UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`
`In the Matter of Certain Light-Based
`Physiological Measurement Devices and
`Components Thereof
`
`Investigation No. 337-TA-_____
`
`COMPLAINT UNDER SECTION 337 OF
`THE TARIFF ACT OF 1930, AS AMENDED
`
`Respondent:
`
`Apple Inc.
`One Apple Park Way
`Cupertino, CA 95014
`Telephone: 408-996-1010
`
`Complainants:
`
`Masimo Corporation
`52 Discovery
`Irvine, CA 92618
`Telephone: 949-297-7000
`Cercacor Laboratories, Inc.
`15750 Alton Pkwy
`Irvine, CA 92618
`Telephone: 800-610-8522
`
`Counsel for Complainants:
`Stephen C. Jensen
`Joseph R. Re
`Sheila N. Swaroop
`KNOBBE, MARTENS, OLSON & BEAR, LLP
`2040 Main Street, 14th Floor
`Irvine, CA 92614
`Telephone: (949) 760-0404
`Jonathan E. Bachand
`KNOBBE MARTENS OLSON & BEAR, LLP
`1717 Pennsylvania Ave NW, Suite 900
`Washington DC, 20006
`Telephone: (202) 640-6400
`
`1
`
`APPLE 1031
`
`

`

`
`
`TABLE OF CONTENTS
`
`
`
`Page No.
`
`I. INTRODUCTION ....................................................................................................................... 1
`
`II. COMPLAINANTS..................................................................................................................... 3
`
`III. PROPOSED RESPONDENT ................................................................................................... 7
`
`IV. PRODUCTS AND TECHNOLOGY AT ISSUE ..................................................................... 8
`
`A.
`
`B.
`
`C.
`
`Complainants’ Technology ..................................................................................... 8
`
`Apple’s Copying of Complainants’ Technology .................................................. 11
`
`The Accused Products ........................................................................................... 13
`
`V. THE ASSERTED PATENTS .................................................................................................. 14
`
`A.
`
`U.S. Patent No. 10,912,501................................................................................... 14
`
`1.
`
`2.
`
`3.
`
`Identification of the Patent and Ownership by Masimo Corporation ....... 14
`
`Foreign Counterparts to the ’501 Patent ................................................... 17
`
`Non-Technical Description of the ’501 Patent ......................................... 17
`
`B.
`
`U.S. Patent No. 10,912,502................................................................................... 18
`
`1.
`
`2.
`
`3.
`
`Identification of the Patent and Ownership by Masimo Corporation ....... 18
`
`Foreign Counterparts to the ’502 Patent ................................................... 20
`
`Non-Technical Description of the ’502 Patent ......................................... 20
`
`C.
`
`U.S. Patent No. 10,945,648................................................................................... 21
`
`1.
`
`2.
`
`3.
`
`Identification of the Patent and Ownership by Masimo Corporation ....... 21
`
`Foreign Counterparts to the ’648 Patent ................................................... 24
`
`Non-Technical Description of the ’648 Patent ......................................... 24
`
`D.
`
`U.S. Patent No. 10,687,745................................................................................... 25
`
`1.
`
`Identification of the Patent and Ownership by Masimo Corporation ....... 25
`
`i
`
`2
`
`

`

`2.
`
`3.
`
`Foreign Counterparts to the ’745 Patent ................................................... 26
`
`Non-Technical Description of the ’745 Patent ......................................... 26
`
`E.
`
`U.S. Patent No. 7,761,127..................................................................................... 27
`
`1.
`
`2.
`
`3.
`
`Identification of the Patent and Ownership by Cercacor .......................... 27
`
`Foreign Counterparts to the ’127 Patent ................................................... 28
`
`Non-Technical Description of the ’127 Patent ......................................... 28
`
`F.
`
`Licensees ............................................................................................................... 29
`
`VI. UNLAWFUL AND UNFAIR ACTS OF PROPOSED RESPONDENT ............................... 29
`
`VII. THE DOMESTIC INDUSTRY Related to Asserted Patents ................................................ 37
`
`A.
`
`B.
`
`Technical Prong .................................................................................................... 38
`
`Economic Prong .................................................................................................... 39
`
`VIII. SPECIFIC INSTANCES OF UNFAIR IMPORTATION AND SALE .............................. 40
`
`IX. CLASSIFICATION OF THE INFRINGING PRODUCTS UNDER THE HARMONIZED
`TARIFF SCHEDULE OF THE UNITED STATES ........................................................ 41
`
`X. RELATED LITIGATION ........................................................................................................ 41
`
`XI. REQUESTED RELIEF .......................................................................................................... 42
`
`ii
`
`3
`
`

