Masimo Takes Apple's Hail Mary Pass in Stride

Masimo CEO Joe Kiani seems to be taking the latest twists and turns in the company's patent battle with Apple in stride.

"We were happy that we got our injunction as a patent owner and a company that makes products that are competing in that space. That's ultimately what we wanted," Kiani said Tuesday during Masimo's fourth-quarter earnings call, in response to an analyst asking for an update on the status of the litigation with the tech giant.

The U.S. International Trade Commission (ITC) ruled last October that the latest Apple Watch models infringed upon two of Masimo's patents for pulse oximeters. Apple preemptively halted sales of the Apple Watch Series 9 and Apple Watch Ultra 2 products ahead of the ITC ban going into effect December 26.

Not surprisingly, the Cupertino-based tech giant promptly filed an appeal. While the ban impacted the company's newest Apple Watch models, the company has included the blood oxygen measurement feature in its watches starting with the Apple Watch Series 6 released in 2020.

The import ban lasted only a day before Apple convinced a U.S. federal appeals court to halt the ban while the federal circuit considered whether the appeal should put the ITC's decision on hold.

In another victory for the smaller contender, the federal court upheld the earlier ruling, forcing Apple to disable the blood oxygen feature from the Apple Watch Series 9 and Ultra 2.

Related:Apple Is Forced to Decontent Its Newest Smartwatches

But of course, this patent war is far from over.

"Apple is doing a Hail Mary with a federal court," Kiani said, referring to Apple's appeal.

"We hope in the future to broaden our injunction, hopefully beyond just SpO2 as well as beyond the U.S., and hopefully get our damages for the infringement," Kiani said. "So those cases are pending, and we hope to have a trade secret case and patent case in California this year."

However, he added, the court in California just ruled that it is pausing Masimo's patent cases in the state, pending the outcome of Apple's appeal with the federal court.

"Assuming they lose that, which we think they will hopefully, we'll have the patent and the trade secret case together here in California before the year-end."

But that depends on the speed at which the federal case progresses. Kiani said a new federal judge has been assigned to the case.

"She has a very busy schedule. So while we thought for sure we were going to be in trial in Delaware in 2024, we're not certain of that at this point. We might but we might not. It might push to 2025."

Meanwhile, Masimo enjoys FDA clearance to sell W1 medical watch

Late last year, FDA cleared the medical version of Masimo's W1 watch for both prescription and over-the-counter use.

IMAGE COURTESY OF MASIMO

Masimo touts that the W1 is the first FDA-cleared watch provide continuous oxygen saturation (SpO2) and pulse rate (PR) for OTC and prescription use. The clearance expanded the indications for the W1 in the United States as a medical device for adults to use in hospitals, clinics, long-term care facilities, and at home.