Federal Circuit Affirms ITC Exclusion Order Against Apple Watch One Day After ITC Judge Approves Design-Around

On March 19, 2026, the U.S. Court of Appeals for the Federal Circuit affirmed the U.S. International Trade Commission’s determination that Apple violated Section 337 of the Tariff Act by importing Apple Watch models that infringe Masimo’s patents covering wearable blood oxygen measurement technology. Apple Inc. v. Int’l Trade Comm’n, No. 2024-1285, 2026 LX 148489 (Fed. Cir. Mar. 19, 2026). The court upheld the limited exclusion order (“LEO”) barring Apple’s importation of the infringing Apple Watches into the United States and rejected Apple’s challenges to the ITC’s domestic industry, claim construction, and validity findings, along with its rejection of Apple’s prosecution laches defense.

Notably, this decision issued just one day after an ITC administrative law judge (“ALJ”) issued a recommended determination finding that a redesigned version of the Apple Watch did not infringe the Masimo patents. If the Commission adopts that recommendation, Apple’s design-around could effectively moot the exclusion order that the Federal Circuit just upheld.

Taken together, the decisions show how parties can navigate the draconian effect of an exclusion order by pursuing the simultaneous paths of a Federal Circuit appeal and ancillary proceedings at the ITC and before U.S. Customs & Border Protection (“CBP”) to adjudicate a design-around.

I. Background

The litigation history between Apple and Masimo over the Apple Watch is long and complex, spanning multiple courts and two agencies. Relevant here, in September 2020, Apple launched the Apple Watch Series 6 with a “Blood Oxygen sensor” feature. Nine months later, in June 2021, Masimo and Cercacor Laboratories filed a complaint with the ITC, alleging that the Apple Watch infringed patents covering wearable blood oxygen measurement technology. Masimo initially did not pursue the typical parallel relief in U.S. District Court, which would have been subject to a mandatory stay upon request by Apple pending the ITC’s investigation. Instead, Masimo had filed an earlier district court complaint on a different set of patents. Apple subsequently filed its own district court complaint for patent infringement against Masimo, to which Masimo filed counterclaims of infringement, including infringement of the patents it had asserted earlier at the ITC. Those ITC-overlapping counterclaims were then stayed pending the conclusion of the ITC investigation. 

In October 2023, the Commission found a Section 337 violation on five claims and issued a limited exclusion order barring importation of the infringing Apple Watches. Two months later, near the Christmas holiday, Apple temporarily halted importation of the Apple Watch to comply with the ITC’s exclusion order. Apple appealed the ITC’s decision to the Federal Circuit, while pursuing a parallel approval from CBP to import a proposed design-around. CBP approved Apple’s design-around in early 2024, which used software to disable the infringing functionality. But CBP subsequently denied Apple’s second attempted redesign, which had sought to turn the infringing features back on by offloading the last step—oxygen measurement—to the iPhone. 

Later, Apple brought another design-around request to CBP, through importing a sample to a Customs Service field office, which then sought a ruling of infringement or non-infringement from CBP headquarters, which ultimately issued a ruling of non-infringement. Upon learning of this ruling which commenced and terminated without Masimo’s involvement, Masimo then sued CBP in U.S. District Court, asserting that the CBP’s ruling violated the Administrative Procedure Act. Masimo also requested that the ITC initiate enforcement and modification proceedings to adjudicate Apple’s approved design-around. 

The Federal Circuit’s opinion on the original ITC case, and the ITC ALJ’s recommendation in the modification proceeding, issued last week, one day apart.

II. The Federal Circuit’s Analysis 

Apple’s appeal of the underlying ITC case focused on its non-infringement, domestic industry, claim construction, invalidity, and prosecution laches defenses. The Federal Circuit rejected Apple’s challenges, and affirmed the ITC’s determinations across the board. Below are key takeaways on the domestic industry portion of the Federal Circuit’s findings.

A. Domestic Industry: Technical Prong

For the technical prong of the domestic industry requirement, Apple argued that the ITC improperly relied on a “hypothetical” Masimo Watch rather than a single, physical article. According to Apple, the “Masimo Watch” was hypothetical at the complaint’s filing because the prototypes did not, and could not, together identify as one single patent-practicing article. The Federal Circuit disagreed, finding that the Commission can consider whether a collection of prototypes satisfies the technical prong, as opposed to a single practicing article, including considering circumstantial evidence of the prototypes’ functionality.

B. Domestic Industry: Economic Prong

Apple also challenged the ITC’s crediting of Masimo’s investments in developing earlier-generation prototypes. The ALJ and Commission had relied on Masimo’s investments in research and development of the “Circle” and “Wings” prototype sensors, even though neither practiced the asserted claims. Here, the Federal Circuit made clear that the ITC can credit investments in prior iterations that do not practice the patent because these investments directly led to the development of the significant technical features of an ultimate patent-practicing commercial product (i.e., the investments were “specifically tailored” to the development of a patent-practicing commercial product). The court cautioned, however, that predecessor investments must be “specifically tailored” to significant components of a patent-practicing article—in other words, unrelated investments that would have been made independently do not qualify under this framework.

III. Impact on Co-Pending Proceeding

The Federal Circuit’s affirmance does not end the Apple-Masimo dispute. And what has happened in parallel underscores both the power and the limitations of ITC exclusion orders as an enforcement tool. While the Federal Circuit affirmed the ban on the Apple Watch Series 6, a separate ITC ancillary proceeding is underway to determine whether Apple’s redesigned Apple Watch—which moved the blood oxygen measurement from the Watch to the iPhone—should also be barred under the same order. Notably, just one day before the Federal Circuit issued its opinion, the ancillary proceeding’s administrative law judge released a recommended determination finding that the redesigned Apple Watch does not infringe the Masimo patents. If the Commission adopts that recommendation, Apple’s design-around subject of this recent recommended determination could effectively neutralize the very exclusion order the Federal Circuit just upheld. This potential result illustrates how ITC respondents can utilize time between issuance of an initial exclusion order and appellate decisions to strategize on ways to import products in view of the existing remedial orders.

Meanwhile, Masimo also pursued damages in a district court proceeding, where a jury awarded $634 million against Apple in late 2025. 

There, Masimo demonstrated that pursuing relief simultaneously through the ITC (for injunctive-style import bans) and district court (for monetary damages)—on non-overlapping patents—can serve to avoid a mandatory statutory stay of district court proceedings on patents asserted in the ITC. This approach can provide complementary forms of enforcement, particularly where design arounds are compelling avenues for a respondent to mitigate the impact of an exclusion order. Apple has indicated that it intends to appeal the damages award.

IV. Key Takeaways

• Prototypes Can Satisfy the Technical Prong: Patent holders considering an ITC complaint need not have a finalized, market-ready product at the time of filing. The Federal Circuit confirmed that only a “representative” article is required at the complaint stage, and the domestic industry article can evolve as product development progresses.
• Predecessor Investments Are Cognizable. For companies engaged in iterative product development, investments in earlier-generation prototypes may be credited toward the economic prong, even where those prototypes did not independently practice the asserted claims.
• Plan for Design-Arounds & Damages. The parallel developments in this case, e.g. a Federal Circuit win for Masimo alongside a potential ITC clearance of Apple’s redesigned watch, highlight the importance of thinking beyond the exclusion order itself. Patent holders should consider pursuing district court damages in tandem with ITC relief, as an import ban alone may be rendered moot by a respondent’s design-around. A dual-track strategy provides both injunctive leverage and a damages backstop. In particular, Masimo’s strategy of pursuing parallel relief on different sets of patents ensured that both cases proceeded without a stay.

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