`

`LIST OF EXHIBITS
`
`Exhibit No.
`I
`2
`3
`4
`5
`6
`7
`8
`9
`10
`
`II
`
`12
`
`13
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`2 1
`
`22
`
`23
`
`24
`
`Descriotion
`Certified Copy of U.S. Patent No . 10,912,501
`Certified Copy ofU.S. Patent No . 10,912,5 02
`Certified Copy ofU.S. Patent No . 10,945,648
`Certified Copy ofU.S. Patent No . 10,687745
`Certified Copy ofU.S. Patent No . 7,76 l,l 27
`Certified Assi.lffiluent Documents for u.s. Patent No . 10,912,501
`Certified Assi.lffiluent Documents for u.s. Patent No . 10,912,502
`Certified AssiJrulnent Documents for u.s. Patent No . 10,945648
`Certified Assignment Documents for u.s. Patent No . 10,687,745
`Certified Assignment Documents for u.s. Patent No . 7,76 l,l 27
`CONFIDENTIAL EXlllBIT: Amended and Restated Cross-Licensing
`Agreement between Masimo Laboratories and Masimo Corporation
`Effective Janmuy I, 2007
`Listing of All Foreign Patents and All Foreign Patent Applications
`Corresponding to Asserted Patents
`Representative Photos of Representative Apple Watch Series 6 (Model
`No . 109.627 shown)
`Product Literature Regarding the ADDle Watch Series 6
`
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing Claims of the
`' 501 Patent to an A DDle Watch Series 6
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing C laims of the
`' 502 Patent to an A DDle Watch Series 6
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing C laims of the
`' 648 Patent to an A DDle Watch Series 6
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing C laims of the
`' 745 Patent to an A DDle Watch Series 6
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing C laims of the
`' 127 Patent to an A DDle Watch Series 6
`CONFIDENTIAL EXlllBIT Drawings, Photographs, or Other Visual
`ReDresentations of Masimo's rainbow® Sensors
`
`CONFIDENTIAL EXlllBIT: Drawings, Photographs, or Other Visual
`ReDresentations of Masimo's Confidential Domestic Industrv Product
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing Exemplary
`Claims of the ' 50 1 Patent to Masimo 's Domestic Industry Product
`
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing Exemplary
`Claims of the ' 502 Patent to Masimo 's Domestic Industry Product
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing Exemplary
`Claims of the '648 Patent to Masimo 's Domestic Industry Product
`
`III
`
`4
`
`

`

`t No.
`
`25
`
`26
`
`27
`
`, Chart (
`CONFIDENTIAL EXHIBIT: (
`Claim s of the '745 Patent to Masimo 's
`CONFIDENTIAL EXlllBIT: Claim Chart Comparing Exemplary
`Claim s of the '127 Patent to Masimo 's Domestic
`Products
`
`" J
`
`CONFIDENTIAL EXHIBIT: Confidential Declaration ofBilal Muhsin
`
`28
`29
`30
`3 1
`32
`
`CONFIDENTIAL EXHIBIT: Confidential Declaration of Micah
`' 15, 2020 Press Release
`IAL EX
`; of
`' P o
`,with SEC
`' 28. 202 1 Annt e 10K
`Fowler, Geoffrey, "The new Apple Watch says my tWIgS lllay be sick
`" .!!!c
`' Post.
`. It can 't
`r 23. 2020.
`33
`34 ~O-K.dated F'
`,202 1
`t atch's blood oxygen sensor IS less accurate than you
`.
`
`, dated Anri11 9. 202 1
`A
`,,1 ,
`
`; 6
`
`35
`36
`37
`
`38
`39
`40
`
`"Can the
`Watch Series 6 Keep the n (
`Watch Series 6 review Minute T.
`"The New ~pp
`6 May Have a
`OK"
`
`H.a, ,
`
`Watch Series 6 and SE Review Watch Out for the T h
`. rNo
`',428
`
`11 "
`
`IV
`
`5
`
`

