Patents

Apple's Watch Stays Banned: The Federal Circuit Affirms the Masimo Section 337 Exclusion Order

The Federal Circuit upheld the ITC's import ban on certain Apple Watch models, validating Masimo's pulse-oximetry patents and a domestic industry built on prototypes.

March 26, 2026
A smartwatch on a wrist with a green optical heart-rate sensor glowing on the underside
The dispute turns on the light-based blood-oxygen sensor on the back of the Apple Watch. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In Apple Inc. v. International Trade Commission, No. 2024-1285 (Fed. Cir. Mar. 19, 2026), the United States Court of Appeals for the Federal Circuit affirmed the U.S. International Trade Commission’s determination that certain Apple Watch models violate Section 337 of the Tariff Act of 1930 by infringing patents owned by Masimo Corporation and its affiliate Cercacor Laboratories. The decision, authored by Judge Stark, leaves in place the limited exclusion order and cease-and-desist order that the Commission issued on October 26, 2023, in Certain Light-Based Physiological Measurement Devices and Components Thereof, Inv. No. 337-TA-1276. Those orders took effect after the 60-day presidential review period, on December 25, 2023, and prompted Apple to disable the blood-oxygen feature on the Apple Watch Series 9 and Ultra 2 units it continued to sell in the United States. The appellate court’s affirmance confirms that the trade remedy survives Apple’s full menu of challenges to claim construction, validity, the domestic-industry requirement, and prosecution laches.

At a glance

  • Forum and disposition: Federal Circuit affirmance of an ITC final determination; the import ban stands.
  • Patents: U.S. Patent Nos. 10,912,502 and 10,945,648, directed to wearable light-based measurement of blood-oxygen saturation using optical emitters and photodetectors.
  • Remedy: A limited exclusion order barring importation of infringing Apple Watch models, plus a cease-and-desist order against domestic sales of previously imported inventory.
  • Headline holdings: The Commission may find a satisfied domestic industry built on a collection of prototypes, and may credit R&D investments in earlier non-practicing iterations that “directly led” to a patent-practicing product; Apple’s prosecution-laches defense fails.
  • What it does not resolve: Whether Apple’s redesigned, iPhone-mediated blood-oxygen calculation falls outside the order — a separate ITC proceeding addressed that question, with the ITC closing the enforcement matter in April 2026.

Section 337 and the architecture of an exclusion order

Section 337 of the Tariff Act, codified at 19 U.S.C. § 1337, makes it unlawful to import articles that infringe a valid and enforceable U.S. patent, but only where a domestic industry “relating to the articles protected by the patent” exists or is in the process of being established. The statute is not an ordinary damages regime. The Commission does not award money; its principal weapons are the exclusion order, enforced at the border by U.S. Customs and Border Protection, and the cease-and-desist order, which reaches inventory already inside the country. That structure makes the ITC an unusually potent venue for a patentee whose adversary depends on a global supply chain — as Apple, which assembles its watches abroad, plainly does.

The Masimo investigation followed the canonical path. Masimo filed its complaint in June 2021. An administrative law judge issued an initial determination in January 2023 finding a Section 337 violation as to claims of the asserted patents, and the full Commission issued its final determination on October 26, 2023, affirming the violation in part while modifying several subsidiary findings. The remedy was a limited exclusion order — “limited” because it reaches only the named respondent’s infringing articles rather than all infringing goods from any source — coupled with a cease-and-desist order. Apple’s appeal placed the entire edifice before the Federal Circuit, and the court’s affirmance means the orders continue to operate.

What gives the case its broader importance is not the existence of the remedy but the durability of its foundation. Apple did not merely contest infringement; it attacked the predicate that Masimo had a qualifying domestic industry at all, and it raised an equitable defense, prosecution laches, that has rarely succeeded but periodically resurfaces as a tool against patentees accused of strategic claim-drafting. The Federal Circuit rejected each line of attack, and in doing so clarified two recurring questions about the domestic-industry requirement.

The domestic-industry requirement: prototypes and prior iterations

Section 337’s domestic-industry requirement has two components. The “technical prong” asks whether the complainant’s own articles actually practice the asserted patent. The “economic prong” asks whether the complainant has made qualifying domestic investment — in plant and equipment, labor and capital, or engineering and research and development — with respect to those articles. Apple challenged both, and lost on both.

On the technical prong, Apple argued that the Commission could not rest a domestic industry on a set of prototype units, contending in substance that a single, identifiable commercial article was required. The Federal Circuit disagreed, holding that “the Commission can consider whether a collection of prototypes satisfies the technical prong.” That holding matters well beyond wearables. Complainants in fast-moving technology fields frequently litigate before a polished commercial product exists, or where the patented features live in development hardware rather than a single shipping SKU. The court’s recognition that a portfolio of prototypes can carry the technical prong gives such complainants room to establish a domestic industry on the strength of their engineering record.

