Masimo Corp. added one more major win against Apple Inc., the world’s third most valuable public company.
A jury of eight on Nov. 14 agreed that Apple infringed on Masimo’s patent covering pulse oximetry technology in its Apple Watches during a two-year period prior to the patent expiring in 2022.
The trial, held at the U.S. District Court for the Central District of California in the Ronald Reagan Federal Building and U.S. Courthouse, awarded the Irvine-based medical device maker $634 million in damages.
Masimo called the verdict a “significant win.”
“We are pleased by this outcome, and appreciate the time and attention given to our case by the court and the jury,” Masimo said in a statement.
The patent infringement verdict is one of several cases where Masimo has accused Apple of stealing trade secrets and poaching Masimo employees to develop the Apple Watch.
Apple’s main argument was that the Apple Watch is not a patient monitor, so it could not infringe on the patent. Apple said that it disagreed with the decision and will appeal, according to Reuters.
“Over the past six years they have sued Apple in multiple courts and asserted over 25 patents, the majority of which have been found to be invalid,” an Apple spokesperson said in a statement.
“The single patent in this case expired in 2022 and is specific to historic patient monitoring technology from decades ago.”
Shares of Masimo and Apple were relatively unchanged after the verdict was announced. At press time, Masimo traded at $140.94 and a $7.6 billion market cap while Apple was at $267.44 and a $4 trillion market cap (Nasdaq: AAPL, MASI).
A Watch, not a Monitor
This month’s winning verdict isn’t the end of litigation between the two companies.
In a case filed in 2023, Masimo initially sought $3.1 billion, and after more than half of its trade secrets were dismissed, reduced the request to $1.85 billion. A four-week trial took place in 2023 and resulted in a mistrial with a hung jury.
A retrial was held last November where Masimo dropped all requests for monetary damages—instead it’s seeking an injunction against Apple. Judge James Selna, who is presiding over the case, notified both parties that there will be a decision soon.
Last year, a jury in Delaware awarded Apple $250, the statutory minimum, finding that older versions of Masimo’s W1 and Freedom smartwatches infringed on two Apple design patents. The jury, however, found no infringement of any Apple utility patent in Masimo’s current products.
“Apple primarily sought an injunction against Masimo’s current products, and the jury’s verdict is a victory for Masimo on that issue,” Masimo said in a statement at the time.
In 2023, Masimo convinced the U.S. International Trade Commission to block imports of Apple’s Series 9 and Ultra 2 smartwatches using Masimo’s disputed technology.
Apple, which redesigned some watch models to adhere to the ruling, appealed the decision.
In August, Masimo sued U.S. Customs and Border Protection over its ruling that allowed Apple to restore blood-oxygen technology back into its watches, reversing the ITC’s import ban.
Most recently, the ITC on Nov. 14 announced that it would investigate the redesigned Apple Watches for a potential import ban. The investigation is expected to take no longer than six months, according to the ITC.
Former CEO’s Stake in Masimo Revealed
Founder and former chief executive Joe Kiani’s stake in the company was updated this month.
Kiani now owns 6.3 million shares, or 11.1% of the company, which is worth about $925 million, according to a Nov. 12 filing.
He is currently seeking $100 million in damages from the company’s six board directors affiliated with activist investor Politan Capital Management, alleging they failed to pay him a $400 million severance payout.
After resigning as CEO last year, Kiani filed a lawsuit against Masimo to secure a $400 million pay package, which includes a base salary of $1 million per year, that’s defined in his employment agreement.
He’s also asking for options to purchase 300,000 shares of Masimo common stock at $38.76 per share; Masimo today closed at $143.88 and a $7.7 billion market cap at press time.