`

`LIST OF APPENDICES
`
`Aooendix
`A
`
`B
`C
`D
`E
`
`F
`G
`
`H
`
`Description
`File HistOlY for u.s. Patent No. 10,912,501
`Relevant Tedmical References Cited in File HistOlY for u.s. Patent Nos.
`10,912,501 , 10,912,502, and 10,945,648
`File HistOly for u.s. Patent No. 10,912,502
`File HistOly for U.S. Patent No. 10,945,648
`Certified File History for U.S. Patent No. 10,687,745
`Relevant Technical References Cited in File HistOlY for u.s. Patent No.
`10,687,745
`Certified File History for U.S. Patent No. 7, 76 1,127
`Relevant Technical References Cited in File HistOlY for u.s. Patent No.
`7,761,127
`
`v
`
`6
`
`

`

`
`
`I. INTRODUCTION
`
`
`
`1.
`
`Masimo Corporation and Cercacor Laboratories, Inc. (collectively, “Masimo” or
`
`“Complainants”) request that the United States International Trade Commission (“Commission”)
`
`institute an investigation into violations of Section 337 of the Tariff Act of 1930, as amended,
`
`19 U.S.C. § 1337 (“Section 337”) committed by Respondent Apple Inc. (“Apple”) (“Apple” or
`
`“Respondent”).
`
`2.
`
`This Complaint is based on Respondent’s unlawful and unauthorized importation
`
`into the United States, sale for importation, and/or sale within the United States after importation
`
`of certain
`
`light-based physiological measurement devices and components
`
`thereof.
`
`Respondent’s products, including, but not limited to, the “Apple Watch Series 6,” or “Series 6”
`
`(“Accused Products”) infringe at least one claim of U.S. Patent No. 10,912,501, titled “User-
`
`Worn Device for Noninvasively Measuring a Physiological Parameter of a User,” (“the ’501
`
`Patent”), U.S. Patent No. 10,912,502, titled “User-Worn Device for Noninvasively Measuring a
`
`Physiological Parameter of a User,” (“the ’502 Patent”), U.S. Patent No. 10,945,648, titled
`
`“User-Worn Device for Noninvasively Measuring a Physiological Parameter of a User,” (“the
`
`’648 Patent”), U.S. Patent No. 10,687,745, titled “Physiological Measurement Devices, Systems,
`
`and Methods,” (“the ’745 Patent”), and U.S. Patent No. 7,761,127, titled “Multiple Wavelength
`
`Sensor Substrate,” (“the ’127 Patent”) (collectively, “the Asserted Patents”), either literally or
`
`under the doctrine of equivalents.
`
`1
`
`7
`
`

`

`3.
`
`The Accused Products directly infringe and/or induce the infringement of,
`
`literally or under the doctrine of equivalents, at least the following claims (collectively, “the
`
`Asserted Claims”) of the Asserted Patents:
`
`U.S. Patent
`’501 Patent
`’502 Patent
`
`’648 Patent
`’745 Patent
`
`’127 Patent
`
`Asserted Claims1
`1-9, 11-18, 19-25 and 26-30
`1-2, 4-6, 8-12, 14-18, 19-22,
`24-26, and 28-30
`1-5, 6-17, 19, and 20-30
`1-6, 8-9, 11, 14, 20-24, and 26-
`27
`7-9
`
`Further discovery may reveal that Respondent infringes additional claims.
`
`4.
`
`Certified copies of the ’501 Patent, ’502 Patent, ’648 Patent, ’745 Patent, and
`
`’127 Patent are attached hereto as Exhibits 1, 2, 3, 4, and 5, respectively. Masimo Corp. owns
`
`by assignment the entire right, title, and interest in and to the ’501 Patent, ’502 Patent, ’648
`
`Patent, and ’745 Patent (collectively, “the Masimo Patents”). Certified copies of the recorded
`
`assignments of the Masimo Patents are attached hereto as Exhibits 6, 7, 8, and 9, respectively.
`
`Masimo Corp. exclusively licenses certain rights to the Masimo Patents to Cercacor. A copy of
`
`the Amended and Re-Stated Cross-Licensing Agreement between Masimo Corp. and Cercacor
`
`(formerly known as Masimo Laboratories) granting the license to Cercacor is attached hereto as
`
`Confidential Exhibit 11. Cercacor owns by assignment the entire right, title, and interest in and
`
`to the ’127 Patent (“the Cercacor Patent”). Certified copies of the recorded assignment of the
`
`Cercacor Patent are attached hereto as Exhibit 9. Masimo is a licensee of certain exclusive
`
`rights to the Cercacor Patents, as reflected in Confidential Exhibit 11.
`
`5.
`
`1
`
`Respondent’s activities with respect to the importation into the United States, the
`
`Independent claims are noted in BOLD.
`
`2
`
`8
`
`

