple can also continue to appeal to the US Court of International Trade and then the Federal Circuit Courts again in an effort to continue to sell the Apple Watch.
If Apple receives approval from Customs, Masimo has no appeals process, as the company is not a part of the Customs process. The ITC and Customs are two separate entities; Masimo’s case resides within the patent system and the ITC, while Customs’ job is to enforce the ITC ruling.
Masimo’s only recourse would be to file a new ITC petition claiming a violation of the sales ban on Apple’s part. However, the company would be required to prove that the updated software still infringed on Maismo’s patents. Then Apple would once again appeal, and the vicious circle would continue, making the lawyers ever richer.
While Masimo has said that it’s willing to settle the patent dispute with Apple, the Cupertino firm has not yet reached out to begin negotiations. Some observers believe Apple could be taking a stand to make an example of Masimo to patent trolls — although Masimo doesn’t meet the definition of a “patent troll” since it’s actually developed the disputed technology rather than simply buying the patents from another party.
