In a pivotal turn of events, Apple has secured a temporary win in a U.S. appeals court, allowing the tech giant to resume sales of its flagship smartwatches. This follows a government commission’s import ban imposed in a patent dispute with Masimo, an Irvine-based company, over medical monitoring technology.
The urgent plea made by Apple to the U.S. Court of Appeals for the Federal Circuit successfully pressed pause on the U.S. International Trade Commission’s (ITC) order, which alleged Apple’s infringement on Masimo’s patents. The decision has potential financial implications for both companies, with millions of dollars at stake, possibly leading to a settlement or a technological workaround by Apple.
Analysts suggest that any financial setback for Apple may be overshadowed by the negative publicity generated by the lawsuit. Masimo, on the other hand, saw a 4.6% decline in its shares following the court’s decision.
Apple expressed enthusiasm about reinstating the full Apple Watch lineup to customers, including the Apple Watch Series 9 and Apple Watch Ultra 2, featuring the blood oxygen feature. These will be available for purchase in the United States at Apple Stores and online.
Masimo chose not to comment on the court’s decision, maintaining a stoic silence on the matter. The ITC had initially banned the import and sale of Apple Watches with blood-oxygen level reading technology. Apple’s inclusion of a pulse oximeter feature in its smartwatches, starting with the Series 6 model in 2020, triggered the dispute.
Masimo alleges that Apple unlawfully acquired its pulse oximetry technology and incorporated it into the Apple Watch, even accusing Apple of hiring away its employees. Apple countersued, characterizing Masimo’s legal actions as an attempt to pave the way for its own competing smartwatch.
The court’s four-paragraph ruling temporarily halts the ban as it considers Apple’s motion for a longer-term pause during the appeals process. The court has given the ITC until January 10 to respond to Apple’s request.
Despite Apple’s request for a pause, U.S. President Joe Biden’s administration declined to veto the ban, allowing it to take effect. Apple is actively exploring legal and technical options, and the U.S. Customs and Border Protection is assessing redesigned versions of Apple Watches for potential patent infringement.
Sales of the affected devices had been paused on Apple’s website and retail locations following the ITC decision but remained available at various retailers. The ban did not impact the Apple Watch SE, a less expensive model without a pulse oximeter, and previously sold watches were unaffected.
The ongoing legal battle, with its twists and turns, highlights the strategic importance of health-wearable products for Apple’s future. The wearables, home, and accessory business segment, including the Apple Watch, contributed significantly to Apple’s revenue, bringing in $8.28 billion in the third quarter of 2023, according to the company’s report.