`

`
`
`
`
`sale for importation into the United Sates, and/or the sale within the United States after
`
`importation of certain light-based physiological measurement devices and components thereof,
`
`described more fully infra, are unlawful under 19 U.S.C. § 1337(a)(1)(B)(i) in that they
`
`constitute infringement of the valid and enforceable Asserted Patents.
`
`6.
`
`As required by Section 337(a)(2) and defined by Section 337(a)(3), industries
`
`exist in the United States relating to articles covered by the Asserted Patents or alternatively such
`
`industries relating to articles protected by the Asserted Patents are in the process of being
`
`established.
`
`7.
`
`Complainants seek relief from the Commission in the form of a permanent limited
`
`exclusion order, pursuant to Section 337(d), excluding from entry into the United States the
`
`Accused Products that infringe one or more claims of the Asserted Patents. Complainants also
`
`seek a permanent cease and desist order, pursuant to Section 337(f), directing Respondent to
`
`immediately cease and desist from
`
`importing, marketing, advertising, demonstrating,
`
`warehousing inventory for distribution, distributing, offering for sale, selling, or using in the
`
`United States the certain light-based physiological measurement devices and components thereof
`
`that infringe one or more claims of the Asserted Patents.
`
`8.
`
`Complainants further seek as relief a bond, for the 60-day Presidential review
`
`period pursuant to Section 337(j), for the importation of the certain light-based physiological
`
`measurement devices and components thereof that infringe one or more claims of the Asserted
`
`Patents.
`
`II. COMPLAINANTS
`
`9.
`
`Complainant Masimo Corporation is a Delaware corporation having its principal
`
`place of business at 52 Discovery, Irvine, California 92618. Masimo owns the Masimo Patents
`
`and has certain exclusive rights to the Cercacor Patent. (See Exhibits 1-4, 6-9, Confidential
`
`3
`
`9
`
`

`

`
`Exhibit 11). Complainant Cercacor is a Delaware corporation having its principal place of
`
`
`
`business at 15750 Alton Pkwy, Irvine, CA 92618. Cercacor is the owner of the Cercacor Patent
`
`and has certain exclusive rights to the Masimo Patents. (See Exhibits 5 and 10, Confidential
`
`Exhibit 11).
`
`10. Masimo is a global medical technology company that has revolutionized non-
`
`invasive monitoring of physiological parameters, such as pulse rate, arterial oxygen saturation
`
`and many others. These innovations have been repeatedly recognized by Federal courts. See
`
`Mallinckrodt, Inc. v. Masimo Corp., Case No. 2:00-CV-06506 (C.D. Cal. Apr. 5, 2004), ECF
`
`No. 588; Mallinckrodt, Inc. v. Masimo Corp., Case No. 2:00-CV-06506 (C.D. Cal. July 12,
`
`2004), ECF No. 622; Mallinckrodt, Inc. v. Masimo Corp., Case No. 2:00-CV-06506 (C.D. Cal.
`
`Aug. 4, 2004), ECF No. 632, aff’d in part and rev’d in part, 147 F. App'x 158 (Fed. Cir. 2005);
`
`Mallinckrodt, Inc. v. Masimo Corp., 147 F. App'x 158 (Fed. Cir. 2005); Masimo Corp. v. Philips
`
`Elec. N. Am. Corp., Case No. 1:09-CV-00080 (D. Del. Oct. 17, 2014), ECF No. 919; Masimo
`
`Corp. v. Philips Elec. N. Am. Corp., Case No. 1:09-CV-00080 (D. Del. May 18, 2015), ECF No.
`
`997; Masimo Corp. v. Philips Elec. N. Am. Corp., Case No. 1:09-CV-00080 (D. Del. May 18,
`
`2015), ECF No. 998.
`
`11. Masimo develops, manufactures, and markets a variety of noninvasive patient
`
`monitoring technologies and hospital automation solutions as part of its mission to improve
`
`patient outcomes and reduce the cost of patient care. Masimo’s patient monitoring solutions are
`
`systems that generally incorporate a monitor or circuit board, proprietary single-patient use or
`
`reusable sensors, software and/or cables. Masimo primarily sells its products to professional
`
`caregivers, such as hospitals, emergency medical service providers, home care providers,
`
`4
`
`10
`
`

