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Masimo (MASI) Gains on Favorable Ruling in Apple Watch Dispute
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Masimo’s (MASI - Free Report) shares rallied on Jan 17, following a favorable court ruling in its intellectual property dispute with Apple (AAPL - Free Report) over blood oxygen sensors in newer Apple Watch models. Per the latest ruling in the ongoing patent dispute litigation, Apple has to stop selling the watches with the oxygen measurement feature while an appeal of the ban plays out.
A ban on Series 9 and Ultra 2 watches from Apple in the United States may be beneficial for Masimo’s W1 watches that come with the blood oxygen sensors. Masimo W1 watch is the first FDA-cleared watch to provide continuous real-time oxygen saturation and pulse rate for over-the-counter and prescription use. In November, the Masimo W1 watch received FDA approval to include usage by adults in hospitals, clinics, long-term care facilities and homes as a medical device.
Price Performance
Masimo’s shares rose 2.1% on Jan 17. Shares of the company have lost 25.1% in the past year against the industry’s 0.5% growth. The S&P 500 has witnessed 22% growth in the said time frame.
Image Source: Zacks Investment Research
Dispute in Details
Masimo sued Apple in 2020 when the latter added a blood oxygen sensor to its watches, starting with Series 6. Following a three-year long battle, Masimo received its first favorable ruling against Apple. In October last year, the U.S. International Trade Commission ruled that a blood-oxygen sensor in the Apple Watch models infringed on Masimo's patents. This led to a ban on the import of infringing watch models by Apple in the United States.
However, Apple appealed against the ITC’s ruling in the U.S. Court of Appeals that granted a temporary stay to the import ban, allowing Apple to sell watches with disputed blood oxygen sensor in the U.S. market during the holiday season in December.
Although the litigation will continue at the U.S. Court of Appeals, the temporary stay on import ban will discontinue. With the removal of stay on the import ban, Apple will continue to market the disputed Series 9 and Ultra 2 watches, but disable a blood-oxygen monitoring feature. The company stated that watches with blood oxygen sensors that have already been sold will continue to have the feature. Moreover, the ban on the sale of certain Apple watches only applies to the U.S. market. The ruling does not impact any international sale of the watches.
The import ban may impact Apple’s revenues insignificantly as it continues to sell its watches in all markets with disabled blood oxygen sensor for certain models. However, the legal dispute is likely to tarnish the image of the company that may have a long-term impact. Masimo has also stated that fighting the battle with one of the biggest companies in the world is to lay focus on Apple’s image as a corporate bully engaged in the brazen theft of intellectual property.
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.6%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 38% compared with the industry’s 9% growth in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.4%.
Merit Medical’s shares have risen 12.3% compared with the industry’s 9.5% growth in the past year.
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Masimo (MASI) Gains on Favorable Ruling in Apple Watch Dispute
Masimo’s (MASI - Free Report) shares rallied on Jan 17, following a favorable court ruling in its intellectual property dispute with Apple (AAPL - Free Report) over blood oxygen sensors in newer Apple Watch models. Per the latest ruling in the ongoing patent dispute litigation, Apple has to stop selling the watches with the oxygen measurement feature while an appeal of the ban plays out.
A ban on Series 9 and Ultra 2 watches from Apple in the United States may be beneficial for Masimo’s W1 watches that come with the blood oxygen sensors. Masimo W1 watch is the first FDA-cleared watch to provide continuous real-time oxygen saturation and pulse rate for over-the-counter and prescription use. In November, the Masimo W1 watch received FDA approval to include usage by adults in hospitals, clinics, long-term care facilities and homes as a medical device.
Price Performance
Masimo’s shares rose 2.1% on Jan 17. Shares of the company have lost 25.1% in the past year against the industry’s 0.5% growth. The S&P 500 has witnessed 22% growth in the said time frame.
Image Source: Zacks Investment Research
Dispute in Details
Masimo sued Apple in 2020 when the latter added a blood oxygen sensor to its watches, starting with Series 6. Following a three-year long battle, Masimo received its first favorable ruling against Apple. In October last year, the U.S. International Trade Commission ruled that a blood-oxygen sensor in the Apple Watch models infringed on Masimo's patents. This led to a ban on the import of infringing watch models by Apple in the United States.
However, Apple appealed against the ITC’s ruling in the U.S. Court of Appeals that granted a temporary stay to the import ban, allowing Apple to sell watches with disputed blood oxygen sensor in the U.S. market during the holiday season in December.
Although the litigation will continue at the U.S. Court of Appeals, the temporary stay on import ban will discontinue. With the removal of stay on the import ban, Apple will continue to market the disputed Series 9 and Ultra 2 watches, but disable a blood-oxygen monitoring feature. The company stated that watches with blood oxygen sensors that have already been sold will continue to have the feature. Moreover, the ban on the sale of certain Apple watches only applies to the U.S. market. The ruling does not impact any international sale of the watches.
The import ban may impact Apple’s revenues insignificantly as it continues to sell its watches in all markets with disabled blood oxygen sensor for certain models. However, the legal dispute is likely to tarnish the image of the company that may have a long-term impact. Masimo has also stated that fighting the battle with one of the biggest companies in the world is to lay focus on Apple’s image as a corporate bully engaged in the brazen theft of intellectual property.
Masimo Corporation Price
Masimo Corporation price | Masimo Corporation Quote
Zacks Rank & Other Stocks to Consider
Masimo currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 36.6%. You can seethe complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have risen 38% compared with the industry’s 9% growth in the past year.
Merit Medical, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.4%.
Merit Medical’s shares have risen 12.3% compared with the industry’s 9.5% growth in the past year.