Recently, the patent dispute between Apple and Masimo has escalated again. After Apple circumvented the U.S. import ban on the blood oxygen monitoring feature of the Apple Watch by shifting the algorithm to the iPhone, Masimo promptly sued U.S. Customs to maintain the ban. This multi-year legal battle not only led to repeated product removals from the U.S. market but also revealed a critical fact: patent risks have become a "hidden minefield" for companies expanding overseas. For small and medium-sized enterprises (SMEs) with limited resources, a single infringement lawsuit could completely derail overseas market strategies.
I. Three Key Patent Risk Challenges Facing Companies Expanding Overseas
1. Territorial Patent Risk: The Compliance Trap of "One Country, One Policy"
Patent protection is strictly territorial. A technology that is legal in Country A may already be patented by someone else in Country B. For example, Masimo’s contested patents are only valid in the U.S., so Apple’s product features in the Chinese market were unaffected. However, Apple’s U.S. operations were repeatedly disrupted. If SMEs neglect patent landscape analysis in target markets, they may face the dilemma of "product bans immediately after launch," resulting in sunk costs from prior channel and marketing investments.
2. Inadequate Technical Workarounds: Short-Term Fixes for Immediate Problems
Some companies lack patent search awareness during R&D and only attempt to modify technical solutions after identifying infringement risks, often falling into a cycle of reactive workarounds. Although Apple temporarily bypassed the ban by shifting the blood oxygen monitoring algorithm to the iPhone, it still faces ongoing litigation risks. SMEs without systematic technical workaround capabilities may suffer performance degradation or miss market opportunities due to a single modification.
3. Lack of Compliance Processes: From "Unintentional Infringement" to High Compensation
Technology sectors such as medical devices and consumer electronics are densely populated with patents. Without a patent compliance process, even if a product passes local regulatory approvals (e.g., FDA certification), it may still infringe on existing patents. For example, a cross-border medical device company was sued for patent infringement after launching its product due to a lack of prior patent searches, ultimately paying compensation equivalent to 35% of its annual overseas revenue. A lack of compliance processes may cause companies to shift from "market expansion" to "working for others."
II. A Four-Step Patent Risk Mitigation Strategy
1. Proactively Map the "Patent Landscape": Identify Territorial Risks
Before entering overseas markets, companies must conduct comprehensive patent searches in target markets, focusing on competitors’ core patents and litigation trends. It is recommended to commission professional institutions to provide Freedom-to-Operate (FTO) reports, clearly identifying whether the product infringes on any valid patents in the region. For instance, before entering the European and U.S. markets, companies should search databases such as USPTO (United States Patent and Trademark Office) and EPO (European Patent Office), marking the scope of high-risk patent claims to avoid technical "line-crossing."
2. Technical Workarounds: From "Reactive Modifications" to "Proactive Design"
To address high-risk patents, companies can use a "five-step technical workaround" approach to redesign solutions: ① deconstruct patent claims; ② replace core components (e.g., switching from optical sensors to electrochemical sensors); ③ adjust algorithm logic (e.g., changing data sampling frequency); ④ add non-essential technical features; ⑤ adopt alternative materials. For example, a smart wearable company successfully avoided Masimo’s related patents by adjusting the red light wavelength for blood oxygen monitoring from 660nm to 630nm, enabling smooth market entry into Southeast Asia.
3. Empower Compliance with Tools: Reduce Procedural Risks
In the areas of patent searching, FTO report interpretation, and infringement risk assessment, SMEs can leverage digital tools to improve efficiency. For example, AI can automatically identify conflicting claims in multilingual patent documents, while localized compliance tools ensure technical documentation aligns with legal clauses in target markets. In this process, AI-powered multilingual translation and localization functions (such as those provided by platforms like LnRu) can significantly reduce compliance oversights caused by language barriers, allowing companies to focus more on technological innovation than document translation.
4. Cross-Licensing Strategy: Build a Patent "Defense Network"
If a product unavoidably involves third-party patents, companies can reduce risks through cross-licensing agreements. For example, actively applying for core technology patents to form a "patent pool" in target markets enables companies to use their own patents as leverage in negotiations when facing infringement lawsuits. Data shows that companies with more than 10 overseas patents have a 42% higher litigation success rate compared to those without patents.
III. SMEs’ "Risk Immunity": Long-Term Compliance Through Case Studies
The nearly decade-long dispute between Apple and Masimo fundamentally stems from the lack of an effective joint patent risk prevention mechanism. For SMEs, rather than spending money to settle lawsuits, it is more effective to integrate patent compliance into product lifecycle management: from FTO reports at the project initiation stage, to technical workarounds during R&D, and ongoing patent monitoring after market launch—creating a closed-loop management system. As one cross-border electronics company executive put it: “We invest 5% of our annual revenue in patent compliance. While it seems costly, we’ve had zero overseas infringement lawsuits in the past three years—that’s the best return on investment.”
There is no easy path to overseas expansion, but patent risks are not insurmountable. Through systematic patent searches, proactive technical workarounds, tool-based compliance, and strategic cross-licensing, SMEs can build a robust "patent immunity system" and achieve sustainable growth in global markets.