Masimo (MASI) Gets Favorable Ruling in Apple Watch Patent Suit
Masimo MASI announced that a U.S. Administrative Law Judge in Washington, D.C. ruled in favor of the company in a complaint filed with the U.S. International Trade Commission (ITC) against the iPhone-maker, Apple Inc. AAPL. The complaint was filed in 2021, alleging that Apple Inc. had infringed a number of Masimo’s patents including one of its pulse oximeter patents.
The recent ruling states that Apple Inc. has infringed the patent related to pulse oximeter by importing and selling certain Apple Watches with light-based pulse oximetry functionality and components within the United States.
The Apple Watch Series 6, launched in 2020, was the first smartwatch model to incorporate pulse oximeter sensor and AAPL continues to use the sensor in the current Apple Watches. Following the recent court ruling, the U.S. ITC may consider an import ban on these Apple Watches.
Shares of Masimo gained 5.6% during after-hours trading on Jan 10, following the favorable court ruling. The company’s shares have gained 16.4% in the past six months compared with the industry’s increase of 2.8%. The S&P 500 Index however declined 0.3% in the same time period.
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Masimo believes that the ruling from the U.S. ITC is likely to restore fairness in the market. The company alleges that the world’s largest publicly traded company, Apple, has a history of infringing other companies’ technologies and repackaging them.
Masimo is the leading manufacturer of pulse oximeters for medical use that revolutionized the industry with its Masimo SET pulse oximetry technology. The company is using this technology in its newly-launched, first wearable device — Masimo W1 — that will provide consumers with accurate, continuous health-related data, including oxygen level, hydration index, and pulse, heart, and respiration rates.
Masimo’s technology is proven to have helped reduce blindness in babies in the neonatal intensive care unit, save lives of post-surgical patients on opioids and COVID patients monitored remotely during clinical studies.
Meanwhile, we note that Apple has also filed counter-allegations in 2022 stating that the MASIMO W1 watche infringes a number of its patents and thus seeks damages, injunctive relief and declaratory relief. Masimo continues to pursue all of its legal remedies in its litigation against Apple and believes that the company has good and substantial defenses to Apple’s claims.
Industry Prospects
Per a report by technavio, the wearables market share in the United States is expected to increase by USD 6.85 billion from 2021 to 2026 at a compound annual growth rate of 8.9%. Factors like preference for wearables electronic devices for payment and integration of artificial intelligence in wearable medical devices are expected to drive the demand for these devices.
Given the market potential, the court ruling may favor Masimo going forward if a ban is imposed on Apple Watches as it will likely impede the growth of one of the leading makers of wearable-devices in the U.S. market.
Notable Developments
Earlier this month, study data published in the Egyptian Journal of Anesthesia showed that continuous SpHb through Masimo Pulse CO-Oximetry indicated clinically acceptable accuracy of Hb measurement compared to invasive Hb, even, in patients with low Hb levels and those undergoing CS with antepartum hemorrhage. This is likely to solidify Masimo’s position in the global real-time patient monitoring space.
Last month, Masimo announced the full-market release of the Hydration Index for the Masimo W1 watch. In the same press release, the company announced that a medical version of Masimo W1 would be available outside the United States for use in telehealth and telemonitoring applications via Masimo SafetyNet and Personal SafetyNet for healthcare providers and payers along with individual use.
Masimo also announced the launch of the expansion of the HEOS platform in December to provide a robust and always-on connection to the Masimo Health secure cloud. This feature will add the ability to aggregate, record and display health data from wearable Masimo continuous and spot-check health and wellness devices.
Masimo Corporation Price
Masimo Corporation price | Masimo Corporation Quote
Zacks Rank & Stocks to Consider
Currently, Masimo carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN and Boston Scientific Corporation BSX.
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 10.6% compared with the industry’s 30.3% decline in the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.3%. BSX’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 1.9%.
Boston Scientific has gained 6.9% against the industry’s 42.6% decline over the past year.
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