Barend van de Wal, January 16 2024

Recently, it was reported that Apple had to modify the software for its Apple Watches to avoid infringing on several U.S. patents owned by Masimo Corporation and Cercacor Laboratories, Inc. Masimo and Cercacor are American companies that develop and manufacture high-quality pulse oximeters, supplying, among others, hospitals.

A pulse oximeter measures the oxygen level in the blood. It typically works by emitting two different colors of light through a person’s skin. The device then measures how much of each color is reflected by the blood. Oxygen-rich blood, which appears bright red, and oxygen-poor blood, which appears dark red, reflect these colors in different ways. By analyzing the intensity of the reflected light, the ratio of oxygen-rich to oxygen-poor blood can be determined, allowing for the calculation of the blood oxygen level.  In some cases, the measurement also takes the person’s heart rate into account to reduce sensitivity to interference from other tissues. Unlike blood, the light transmission properties of tissues such as skin and nails remain largely unchanged by the heartbeat.

Masimo and Cercacor devised smart methods to measure blood oxygen levels even more accurately. To obtain patent protection for these innovations, they filed multiple patent applications in the U.S. several years ago. Eventually, several patents were granted (Google patents links: US 10,912,501,  US 10,912,502, US 10,945,648,  US 10,687,745, and US 7,761,127).

After these patents were granted, it became evident that the pulse oximeter in the Apple Watch infringed on several of them. As a result, a U.S. court prohibited Apple from importing these Apple Watches into the U.S. Apple Watch sales were estimated at approximately $20 billion in 2023, making this ban a costly one for Apple. Although Masimo and Cercacor invited Apple to obtain a license, Apple has so far declined the offer.

Instead, Apple implemented a software update that, according to the U.S. court, ensures that Apple Watches no longer fall within the scope of the patents’ protection.

For the time being, Masimo and Cercacor will not receive any licensing revenue from Apple. However, they will (at least for now) retain their monopoly on certain advanced methods for measuring blood oxygen levels. Their existing customers, who value highly accurate and consistent measurements, have good reason to continue relying on Masimo and Cercacor.

Apple, prompted by the ban, has been driven to develop its own improvements for blood oxygen measurement, which may, in turn, advance scientific progress. However, Apple has suffered damages due to the ban. Additionally, measurements using the new Apple software may differ slightly from those obtained with the original software. If this proves problematic for Apple, the company may still decide to obtain a license after all.