`

`physician offices, veterinarians, long tenn care facilities and also to COnSlllllerS, through its direct
`
`sales force, online, distributors, and original equipment manufachrrer (OEM) partners.
`
`12. Masimo has rapidly expanded its workforce despite the COVID- 19 Pandemic. As
`
`of December 28, 20 19, Masimo had approximately 1,600 full-time employees and approximately
`
`3,700 dedicated contract personnel worldwide. Exhibit 34 (Masimo Fonn 10k) at 34. By
`
`January 2, 2021, Masimo had grown to 2,000 full-time employees and approximately 4,200
`
`dedicated contract personnel worldwide.
`
`13. Masimo's core business is referred to as Masimo SE~ pulse oximetry. Pulse
`
`oximetry allows for the noninvasive measurement of the oxygen saturation level of arterial
`
`blood, which delivers oxygen to the body 's tissues. Pulse oximehy also allows for the
`
`measmement of pulse rate.
`
`"SET" refers to Masimo's Signal Extraction Technology, a
`
`technology invented by Masimo that, for the first time, allowed pulse oximeters to provide
`
`accurate measurements of oxygen satmation even during patient motion and low perfusion (i.e.,
`
`decreased a11erial blood flow) conditions.
`
`14.
`
`Over the years, Masimo's product offerings have expanded significantly to also
`
`include rainbow® Pulse CO-Oximetry, with its unique ability to allow for real-time non-invasive
`
`monitoring of additional physiologicalmeasmements, including carboxyhemoglobin (SpCO~,
`
`methemoglobin (SpMet~,
`
`total hemoglobin concentration (SpHb~ and fractional arterial
`
`oxygen saturation (SpfD2TM). Rainbow® Pulse CO-oximehy also has the ability to measme
`
`pulse rate, perfusion index (Pi), Pleth Variability Index (PVi~ and respiration rate from the pleth
`
`(RRp~ . The rainbow SE~ platfonn also allows for the calculation of Oxygen Content
`
`(SpOCTM) and Oxygen Reserve Index (ORiTM).
`
`5
`
`11
`
`

