Masimo Corp. Accuses CBP of Undermining ITC Exclusion Order on Apple Watches

Masimo accused CBP of issuing an ex parte ruling in August permitting Apple to import watches that can be used with iPhones already in the U.S. to "perform the same functionality that the ITC found to infringe Masimo’s patents." The company said that CBP's action "effectively nullified" the LEO, exceeded the agency's statutory authority, and denied Masimo its due process rights.

The International Trade Commission had issued a 2023 limited exclusion order after finding that Apple’s watches infringed Masimo’s patents related to "light-based pulse oximetry technology." In 2024, the U.S. Court of Appeals for the Federal Circuit denied Apple’s request for a stay of the LEO (see 2401180073).

Following the LEO, Apple proposed a redesign of its watches that CBP determined could be imported "only to the extent the infringing functionality was completely disabled." Apple then proposed a "superficial modification" allowing the watches to activate the latent pulse oximetry hardware on an iPhone, which Masimo said was "expressly intended to circumvent the ITC’s exclusion order."

After Apple announced in August that its watches would be able to provide blood oxygen monitoring services following a recent Customs ruling, Masimo contacted Apple and received a redacted copy of the ruling. Masimio said that it was "unaware of any new ruling by CBP" because neither Apple nor the agency had provided the company with notice of a new proceeding. Masimo was therefore provided no opportunity to participate in the proceedings, the company said.

Masimo said that in the ruling, CBP suggested that Apple could "overcome CBP’s prior infringement analysis by simply importing its watches and iPhones separately." CBP employed the "logical fallacy of 'denying the antecedent'" in the ruling, Masimo said, by concluding that a prior decision holding “if the articles are in the same shipment, then they are excluded” meant that “if the articles are not in the same shipment, then they are not excluded.”

Masimo said that CBP then "appeared to raise" the concept of indirect infringement to "suggest that adjudicating the watch-plus-iPhone combination had somehow traveled beyond its jurisdiction." CBP therefore released the offending watches to avoid applying a theory of indirect infringement, Masimo said, "effectively reversing its second administrative decision and endorsing a direct violation of the ITC’s exclusion order."

CBP's ruling is "arbitrary and capricious for multiple reasons," Masimo said. It accused CBP of adopting a "self-imposed rule" against indirect infringement without "adequate justification." The company said that this creates a "loophole" in LEO enforcement by addressing only the direct infringement of watches in isolation, "even when those watches are being imported for the express purpose of being paired with ... phones to carry out the function barred by the ITC’s Order." In so doing, Masimo accused CBP of issuing a ruling that "effectively modified the LEO."

Masimo also accused CBP of exceeding its statutory authority and "impermissibly" encroaching on the ITC's jurisdiction. The agency "lacks the statutory authority to impose self-limiting rules that have the effect of nullifying the ITC’s exclusion orders," Masimo said, because its role is to enforce the ITC's orders, and not to create "loopholes that render them ineffective." The ruling therefore represents an "ultra vires attempt to exercise authority" allocated for the ITC, Masimo said.

Finally, Masimo accused CBP of violating its due process right by "failing to provide any notice" to the company of the ruling, by conducting the proceedings ex parte, "despite Plaintiff being a directly affected party," and by "issuing a ruling with immediate effect before Plaintiff had any opportunity to review or challenge it."