The economic prong produced the opinion’s most consequential reasoning. Apple argued that Masimo could not count investments poured into earlier device iterations that did not themselves practice the asserted claims. The Federal Circuit held that the ITC may credit those investments where they “directly led to the development of the significant technical features of an ultimate patent-practicing commercial product” — investments, in other words, that were “specifically tailored” to the development of the patent-practicing article. This is a meaningful clarification of how far upstream the economic prong reaches. R&D rarely proceeds in a straight line from concept to a single patent-practicing product; it proceeds through generations of non-practicing prototypes. By allowing the Commission to credit that earlier, foundational spend, the court aligns the domestic-industry analysis with the realities of iterative engineering — and makes it harder for respondents to slice a complainant’s investment history into disqualifying pieces.

Prosecution laches and the limits of an equitable escape hatch

Apple’s most aggressive defense was prosecution laches — the doctrine that bars enforcement of a patent obtained after unreasonable and prejudicial delay in prosecution. The defense has teeth in extreme cases, but the Federal Circuit has repeatedly described it as reserved for “egregious” abuse of the patent system, and the court reaffirmed that framing here. It found “continuous prosecution activity” across the relevant period and no evidence that Masimo had manipulated the timing of its claims to ambush Apple’s products. The defense therefore failed.

The result is a useful reminder of the asymmetry built into prosecution laches. The doctrine demands proof of both unreasonable delay and prejudice, and continuous, documented prosecution activity is largely fatal to the first element. For accused infringers, the lesson is that laches is not a general-purpose tool for attacking older patents whose claims happen to read on a later-arriving product; it requires the kind of gamesmanship the record here did not show.

Open questions

The affirmance settles the validity and infringement of the asserted claims and the legitimacy of the remedy, but it leaves the most commercially significant question to a different track. The exclusion order reaches “infringing” Apple Watch models — and Apple responded to the original orders by redesigning its product so that the blood-oxygen value is computed on a paired iPhone rather than on the watch itself. Whether that redesign escapes the order is not a question the Federal Circuit decided. An ITC administrative law judge addressed the redesign in a separate proceeding, issuing a recommended determination that the iPhone-mediated approach does not infringe — reportedly just one day before the Federal Circuit’s affirmance issued — and the Commission closed the enforcement matter in April 2026. The juxtaposition is striking: the patentee won the appeal that validated its patents and remedy on the same week the accused infringer effectively neutralized that remedy through redesign.

A second open question is doctrinal reach. The court’s “directly led” and “specifically tailored” formulations for crediting prior-iteration investment will require line-drawing in future investigations. How attenuated can the connection be between a non-practicing prototype’s R&D and the eventual patent-practicing product before the investment no longer counts? The opinion supplies a direction but not a bright line.

Implications

  • The ITC remains the venue of choice for patentees facing import-dependent rivals. A border remedy that money cannot fully substitute for retains its leverage even against the largest manufacturers.
  • Domestic industry just got easier to prove for iterative developers. Prototype collections can satisfy the technical prong, and foundational R&D in non-practicing predecessors can satisfy the economic prong.
  • Prosecution laches remains a narrow defense. Continuous prosecution activity will usually defeat it; accused infringers should not over-invest in the theory absent evidence of timing abuse.
  • Design-arounds, not appeals, may be the decisive battleground. Apple’s redesign — moving a feature off the excluded article — illustrates that the most effective response to a Section 337 order can be engineering rather than litigation.
  • Feature-level exclusion has a feature-level cure. When a remedy targets a discrete capability, relocating that capability can take a product outside the order’s scope, as the parallel ITC proceeding suggests.

Frequently asked questions

Does this decision mean the Apple Watch is banned in the United States? It means the import ban on the infringing models stands. Apple long ago adjusted its U.S.-sold watches — first by disabling the blood-oxygen feature, later by moving the calculation to a paired iPhone — so the practical effect on what consumers can buy is shaped more by those design changes and the separate redesign proceeding than by the affirmance itself.

Why did Apple lose at the ITC when it has prevailed in other patent disputes? The ITC applies Section 337, which couples ordinary patent infringement analysis with the domestic-industry requirement and offers exclusion rather than damages. Apple’s challenges to claim construction, validity, domestic industry, and prosecution laches each failed on the record, and the Federal Circuit reviews the Commission’s factual findings deferentially for substantial evidence.

What is the significance of crediting investment in “prior iterations”? It expands how the economic prong of the domestic-industry requirement can be satisfied. A complainant need not show that every dollar of qualifying investment went into a product that itself practices the patent; investment in earlier, non-practicing development can count if it directly led to the patent-practicing commercial product.

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