A federal jury in California ruled on November 14 that Apple Inc. must pay Masimo Corp. $634 million for infringing a pulse‑oximetry patent that covers the optical sensor technology used in the Apple Watch’s workout mode and heart‑rate notifications. The patent, which expired in 2022, was found to be infringed despite its expiration, and Apple has announced it will appeal the decision.
The verdict is part of a broader legal dispute that began in 2020 and has already led to import bans on Apple Watch Series 9 and Ultra 2 models. The case underscores the growing regulatory scrutiny of health features in consumer wearables and the importance of protecting intellectual property in this rapidly expanding market.
For Apple, the $634 million award represents a sizable legal expense relative to its $400 billion-plus annual revenue, but the more significant impact may be the potential need to redesign or license the pulse‑oximetry technology. Such changes could delay new Apple Watch releases or reduce the availability of blood‑oxygen monitoring in existing models, thereby affecting sales of its wearable division.
Masimo’s financials reveal a challenging operating environment: its gross margin fell to 49.33% from a historical median of 65.16%, and its net margin is –26.1%. The verdict is a major win that strengthens Masimo’s IP portfolio and may help offset margin pressure, but the company still faces profitability challenges in a competitive medical‑device market.
Apple’s spokesperson said the company is pleased with the outcome and remains committed to defending its intellectual property, while Masimo’s leadership described the verdict as a significant victory in protecting its innovations. Both statements highlight the high stakes of IP litigation in the wearable‑health space.
Although no immediate market‑price data is available, the verdict is likely to be viewed as a headwind for Apple Watch sales and a tailwind for Masimo’s IP strategy, prompting investors to reassess the potential impact on Apple’s health‑tech revenue and the cost of ongoing legal defense.
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