Situational Morality And Pulse Oximetry: Apple Watch Infringement And Human Nature.

As a nerdy kid, I used to read popular science magazines in the checkout line, waiting for my mom to finish buying groceries. It was the early 1980’s. I remember picking up the latest Psychology Today issue and flipping through it. I read a short blurb about a “morality” experiment. The details are fuzzy. But I recall researchers testing alternative “morality” hypotheses. Do people act according to their moral code? Or do people form their morals to match their conduct? Sadly, this issue reported, it was the latter. As a general rule of human nature, people do what they want. Then they twist in knots to justify themselves by invoking higher principles when confronted with proof their actions are hurtful or wrong. I hope the science was wrong. But life experiences teach otherwise.

The Tirade Against Property Rights

Shift forward in time, now it is 2006. I am a young partner at a busy contingency fee patent litigation firm. Our lawyers have nothing to do with the headline case of the day—the BlackBerry case known as NTP v. RIM—but I keep up with it, at least at the headline level. By January of that year, the Supreme Court denied review of the infringement liability affirmance handed down by the Federal Circuit. The patentee won. All appeals were over. Nothing left but the shouting. Of course, policy debates erupted over whether it was good or bad to have this kind of plaintiff (a noncommercial one) win so much from that kind of defendant (one who makes lots of consumer products). But the cake was baked in the case itself, an injunction growing more likely each day. 

Imagine my surprise when I read these words in March 2006 from the high priests of property rights Conservativism:  a Wall Street Journal opinion piece targeted to millions of its readers, titled “Patently Absurd:” 

“In the RIM case, NTP offers no product that competes with BlackBerrys. It sells nothing at all. But last week the judge in the case held a hearing on whether to shut down BlackBerry service in the U.S. on account of the alleged patent infringement.”

Catch that? “Alleged” patent infringement. It was a tirade against property rights from the Wall Street Journal! What topsy-turvy world was this? The victim of a property rights trespass gets called out for no other reason than it protected itself in court. And this was no nuisance case. This tirade came after no reasonable doubt could remain that RIM was a guilty, liable infringer.

Actions Form Morals

I thought back to that 1980’s morality experiment. Actions form morals. What kind of awful act does someone have to commit to shift a moral frame of reference so much as to make a Conservative jettison entrenched values, picking up and waving a proverbial socialist flag instead?

Astute readers will recall that the Wall Street Journal opinion page was not where one read about virtues of Soviet viewpoints on property. Also newsworthy at the time was another legal ruling over property rights. The Supreme Court had just decided Kelo v. New London, Connecticut in June 2005. Conservatives were appalled at the result. That decision permitted imminent domain condemnation on its particular facts, expanding the takings power of local governments. After Kelo, a city could “take” real property from one private owner to bestow on another private owner, if the government simply determines the recipient will put the property to good public use (regardless of whether “blight” pervades the area). Enter the Wall Street Journal opinion page (yes, that same one, those same people). At that time in 2005, it rallied behind Conservative principles. Its editorial on Kelo pilloried this maltreatment of the Constitution, this savage embrace of collectivism, and this derogation from the principles of and respect for private property. Shame on you David Souter.

Evidently, all property rights are equal, but some are more equal than others.

Did the authors’ moral code determine their position on a policy question? Or did the authors’ everyday actions (being BlackBerry consumers who could not conceive of themselves doing something wrong) drag their viewpoints into a hypocritical quicksand? 

Masimo vs Apple and Human Nature

Now it is today. Look around and you see it happening again. Smart people, previously principled people, jump on the anti-patent bandwagon because a case in the news happens to involve a product they use. And like before, principled morality is the first casualty. Commentators en masse write about Masimo’s International Trade Commission win against Apple. To my eye, the slant writers give their analysis hinges entirely on which camp they like. If I wear the Apple watch and I am a fan of the company, Masimo’s win is an indictment of a system that disrespects the contributions of innovative West Coast tech companies. If I am a patent owner or sympathizer, Apple’s loss is proof positive the rumors are true, that it builds its success on the backs (and ingenuity) of others.

This reminds me so much of 2006-era BlackBerry infringement reporting. Strangely missing is much commentary on how the infringement determination actually came to be. Here’s a morality I believe in: If Apple is an infringer under the “rules of the game,” it must face the consequences. If conversely Masimo slipped one by somnolent gatekeepers and truly had no case, I want to know that, too. I do not want to support any company’s post-win gloating if the win itself was flimsy.

