A full-scale legal battle is brewing after the Biden administration refused to veto an import ban by the International Trade Commission (ITC) on the Apple Watch.
The ITC ruled last December that Apple had infringed patented wearable heart-monitoring technology from California startup AliveCor. Apple currently uses the respective EKG sensor in high-end Apple Watch models.
US Trade Representative Catherine Tay on Tuesday authorized the implementation of the ITC’s decision, despite Apple’s apparent lobbying efforts to get the Biden administration to block a possible ban on its popular smartwatch.
From here, the two companies are preparing to enter into a long-term legal dispute. Here’s what happens next.
An appeals court will decide the fate of Apple
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 led to a suspension of the ITC’s Apple Watch import ban.
AliveCor is appealing the PTAB’s decision, while Apple is appealing the ITC’s ruling. A federal appeals court will ultimately decide whether Apple Watches will face an import ban.
Appeals courts typically align with a PTAB decision about 75 percent of the time, which gives Apple an early advantage, said William Mandir, a partner at law firm Sughrue Mion.
“Overall, it’s an uphill battle, and on the face of it it seems to be in Apple’s favor,” Mandir said. “But you’ll have to really dive into the details to see the merits of an appeal.”
AliveCor first shared its technology with Apple in 2015 in hopes of securing a partnership with the tech giant.
The startup said Apple introduced Apple Watch models in 2018 that had built-in heart-monitoring sensors — and prevented third-party app providers from accessing users’ heart rate data — forcing AliveCor to cancel sales of the heart-monitoring accessory for the Apple Watch.
These claims would be moot if the Court of Appeal affirmed the PTAB ruling. Apple said in court filings that it began developing and patenting its own heart monitoring systems more than a decade ago.
“The patents on which AliveCor’s case remains are invalid, and for that reason, we must ultimately prevail in this matter,” an Apple spokesperson said in a statement.
The import ban isn’t going to happen any time soon
The appeals process is expected to extend into mid-2024, as the general timeline for PTAB appeals is 12 to 18 months, according to AliveCor.
This means Apple Watch models won’t face import bans for some time, and Apple could explore several ways to avoid the ban altogether.
AliveCor is pushing for a settlement where Apple pays the startup to license its heart-monitoring technology. That would prevent an import ban on the Apple Watch, but AliveCor said Apple has not shown interest in the stability.
“We can license our IP to them tomorrow or the next second if they want to, but they don’t want to have a conversation,” Priya Abani, CEO of AliveCor, told The Hill.
Even if Apple loses the appeal and chooses not to settle, the company can still keep Apple Watch sales alive by making modifications to the device.
“They would have to remove or disable the feature that was found to be infringing. Another option is that they can keep the feature if there is a way to redesign it so that it still works but doesn’t infringe the patent,” said John Rabin, managing partner at Sughrue Mion. “The clocks won’t go away, but maybe a feature will.”
The Apple Watch has raised other legal challenges
AliveCor is pursuing a separate antitrust lawsuit against Apple, which it expects to go to trial in early 2024.
The startup claims that Apple made software updates accompanying the introduction of its heart-monitoring app that prevented other companies from accessing Apple Watch users’ heart rate data, preventing competition and blocking AliveCor users.
“With one update, Apple eliminated the competition that consumers clearly wanted and needed, denying them the choice of better heart rate analysis than what Apple could offer,” AliveCor wrote in its report. May 2021 complaint. “And all in order to increase the value of a company that is already worth $2 trillion.”
Apple argued It is under no obligation to provide its platform for use by another company.
Federal judge in March 2022 verdict against Apple’s attempt to dismiss the lawsuit, stating that the purpose of the update is “to prevent third parties from identifying cases of irregular heart rate and from offering competing apps for heart rate analysis.”
Abani said Apple frequently uses a similar tactic with other app developers to crush competition, displacing users with fewer options and less innovative technology. The AliveCor lawsuit has been described as a “David vs. Goliath battle” with huge implications for the future of US startups.
Apple took another hit last month when a judge at the International Trade Center ruled that Apple had infringed pulse oximeter sensors patented by medical technology company Masimo.
The case will come before a full commission this year, when the ITC could impose another import ban on Apple Watch models that use the technology.
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