In a bold move, Apple has launched an appeal against the recent import ban imposed on its watches, triggered by a complaint from medical tech firm Masimo. The Biden administration, choosing not to intervene in the decision, has added fuel to the fire of this legal tussle.
Seeking a lifeline from the U.S. Court of Appeals for the Federal Circuit, Apple urgently filed a request to halt the ban until U.S. Customs and Border Protection assesses redesigned watch versions for potential patent infringement. Apple’s fate hangs in the balance until the customs office renders its decision on January 12, 2024.
Masimo accuses Apple of employee poaching, alleging theft of pulse oximetry technology incorporated into the highly popular Apple Watch. The U.S. International Trade Commission’s order, effective December 26, prohibits the import and sale of Apple Watches equipped with blood-oxygen level reading technology, introduced in the Series 6 model in 2020.
Despite fervent appeals from Apple, U.S. Trade Representative Katherine Tai upheld the ban, marking the ITC’s decision as final. In response, Apple spokespersons voiced strong disagreement, asserting their commitment to challenging the exclusion order and ensuring the return of Apple Watch Series 9 and Apple Watch Ultra 2 to U.S. customers promptly.
The ITC’s refusal to pause the ban during the appeal process and the Federal Circuit’s skepticism present significant hurdles for Apple. The tech giant has paused sales of the affected smartwatches in the U.S., but they remain available through various retailers, including Amazon, Best Buy, and Walmart.
While some experts suggest settling such disputes, Apple seems determined to navigate around the patents swiftly or eliminate the contested feature. Legal analysts predict that an Apple appeal could prolong the ITC case verdict by approximately a year.
In an unusual turn of events, Apple’s decision to live with the ITC order rather than settle has drawn attention. Stifel analysts anticipate that the ongoing legal battle could have repercussions, affecting the “final” ITC case verdict.
The ban, however, does not impact the Apple Watch SE, a less-expensive model that continues to be available for purchase. Previously sold watches remain unaffected by the import ban.
This legal saga unfolds against the backdrop of a mistrial in a California federal court regarding Masimo’s allegations, where Apple separately countersued for patent infringement. Apple contends that Masimo’s legal actions aim to pave the way for its own competing smartwatch.
The Biden administration’s decision not to veto the ITC ruling marks a departure from the precedent set in 2013 when President Barack Obama overturned an import ban on Apple’s iPhones and iPads. Apple’s wearables, home, and accessory business, including the Apple Watch, contributed a substantial $8.28 billion in revenue during the third quarter of 2023.
As Apple fights to overturn the ban and resume sales, the tech industry watches closely, anticipating the outcome of this high-stakes legal battle.