After my investigation, I believe Masimo’s win was not flimsy. It was sturdy. The ITC’s ruling, initially published by the presiding administrative law judge, reveals a company arguing just to argue without much substance to back it up. 

I was unfamiliar with Masimo’s patents before. They claim particular pulse oximeter designs. The claim language is not complex at all, as these things go. Here is claim 24 of U.S. Patent No. 10,945,648 (including claim 20, since claim 24 depends from claim 20). I have annotated where the elements were “not disputed” by Apple (according to the decision), and italicized the only elements in dispute:

20. A user-worn device configured to non-invasively determine measurements of a user’s tissue, the user-worn device comprising:

a plurality of light emitting diodes (LEDs); [“no dispute”]

at least four photodiodes configured to receive light emitted by the LEDs, the four photodiodes being arranged to capture light at different quadrants of tissue of a user; [“no dispute”]

a protrusion comprising a convex surface and a plurality of through holes, each through hole including a window and arranged over a different one of the at least four photodiodes; and

one or more processors configured to receive one or more signals from at least one of the photodiodes and determine measurements of oxygen saturation of the user. [“no dispute”]

24. The user-worn device of claim 20, wherein the protrusion comprises opaque material configured to substantially prevent light piping. [“no dispute”]

It turns out, only “through holes” and “arranged over” were in dispute for claim 24. Only two limitations. Apple mostly admitted infringement. How many Apple fans realize this? And how well did Apple argue its “wordplay” case? 

Through holes: According to the ALJ’s opinion, Apple argued that the plain meaning of through holes in this claim meant an opening completely devoid of any material, including clear transparent material. In other words, Apple would have argued that putting clear matter into holes (as the Apple Watch does) made them not holes. The ALJ rejected this notion as a matter of plain meaning claim construction. For example, a “swimming hole” has water in it, and it remains a hole; a skylight is a hole in a roof, even when it has glass.

Arranged over: According to the ALJ’s opinion, Apple argued that the plain meaning of “arranged over” meant that only a structure that was completely vertical with respect to the earth as a frame of reference could infringe. In other words, Apple would have argued that a wearable item like an Apple Watch, that has no fixed position to the earth, cannot infringe because no part is “over” another part. The ALJ rejected this notion, too, as a matter of plain meaning claim construction. The proper sense is relative positioning. For example, one wears a bandage “over” a wound. The bandage is not “over” something only because it has a fixed vertical relationship with the earth.

Of course there were additional complexities to the arguments, such as each side citing parts of the intrinsic record to make its particular point. But this paints the picture. Apple pressed arguments that were unsuccessful because they broke down on a plain meaning analysis that even a Third Grader can understand. A “through hole” can have clear material in it and still be a hole (like a swimming hole or a skylight). And something can be “over” something else even while it is worn on a body part (just as a bandage goes “over” a wound). 

And let’s not forget that Masimo vanquished Apple’s invalidity challenge juggernaut. Apple filed 33 inter-partes review (IPR) petitions on 22 Masimo patents at the Patent Trial and Appeal Board. Apple challenged 473 claims, of which 343 were held unpatentable by the PTAB. To the untrained eye, this might sound like a mixed outcome, but to a professional eye, this was a Masimo route. It only takes one valid and infringed claim to win a case, and Apple’s strategy to bomb Masimo’s intellectual property rights back to the stone age resoundingly failed. Apple’s invalidity argument at the ITC, in particular, for claim 24, centered around U.S. Patent No. 7,620,212 assigned to Lumidigm, Inc. Lumidigm teaches an electro-optical sensor in a wristwatch, not something specifically intended to measure a user’s blood oxygen saturation. The ALJ found that Lumidigm, alone or in combination, failed to meet three claim limitations, “[20D],” “[20E],” and “[24].” 

Few Apple fans realize how much of the Masimo infringement Apple admitted (“no dispute”), nor the strained nature of Apple’s remnant advocacy. Judge the morality of a given patent infringement situation by the infringement determined by a fair tribunal, not by whether you stand on one side of a line or another. Fail these principles, and you indulge moral relativism just as pernicious as that shown by the Wall Street Journal editor who in 2006 called the BlackBerry maker a mere “alleged” infringer, after every level of the federal court system, all the way to the Supreme Court, found it an “actual” infringer.