Despite Apple, Inc’s ongoing patent dispute with medical device company Masimo over the Apple Watch’s blood oxygen monitor, the tech giant can still sell its new models, however, sales may be halted if upcoming rulings are not in their favor.
The US International Trade Commission (ITC) found that Apple infringed two Masimo patents and they swiftly banned imports of the Apple Watch that included the infringing technology. The ban occurred on December 26, however, it only lasted one day before the Federal Circuit put it on hold to consider Apple’s request to allow imports while it appeals the decision.
Apple’s motion is set to be completed by January 15, and in the meantime, the tech giant created redesigned versions of the latest Apple Watch models and asked the US Customs and Border Protection (CBP) to rule that they do not infringe. According to Apple, CBP is hoping to decide by January 12, which could allow Apple to import its redesigned watches, even if the Federal Circuit reinstates the ITC’s order.
The ITC ruled that Apple cannot import its watches that infringe Masimo’s patents into the US, however, the CBP ultimately has the power to enforce it, which is why Apple has asked them to rule that its redesigned Apple Watches do not infringe.
According to Finnegan partner, Smith Brittingham, The ITC's order tells CBP to keep infringing Apple Watches from entering the U.S., so the agency now has to determine if the redesigned products must be excluded.
"Customs, to their credit, has recognized that these redesign disputes need to be resolved on a fairly expedited basis," he told Law360.
The agency's Exclusion Order Enforcement branch has a process where both sides can present arguments, with a decision issued in a few months. Litigants can also ask the ITC to make the determination, but that generally takes longer, Smith said, "so that is the reason you would do this before Customs rather than before the ITC is speed."
Regardless of how CBP rules, this may not end the case. If they decide that the redesigned watches still infringe and can’t be imported, Apple can then ask the US Court of International Trade to review that finding, and that court’s decision is appealable to the Federal Circuit.
"Anything that comes from the ITC will be binding on Customs. So if Customs allowed the goods to come in and then later the ITC said, 'No, those were infringing and that's a violation of exclusion,' Customs has to basically reverse themselves."
Speaking on how the ban would impact business, Smith said irreparable harm could be challenging for Apple to demonstrate. Unlike smaller companies whose existence could be in jeopardy if imports of a key product were banned, the Apple Watch is a comparatively small part of Apple's product line, he noted.
"Apple is not going out of business just because they can't sell an Apple Watch," he said. "And that argument gets even less effective for Apple if they're allowed to sell the redesigned alternative."
“Or they could settle and put this whole thing to bed," Brittingham said.
Read “Future Apple Watch Sales Hinge on Next Steps in Patent Row”
