Articles

Why Patents Become More Valuable as Markets Converge

The Apple–Masimo verdict shows how one well-positioned patent can retain economic force long after the underlying invention—and even the patent term—has aged.

Date: July 23, 2026
In November 2025, a California jury awarded Masimo $634 million after finding that Apple Watch heart-rate notification features infringed claims of Masimo’s U.S. Patent No. 10,433,776. In July 2026, the district court entered final judgment preserving that award after denying Apple’s post-trial effort to obtain judgment as a matter of law or a new trial. The judgment remains subject to appellate review.

The headline is the size of the verdict. The more useful lesson is the age of the asset.

The ’776 patent claims priority to July 2001, although it was not issued until 2019 and expired in 2022. Yet technology disclosed before the modern smartwatch market existed became the basis for a nine-figure verdict more than two decades later.

That is not an anomaly in how patents work. It is an illustration of why patents can become more valuable over time—especially as formerly separate industries converge around the same technical capabilities.
 

Patent value is not tied to the life cycle of one product

Companies often evaluate patents through the lens of the product that existed when the application was filed. If that product is discontinued, the engineering team moves on or the patent approaches expiration, the asset is treated as historical.

That view is too narrow.

A patent is not a certificate covering a particular commercial embodiment. Its enforceable scope is defined by its claims. A claim drafted around a durable technical function may reach implementations that were not commercially important—or perhaps did not yet exist—when the application was prepared.

Masimo’s patent is titled “Low Power Pulse Oximeter.” The asserted claims concern a patient monitor that changes operating protocols in response to detected signals. By the time of trial, however, the central infringement dispute concerned Apple Watch heart-rate notifications. The patent moved from the world of specialized medical monitoring into a dispute over a mass-market wearable because the accused product incorporated functions that once belonged largely to clinical equipment.

That pattern is becoming more common. Cars have become software platforms. Phones have become payment devices and health monitors. Industrial equipment has become a network of sensors, processors and predictive software. Consumer products increasingly absorb capabilities from medical devices, telecommunications, robotics and artificial intelligence.

Each convergence event can enlarge the commercial territory in which an older patent matters.


Claim language is the asset

The Apple–Masimo dispute also shows why small drafting choices can carry enormous economic consequences.

Apple’s trial and post-trial motions focused heavily on the phrase “patient monitor.” Apple argued that no reasonable jury could treat the accused Apple Watch features as satisfying that limitation. Masimo responded that the evidence—including Apple materials, testimony and the operation of the accused features—supported the jury’s finding under the term’s plain and ordinary meaning.

The difference between those positions was not academic. If “patient monitor” were confined to conventional clinical equipment, the consumer smartwatch could fall outside the claim. If the phrase covered a device configured to monitor a patient’s pulse rate in the manner recited by the claims, the same words could reach a product category that matured years after the patent’s priority date.

That is why patent drafting should be treated as asset design. The objective is not to describe only the current prototype with technical accuracy. It is to identify the inventive principle, claim it at several commercially meaningful levels and build fallback positions that can survive validity challenges without becoming irrelevant to the market.

No patent drafter can predict every future product. Good drafting does something more durable: it separates the invention from the temporary form in which the inventor first encountered it.
 

Expiration does not erase accrued value

The ’776 patent’s expiration is another important part of the story, but it requires precision.

An expired patent cannot be used to stop conduct occurring after expiration. The expiration date ends the right to exclude going forward. It does not automatically erase claims for infringement that occurred while the patent was enforceable. Subject to the six-year damages limitation, notice and marking rules and other defenses, a patent owner may still recover damages for pre-expiration infringement.

The Apple–Masimo verdict therefore does not mean that an expired patent continues to govern new activity indefinitely. It means an expired patent can remain economically consequential because liability and damages look backward.

For portfolio owners, the practical point is straightforward: do not equate “expired” with “worthless.” Before abandoning, selling or disregarding an older patent, a company should understand what the claims cover, where those claims may have been practiced and whether the relevant period still carries recoverable value.
 

Portfolios create asymmetric option value

The case began much broader than the patent issue that reached this verdict. Apple’s Rule 50(a) trial motion noted that Masimo’s infringement case had once involved 17 patents; the 2025 verdict form ultimately presented four claims of the ’776 patent.
That narrowing is not evidence that the portfolio failed. It is how portfolio value often works.

Most patents will never be asserted. Some will prove too narrow, encounter prior art or miss the market. Others will provide leverage in licensing, diligence, settlement, product design or a freedom-to-operate analysis without ever appearing in court. A small number may become disproportionately valuable because market adoption eventually aligns with their claim scope.

The resulting payoff is asymmetric. The cost of building and maintaining a thoughtful portfolio is distributed across many assets. The business impact may be carried by only one or two.

This is closer to an options portfolio than a collection of technical awards. The company is preserving the right—but not the obligation—to act if the market later moves into territory the claims cover.


What companies should do now

The Apple–Masimo record suggests four practical steps.

First, draft for the technical principle and the foreseeable market, not just the current product. Include claims at multiple levels of scope and avoid importing prototype details unless they are necessary for patentability.

Second, review portfolios against current markets, not old product roadmaps. A patent written for one industry may become relevant when another industry adopts the same sensing, control, communications or software architecture.

Third, conduct a substantive review before allowing older assets to lapse. Maintenance decisions should consider claim scope, competitor activity, remaining damages periods, continuations and strategic licensing value—not merely the age of the patent.

Fourth, treat freedom-to-operate as an ongoing process. A product can acquire patent exposure as new features are added and as it crosses into adjacent fields. A consumer device that becomes a health platform should be reviewed against more than consumer-electronics patents.
 

The long view

Patent value is rising in part because products are converging faster than patent portfolios expire. A technical solution developed for one market can become foundational in another, and scaled distribution can turn a once-niche claim into material enterprise exposure.

The lesson from Apple and Masimo is not that every old patent conceals a $634 million verdict. Most do not. The lesson is that companies routinely underestimate the duration and optionality of well-drafted patent rights.

The most valuable patent in a portfolio may not be the newest one. It may be the claim written years ago that the market has finally grown into.
 

ABOUT WHITEFORD | SchellIP

Whiteford and SchellIP help companies build and defend patent portfolios that survive market convergence—evaluating claim scope against current and foreseeable markets, assessing patent exposure as products evolve and cross into adjacent fields, conducting strategic reviews before assets lapse and translating technical principles into durable claim language. The goal is a clear picture of what a company's patent portfolio actually covers as industries converge, how defensible those claims remain across shifting competitive terrain, where hidden value persists in aging assets and what it means for product strategy, licensing leverage and enterprise valuation.

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