`

`15. Masimo’s current technology offerings also include remote patient monitoring,
`
`connectivity, and hospital automation solutions, including Masimo Patient SafetyNet™, Masimo
`
`Patient SafetyNet™ Surveillance, Replica™, Iris®, MyView®, UniView™ and Trace™.
`
`Masimo’s technologies are supported by a substantial intellectual property portfolio.
`
`16. Masimo invests significantly in its research and development efforts, and
`
`currently spends about 10% of its sales revenue on research and development activities. For the
`
`year ending January 2, 2021, Masimo spent approximately $118,689,000 for research and
`
`development activities. Exhibit 34 (Masimo Form 10k) at 66. The majority of these activities
`
`take place in the United States. Exhibit 34 (Masimo Form 10k) at 62. As a result of these
`
`efforts, Masimo has been awarded numerous patents in the United States and around the world.
`
`As of January 2, 2021, Masimo had approximately 800 issued patents and approximately 500
`
`pending applications in the U.S., Europe, Japan, Australia, Canada and other countries
`
`throughout the world. Exhibit 34 (Masimo Form 10k) at 32.
`
`17. Masimo owns two facilities in Irvine, California, with combined square footage of
`
`approximately 314,400, housing its corporate headquarters and the majority of its U.S. research
`
`and development activities. Masimo also owns approximately 86,500 square feet of property in
`
`Hudson, New Hampshire, which is used to develop and manufacture advanced light emitting
`
`diodes and other advanced component-level technologies, as well as warehousing and
`
`administrative operations.
`
`18. Masimo also leases and occupies approximately 105,800 square feet of additional
`
`building space in Irvine, California for product manufacturing and warehousing. Masimo also
`
`leases or owns an additional 61,000 square feet at various locations throughout the United States,
`
`that provide centers for distribution of Masimo’s products directly to its customers, and is in the
`
`6
`
`12
`
`

`

`
`
`process of establishing distribution centers throughout the United States,
`
`
`
`
`
`
`
`19.
`
`Complainant Cercacor is a health and wellness innovator based in Irvine,
`
`California. In 1998, Masimo spun certain technology off into a new company, Masimo
`
`Laboratories, Inc. or “Masimo Labs,” to further research and develop the technologies. The
`
`name of the company was later changed to “Cercacor.” Cercacor and Masimo have a license
`
`agreement between them to facilitate collaboration between the companies.
`
`20.
`
`Like Masimo, Cercacor is an innovator of non-invasive monitoring technologies.
`
`Cercacor is on the frontline of understanding how measuring, tracking, and analyzing
`
`physiological parameters can impact pre-diabetic and diabetic patients, endurance sports training
`
`and performance, and overall health and wellness. Cercacor continued the development that
`
`started at Masimo on numerous non-invasive parameters. Leading hospitals around the world
`
`use Cercacor technology licensed to Masimo and sold under the name Masimo rainbow SET®.
`
`This technology was the first, and remains the only, noninvasive monitoring technology that can
`
`measure carbon monoxide, methemoglobin, and total hemoglobin in the blood.
`
`III. PROPOSED RESPONDENT
`
`21.
`
`Respondent Apple Inc. (“Apple”) is a California corporation having a principal
`
`place of business at One Apple Park Way, Cupertino, California 95014. Apple unlawfully sells
`
`for importation, imports, and/or sells after importation into the United States certain light-based
`
`physiological measurement devices and components thereof, including the Apple Watch Series
`
`6, that infringe the ’501 Patent, the ’502 Patent, the ’648 Patent, the ’745 Patent, and the ’127
`
`Patent, either literally or under the doctrine of equivalents.
`
`22.
`
`Apple is in the business of designing, manufacturing, and marketing smartphones,
`
`personal computers, tablets, wearables, and accessories, and sells a variety of related services.
`
`7
`
`13
`
`

`

`
`
`
`
`Apple’s wearables
`
`include certain
`
`light-based physiological measurement devices and
`
`components thereof, including the Apple Watch Series 6.
`
`IV. PRODUCTS AND TECHNOLOGY AT ISSUE
`
`Complainants’ Technology
`
`Products that practice one or more claims of the Asserted Patents—including the
`
`A.
`
`23.
`
`Accused Products and Masimo’s Domestic Industry products—are light-based physiological
`
`measurement devices and components thereof. These physiological measurement devices
`
`typically rely on light that is transmitted through the body tissue. The received light, that has
`
`been attenuated by the various components of the body tissue, including the pulsing arterial
`
`blood, is known in the industry as a photoplethysmography or “PPG.” The transmission and
`
`receipt of this light is typically accomplished through a sensor that is applied to a body part such
`
`as a finger, arm, toes, forehead or ear.
`
`24.
`
`Before Masimo, non-invasive measurements from the PPG were plagued by
`
`unreliability, often when the measurement was needed most, due to the person moving or having
`
`low peripheral blood flow (known as “low perfusion”). The industry had essentially given up on
`
`solving these problems, concluding they were largely unsolvable. In the medical context,
`
`clinicians had to live with the results—patient monitors gave excessive false alarms, froze their
`
`measurements for prolonged periods of time despite potential changes in the physiological
`
`parameter (e.g., oxygen saturation or pulse rate), delayed notification of alarms due to long
`
`averaging times of sensor data, produced inaccurate measurements, or were unable to obtain data
`
`on the most critical patients and babies who cannot be instructed to stay still. Masimo’s
`
`pioneering Masimo SET® technology, solves this problem and dramatically improved the
`
`reliability of monitoring and reporting physiological signals derived from the PPG.
`
`8
`
`14
`
`

