IP Law Daily, PATENT—D. Del.: Masimo's inequitable conduct counterclaims dismissed in Apple’s smartwatch patent suit, (Oct 9, 2024)

By Saurabh Kashyap, B.A., LL.B., LL.M.

There was evidence of intent to deceive or omission of inventors in Apple's design and utility patent filings.

The federal district court in Delaware granted plaintiff Apple Inc.’s motion for summary judgment, dismissing defendant Masimo Corporation’s inequitable conduct counterclaims in a patent infringement lawsuit. The court found that Masimo failed to prove that Apple intentionally withheld material information from the U.S. Patent and Trademark Office (USPTO) during prosecution of its patent applications (Apple Inc. v. Masimo Corp., No. 1:22-cv-01377-JLH (D. Del. Oct. 7, 2024)).

Background. The plaintiff/counter-defendant, Apple Inc., is a global leader in technology, known for its consumer electronics, software, and services. The defendant/counter-plaintiff, Masimo Corporation, specializes in noninvasive monitoring solutions, while its subsidiary, Sound United, LLC, manufactures high-end audio products.

In this lawsuit, Apple asserted both design and utility patents. The asserted design patents include U.S. Patent Nos. D883,279 (D’279), D947,842 (D’842), D962,936 (D’936), and D735,131 (D’131), which cover the ornamental aspects of the Apple Watch, such as the back electrode design and the charging unit. The asserted utility patents include U.S. Patent Nos. 10,627,783 (’783), 10,942,491 (’491), 10,987,054 (’054), 11,106,352 (’352), and 11,474,483 (’483), which protect functional elements such as the health monitoring systems integrated into Apple’s smartwatch.

Apple filed this lawsuit claiming that Masimo's “W1” smartwatch infringed its design and utility patents. Apple argued that the W1's back electrode design and the redesigned charger infringed its design patents. Apple also claimed that the health monitoring features in Masimo's W1 infringed its utility patents. In response, Masimo countered that Apple's patents were invalid and unenforceable due to inequitable conduct, alleging that Apple had omitted key inventors and failed to disclose the functional nature of the designs. Apple then moved for summary judgment to dismiss Masimo’s inequitable conduct counterclaims.

Contributions to design and role of engineers. A central part of Masimo’s argument was that Apple omitted key engineers who had contributed to the functional aspects of the Apple Watch, particularly its optical sensors and electrodes, from its patent applications. However, the court clarified that design patents protect the ornamental features of a product, not its functional aspects. The court, citing Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312 (Fed. Cir. 2015), reiterated that a design patent remains valid even if some features serve a functional purpose.

Masimo also contended that these engineers should have been named inventors on Apple's design patents. However, testimony from Apple's named inventors and engineers revealed that the engineers involved in the functional design did not believe they should be named inventors, as the patents protected the aesthetic and ornamental aspects of the Apple Watch, not the functional ones. The court also referenced Pro-Mold and Tool Co., Inc. v. Great Lakes Plastics, Inc., 75 F.3d 1568 (Fed. Cir. 1996), to highlight that failing to name someone as an inventor does not amount to inequitable conduct if that person does not claim inventorship. The court concluded there was no intent to deceive in omitting these engineers from the patent applications.

Functional nature of designs. Masimo further argued that Apple failed to disclose the functional nature of the Apple Watch’s design to the USPTO. However, the court rejected this claim, citing L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117 (Fed. Cir. 1993), which established that the functionality of a product does not invalidate its design patent. The court found that Apple’s design patents legitimately covered the ornamental features of the watch and that there was no evidence to suggest that Apple’s inventors or patent attorneys deliberately withheld material information about the functionality of the design.

The court further noted that testimony from Apple’s inventors consistently indicated that the designs in question were ornamental, reinforcing the view that no misrepresentation occurred regarding the functional nature of the designs.

Conclusion. Ultimately, the court found that Masimo failed to provide clear and convincing evidence to support its inequitable conduct claims. It determined that there was no indication that Apple’s inventors or patent attorneys acted with intent to deceive the USPTO by omitting inventors or failing to disclose material information. Thus, the court granted Apple's motion for summary judgment, dismissing Masimo's inequitable conduct counterclaims.

The Case is Nos. 1:22-cv-01377-JLH and 1:22-1378-JHL.

Judge: Hall, J.

Attorneys: David Ellis Moore (Potter Anderson & Corroon, LLP) for Apple Inc. John C. Phillips (McLaughlin & Hall, P.A.) for Masimo Corp.

Companies: Apple Inc.; Masimo Corp.

Cases: Patent DelawareNews