{"id":716,"date":"2024-07-20T03:27:04","date_gmt":"2024-07-20T03:27:04","guid":{"rendered":"https:\/\/ipfray.com\/?p=716"},"modified":"2024-07-20T03:27:04","modified_gmt":"2024-07-20T03:27:04","slug":"to-do-away-with-watch-feature-ban-apple-leverages-supreme-courts-overruling-of-chrevon-doctrine-apple-v-itc-masimo","status":"publish","type":"post","link":"https:\/\/ipfray.com\/staging1\/to-do-away-with-watch-feature-ban-apple-leverages-supreme-courts-overruling-of-chrevon-doctrine-apple-v-itc-masimo\/","title":{"rendered":"To do away with Watch feature ban, Apple leverages Supreme Court&#8217;s overruling of Chrevon doctrine: Apple v. ITC &amp; Masimo"},"content":{"rendered":"\n<div class=\"wp-block-group has-global-padding is-layout-constrained wp-block-group-is-layout-constrained\" style=\"border-width:1px\">\n<p class=\"wp-block-paragraph\"><strong>Context:<\/strong> One of the U.S. government agencies that may see itself affected very strongly  by the Supreme Court&#8217;s recent <em>Loper Bright<\/em> decision (which did away with the decades-old <em>Chevron<\/em> doctrine that used to give government agencies a significant level of deference as they interpret their governing statutes) is the United States Patent &amp; Trademark Office (USPTO) (<a href=\"https:\/\/ipfray.com\/supreme-court-casts-uspto-into-greatest-legal-uncertainty-in-its-at-least-modern-history-loper-bright-v-raimondo\/\">June 30, 2024 <strong>ip fray<\/strong> article<\/a>). But observers have also, rightly, viewed the U.S. International Trade Commission (USITC or just ITC), a trade agency with quasi-judicial powers, as a target of new challenges to its rulemaking.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What&#8217;s new:<\/strong> Within less than a month of the <em>Loper Bright<\/em> ruling, Apple is already fielding that new standard in its Federal Circuit appeal of the ITC&#8217;s Apple Watch import ban over a pulse oxymetry feature. On Friday (July 19, 2024), Apple filed its reply brief to the ITC&#8217;s and patentee Masimo&#8217;s responsive briefs, and <em>Loper Bright<\/em> featuers prominently. Apple&#8217;s appeal has multiple prongs, and the ITC&#8217;s rulemaking comes into play with respect to the agency&#8217;s reference to its own application of Section 337&#8217;s domestic industry requirement, which is the part Apple has briefed most extensively in both its opening brief (<a href=\"https:\/\/ipfray.com\/apples-opening-brief-in-appeal-of-watch-case-places-emphasis-on-itcs-domestic-industry-requirement\/\">April 6, 2024 <strong>ip fray<\/strong> article<\/a>) and now its reply brief on appeal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Direct impact:<\/strong> The Federal Circuit does not need <em>Loper Bright<\/em> to decide this appeal in Apple&#8217;s favor, as its own recent <em>Zircon <\/em>ruling also suggested a rather restrictive approach to the domestic industry requirement, as noted in the <em>wider ramifications<\/em> paragraph of a <a href=\"https:\/\/ipfray.com\/federal-circuit-upholds-itc-holding-on-domestic-industry-in-cases-where-products-dont-each-practice-all-patents-in-suit\/\">May 8, 2024 <strong>ip fray<\/strong> article<\/a>. The effect may be more psychological and political as the references to <em>Loper Bright<\/em> reminds the Federal Circuit how how important it is for the judiciary to rein in an agency&#8217;s overreach when it comes to the scope of its rights and responsibilities. In commercial terms, Masimo&#8217;s import ban has been a failure as Apple Watch sales do not appear to suffer from the temporary disablement of the pulse oximetry feature. As explained in a <a href=\"https:\/\/ipfray.com\/exclusive-if-you-recently-bought-an-apple-watch-in-the-u-s-youll-likely-get-pulse-oximetry-for-free-provided-that-apples-appeal-succeeds\/\">March 12, 2024 <strong>ip fray<\/strong> article<\/a>, there is every indication that Apple can just activate the feature later by means of a software update for any U.S. customers who bought an Apple Watch during the period in which the ITC&#8217;s limited exclusion order was in force, a successful appeal provided.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Wider ramifications:<\/strong> The overreach in the Apple Watch case is particularly troubling as Masimo went to the ITC on the basis of drawings and argued partly on the basis of prototypes. The ITC&#8217;s job is to protect a domestic industry that actually exists, not to serve as a patent injunction court for other purposes. Apple and other companies are lobbying U.S. lawmakers about this issue.<\/p>\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Here&#8217;s Apple&#8217;s reply brief:<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-documentcloud wp-block-embed-documentcloud\"><div class=\"wp-block-embed__wrapper\">\n<span class=\"us86t\"><iframe loading=\"lazy\" title=\"24-07-19 Apple reply brief in Masimo ITC appeal (Hosted by DocumentCloud)\" src=\"https:\/\/embed.documentcloud.org\/documents\/24888977-24-07-19-apple-reply-brief-in-masimo-itc-appeal\/?embed=1&amp;title=1\" width=\"500\" height=\"750\" style=\"border: 1px solid #aaa;\" sandbox=\"allow-scripts allow-same-origin allow-popups allow-forms allow-popups-to-escape-sandbox\"><\/iframe><\/span>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The filing describes the ITC&#8217;s domestic industry finding as &#8220;rel[ying] on<br>cobbling together fragmentary, speculative developmental evidence for items not<br>identified in the Complaint and calling it a domestic industry.