`

`
`
`
`
`25.
`
`Following its initial success with Masimo SET® technology, Masimo invested
`
`heavily in developing additional breakthrough measurement technologies, such as non-invasively
`
`measuring total hemoglobin, carboxyhemoglobin, and methemoglobin. Masimo has continued
`
`to innovate, succeeding where others have consistently failed. Masimo was the first, and
`
`remains the only, company delivering these game-changing technologies to hospitals in the
`
`United States. Use of Masimo’s technology in the clinical setting has been proven to reduce
`
`blindness in premature infants, detect congenital heart disease in infants, save lives on the
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`general care floor and post-surgery, and improve transfusion management, while also saving
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`substantial money for the hospitals providing care.
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`26. Masimo’s investment in its technology and research and development has
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`included significant investments in wrist-worn devices for measurements of physiological
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`parameters. Masimo’s patent filings as early as 2002 disclose wrist-worn devices for measuring
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`physiological parameters that wirelessly connected to monitors. See Exhibit 40 (Provisional
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`Application No. 60/367,428 filed on March 25, 2002).
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`27.
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`One of Masimo’s commercially marketed wrist-worn device for measuring
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`physiological parameters, the Radius PPG, was cleared by the FDA in May of 2019. The Radius
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`PPG eliminated the need for a cabled connection to a pulse oximetry monitor, allowing patients
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`to move freely and comfortably while still being continuously monitored reliably and accurately.
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`The device communicated with monitors via a wireless connection allowing patients to benefit
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`from mobility.
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`28.
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`9
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`15
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`29.
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`Given its success selling medical-grade devices for non-invasively measuring
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`physiological parameters, Complainants decided to leverage these clinical grade products for sale
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`directly to consumers where allowable. Masimo noticed that there has been many devices sold
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`to consumers purporting to provide physiological measurements, but could identify none that
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`provided clinical grade measurement. The devices available to consumers were more like toys.
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`In 2013, Masimo first began selling its pulse oximetry products to the consumer market. After
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`Masimo began selling directly to consumers, it also increased its investment in direct-to-
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`consumer advertising, including being a premium sponsor of the BNP Paribas Open Tennis
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`Tournament in Palm Springs, CA.
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`30.
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`Notably, despite the acute awareness of pulse oximetry created by the COVID-19
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`pandemic, the large multitude of so-called pulse oximeters offered to consumers are prohibited
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`for medical purposes. Unfortunately, the consumers do not recognize this, which puts their
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`health at risk.
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`31.
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`The Asserted Patents claim devices and/or components of devices used in the
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`non-invasive measurement of physiological parameters such as oxygen saturation. For example,
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`the four Masimo Patents claim devices containing multiple optical sources that emit light at
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`different wavelengths and numerous light detectors. The light detectors are configured to detect
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`the optical radiation from the tissue and output a respective signal stream responsive to this
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`detection. The devices are configured in specific ways which improve the successful detection
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`of the signal while minimizing the effects of light-piping. The Cercacor Patent also claims novel
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`technologies assisting in the non-invasive measurement of physiological parameters. The ’127
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`16
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`Patent claims a sensor using a thermal mass within a substrate to measure and account for effects
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`on measurements from temperature changes.
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`B.
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`32.
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`Apple’s Copying of Complainants’ Technology
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`In 2013, Apple contacted Masimo and asked to meet regarding a potential
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`collaboration. Apple told Masimo that Apple would like to understand more about Masimo’s
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`technology to potentially integrate that technology into Apple’s products. Apple and Masimo
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`later entered into a confidentiality agreement, and Masimo’s management met with Apple. The
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`meetings included confidential discussions of Masimo’s technology. After what seemed to
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`Masimo to have been productive meetings, Apple quickly began hiring Masimo’s employees,
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`including engineers and key management.
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`33. Masimo employed Michael O’Reilly as its Chief Medical Officer and Executive
