An extensive legal battle is brewing after the Biden administration refused to veto an International Trade Commission (ITC) import ban on the Apple Watch.
The ITC ruled in December that Apple infringed wearable heart monitoring technology patented by California startup AliveCor. Apple currently uses an electrocardiogram sensor in question in its high-end Apple Watch models.
U.S. Trade Representative Katherine Tai on Tuesday allowed the ITC decision to go through despite Apple’s apparent lobbying to get the Biden administration to block the potential ban on its popular smartwatch.
From here, the two companies will enter into a lengthy legal dispute. This is what will happen next.
The appeals court will decide Apple’s fate
The Department of Commerce’s Patent Trial and Appeal Board (PTAB) ruled in December that the AliveCor patents at the center of the ITC case were invalid. The PTAB decision put the ITC’s Apple Watch import ban on hold.
AliveCor is appealing the PTAB ruling, while Apple is appealing the ITC ruling. A federal appeals court will ultimately decide whether Apple Watches get an import ban.
William Mandir, a partner at Sughrue Mion, an intellectual property law firm, said appeals courts sided with the PTAB decision in about 75 percent of cases, giving Apple an early advantage.
“Overall, it’s an uphill battle, which at first glance seems to be in Apple’s favor,” Mandir said. “But you would really have to dive into the details to see what the merits are on appeal.”
AliveCor first shared its technology with Apple in 2015 in hopes of securing a partnership with the tech giant.
The startup said that in 2018 Apple introduced Apple Watch models with built-in heart-monitoring sensors — and blocked third-party app providers from accessing users’ heart-rate data — forcing AliveCor to cancel sales of its Apple Watch heart-monitoring accessory.
Those claims would be moot if an appeals court upheld the PTAB’s ruling. Apple said in court filings that it first started developing and patenting its own heart monitoring systems more than a decade ago.
“The patents on which AliveCor’s case rests have been found to be invalid and as such, we should ultimately prevail in this case,” an Apple spokesperson said in a statement.
Import ban won’t happen anytime soon
The appeals process is expected to drag on into mid-2024, as the general timeline for PTAB appeals is 12 to 18 months, AliveCor said.
This means that Apple Watch models will not be subject to an import ban for the time being and that Apple could explore different ways to circumvent the ban completely.
AliveCor is pushing for a settlement where Apple pays the startup to license its heart monitoring technology. That would prevent an import ban on Apple Watch, but AliveCor said Apple has shown no interest in a settlement.
“We can license them our IP address tomorrow or the next second if they want, but they don’t want a conversation. It’s all about litigation rather than innovation,” AliveCor CEO Priya Abani told The Hill.
Even if Apple lost the appeal and chose not to settle, the company could maintain Apple Watch sales by making adjustments to the device.
“They should remove or disable the feature that was found to be infringing. Another option is they can keep the feature if there’s a way to redesign it so it still works but doesn’t infringe on the patent,” said John Rabena, managing partner of Sughrue Mion. “The watches wouldn’t disappear, but maybe a function.”
Apple Watch led to other legal challenges
AliveCor is pursuing a separate antitrust suit against Apple, expected to go to trial in early 2024.
The startup claims Apple made software updates when it introduced its own heart monitoring app that prevented other companies from accessing Apple Watch users’ heart rate data, blocking competition and cutting off AliveCor users.
“So, with a single update, Apple eliminated the competition that consumers clearly wanted and needed, leaving them with no choice for heart rate analysis better than what Apple can offer,” AliveCor wrote in its May 2021 complaint. incremental increase in value for a company already worth $2 trillion.”
Apple argued that it is not required to make its platform available for use by another company.
A federal judge ruled against Apple’s bid to dismiss the lawsuit in March 2022, stating that the purpose of the update was to “prevent third parties from identifying irregular heart rate situations and offering competing heart rate analysis apps”.
Abani said Apple often uses a similar tactic with other app developers to squash competition, leaving users with fewer choices and less innovative technology. She described AliveCor’s lawsuit as a “battle between David and Goliath” with huge implications for the future of US startups.
Apple suffered another blow last month when an ITC judge ruled that Apple infringed pulse oximeter sensors patented by medical technology company Masimo.
The case will go before the full committee this year, where the ITC could issue another import ban on Apple Watch models using the technology.
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