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The original idea behind ITC exclusion orders (U.S. import bans) over patent infringement allegations (which are the most common but formally not the only basis for Section 337 complaints) was that if one company makes a product in the U.S. and another imports a foreign-made product into the U.S. that infringes the rights of the domestic U.S. competitor, customs officers should seize any imports. But with access to injunctive relief in U.S. federal court having become fairly difficult since the Supreme Court&#8217;s 2006 <em>eBay<\/em> decision, more and more patent holders try to get from the ITC what they can&#8217;t get in district court: decisive leverage in the form of a product ban. And the ITC appears to be more than willing to expand its statutory powers in order to meet that &#8220;demand&#8221; for certain types of quasi-judicial orders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Masimo had no domestic industry by any reasonable definition when it filed its ITC complaint. Everything was made up: the patents themselves, which Masimo derived from older applications (more than a decade old) but designed to read on the Apple Watch to the domestic industry claim, which was based on future product plans. And even when Masimo finally launched a product, it arguably (which is one of Apple&#8217;s points on appeal) didn&#8217;t even practice the asserted patents in the way the original material purported to show, but in any event, Masimo never sold a meaningful quantity. They obviously couldn&#8217;t compete with the Apples and Samsung of the world because pulse oximetry is a &#8220;killer application&#8221; for medical devices (Masimo&#8217;s own business), not for smartwatches, where it may indeed save lives in some situations but isn&#8217;t a driver of demand.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As <strong>ip fray<\/strong> noted in its above-mentioned <a href=\"https:\/\/ipfray.com\/federal-circuit-upholds-itc-holding-on-domestic-industry-in-cases-where-products-dont-each-practice-all-patents-in-suit\/\">commentary on the Federal Circuit&#8217;s <em>Zircon<\/em> ruling<\/a>, the issues are different and that&#8217;s why in <em>Zircon<\/em> the Federal Circuit actually had to defend the ITC. In that case, the ITC was reasonably restrictive. But somehow the Masimo case has become an emotional thing. The ITC is normally much more receptive to reason. What <em>Zircon <\/em>and <em>Masimo<\/em> have in common is that the complainant&#8217;s ability to satisfy the domestic industry requirement is the (single most important) issue.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Instead of discussing Apple&#8217;s multiple grounds of appeal again, let&#8217;s leave it at the following passage, which is so important because it connects the Apple Watch case to the Supreme Court&#8217;s late-June <em>Loper Bright<\/em> decision:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">The Commission\u2019s brief goes further still, appearing to take the remarkable<br>position (at 25-27) that the only rules limiting its behavior are its own (inapposite) procedural regulations\u2014and not the plain language of its governing statute as interpreted by an Article III court. The Supreme Court\u2019s recent decision in <em>Loper Bright Enterprises v. Raimondo<\/em>, 144 S.Ct. 2244 (2024), makes clear that the Commission\u2019s position is wrong. Judicial review of an agency\u2019s statutory interpretation is perhaps <em>most<\/em> important\u2014and \u201cabdication in favor of the agency is <em>least <\/em>appropriate\u201d\u2014when considering \u201cthe scope of an agency\u2019s own power.\u201d <em>Id.<\/em> at 2266 (emphasis in original).<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Apple&#8217;s reply brief in its appeal of the USITC&#8217;s Apple Watch ban further to Masimo&#8217;s complaint leverages the Supreme Court&#8217;s recent Loper Bright ruling that did away with the Chevron doctrine.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[76,28,18,12,17],"tags":[],"class_list":["post-716","post","type-post","status-publish","format-standard","hentry","category-apple","category-l-icensors-licensees","category-masimo-v-apple","category-patent-litigation","category-usitc-itc-international-trade-commission"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/comments?post=716"}],"version-history":[{"count":1,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/716\/revisions"}],"predecessor-version":[{"id":717,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/posts\/716\/revisions\/717"}],"wp:attachment":[{"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/media?parent=716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/categories?post=716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipfray.com\/staging1\/wp-json\/wp\/v2\/tags?post=716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}