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`Vice President for Medical Affairs beginning in January 2008. As part of the Masimo executive
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`team, O’Reilly was privy to extremely sensitive information, including information about mobile
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`medical products and applications, wellness applications, clinical data gathering and analytics,
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`and other technology of Masimo. Upon information and belief, Apple employed O’Reilly in
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`July 2013, shortly after the meetings with Masimo, to assist in wellness and mobile applications
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`that include non-invasive measurement of physiological parameters. Not long after, by
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`December of 2013, O’Reilly was already meeting with the FDA on behalf of Apple to discuss
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`medical applications and discuss medical products that non-invasively measures blood
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`constituents.
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`34.
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`Apple systematically recruited other key Masimo personnel, such as Marcelo
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`Lamego (a named inventor on many of the Asserted Patents), who was the former Chief
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`Technical Officer of Cercacor and a former Research Scientist at Masimo. Lamego was a
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`11
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`17
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`Masimo employee during 2000-2001 and 2003-2006, and the Cercacor Chief Technical Officer
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`during 2006-2014.
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`35.
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`Lamego had unfettered access to Complainants’ technical information. He was
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`trained and mentored at Masimo by the most skilled engineers and scientists, and was taught
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`about the keys to effective non-invasive monitoring, something he was not involved in prior to
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`Masimo. Masimo engineers and scientists including, among others, Ammar Al-Ali, Mohamed
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`Diab, and Walter Weber, exposed Lamego to all of Masimo’s technology on non-invasive
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`monitoring. The Masimo engineers, including Al-Ali, Diab, and Weber, were Masimo
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`employees at all relevant times. Lamego also had access to and learned guarded secrets
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`regarding Complainants’ mobile medical products, including key technology and advance plans
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`for future products.
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`36. When Lamego left Cercacor, he assured Complainants that he would not violate
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`his agreements with Complainants and volunteered that he would not work on technology similar
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`to Complainants’ technology. On January 24, 2014, Complainants sent a letter to Apple
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`explaining that Lamego possessed Complainants’ confidential proprietary information and
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`warning Apple to respect Complainants’ rights in such information. The letter stated, “we trust
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`that Apple will employ Mr. Lamego in an area that does not involved healthcare technology,
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`including mobile health applications and the measurement of physiological information.” The
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`letter also asked that “Apple refrain from inducing Mr. Lamego to take actions that would violate
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`the Agreement while he performs services for Apple” and asked Apple to “direct Mr. Lamego to
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`honor his obligations to all of his prior employers.” Based on Complainants’ conversations with
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`Lamego, Complainants’ letter to Apple, and Complainants’ confidentiality agreement with
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`Apple, Complainants’ reasonably believed that Lamego would not use or disclose Complainants’
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`12
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`18
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`confidential information and that Apple would not induce Lamego to do so or itself use
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`Complainants’ confidential information.
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`37.
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`Unbeknownst to Complainants at the time, it now appears that, shortly after
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`joining Apple in January 2014, Lamego began pursuing on behalf of Apple numerous patent
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`applications directed toward technologies he worked on at Complainants, and with which he had
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`no prior experience or knowledge.
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`38.
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`Apple announced the first version of its watch in September 2014 and began
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`shipping its watch in April 2015. On information and belief, Apple began incorporating
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`Masimo’s technology in later versions of its watch. Ultimately with the launch of the Apple
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`Watch Series 6 in September 2020, Apple for the first time purported to have incorporated the
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`ability to measure blood oxygen saturation (pulse oximetry) into its watches—technology, which
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`as described in more detail below, infringes the Asserted Claims. Unfortunately for U.S.
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`consumers, the Apple Watch Series 6 differs from Masimo’s medical grade technology in that
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`Apple’s Accused Products do not reliably measure blood oxygen concentrations, as described in
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`Exhibits 33 and 35-39.
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`C.
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`39.
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`The