Apple may temporarily sell smartwatches after US appeals court victory




January 1, 2024

Apple can for now resume sales of its flagship smartwatches after a U.S. appeals court on Wednesday suspended an import ban on the devices imposed by a government commission in a patent dispute over its medical monitoring technology.


The technology giant had filed an emergency request asking the US Court of Appeals for the Federal Circuit to stay an order from the US International Trade Commission (ITC), which had ruled that Apple had infringed the patents of Masimo, based in Irvine, California.

A final decision could cost either company millions of dollars and potentially force a deal or some kind of technology solution from Apple, analysts said. Ultimately, however, any financial hit to Apple will likely be overshadowed by the bad publicity the lawsuit is generating, they said.

Masimo shares closed 4.6% lower at $115.11 following Wednesday’s decision, and Apple shares closed flat at $193.15.

“We are thrilled to return the full line of Apple Watch to customers in time for the new year,” Apple said in a statement. “Apple Watch Series 9 and Apple Watch Ultra 2, including blood oxygen functionality, will be available for purchase again in the United States in Apple Stores starting today and on tomorrow at 12 p.m. Peaceful”.

Masimo declined to comment on the court decision.

The ITC banned imports and sales of Apple watches with technology to read blood oxygen levels. Starting with its Series 6 model in 2020, Apple included a pulse oximeter feature in its smartwatches.

Masimo has accused Apple of recruiting its employees, stealing its pulse oximetry technology and incorporating it into Apple Watches. Apple has responded, calling Masimo’s legal actions a “move to clear the way” for its own competing smartwatch.

“Apple can easily develop its own blood monitoring software, it’s just a matter of time… Software development costs are not something that is too worrying for a company as wealthy as Apple,” said Stuart Cole, chief macroeconomics economist. of share capital.

“The bigger issue is that this is not very good PR for Apple, as it suggests that Apple is stealing technology from its competitors rather than developing its own. Apple is fighting this lawsuit more considering what it means for your future health. wearable products instead of this specific blood oxygen monitoring software,” he said.

In a four-paragraph ruling Wednesday, the appeals court said it would stay the ban while it considers Apple’s motion for a longer-term pause during the appeals process. The court gave the ITC until January 10 to respond to Apple’s request.

US President Joe Biden’s administration refused to veto the ban on Tuesday, allowing it to take effect. Apple called for a pause on the ban that same day.

Apple has said it is working on a variety of legal and technical options.
On Tuesday, the company told the court that U.S. Customs and Border Protection is considering whether redesigned versions of its watches infringe Masimo’s patents and can be imported. The customs agency has set a target date of January 12 to make its decision, Apple said.

Apple had suspended sales of the affected devices from its website and points of sale last week in the United States due to the ITC decision. They remained available at retailers such as Amazon, Best Buy, Costco and Walmart.

The ban did not affect the Apple Watch SE, a less expensive model without a pulse oximeter. Previously sold watches were also not affected by the ban.

A jury trial over Masimo’s allegations against Apple in federal court in California ended in a mistrial in May.
Apple’s wearables, home and accessories business, which includes the Apple Watch, AirPods headphones and other products, generated $8.28 billion in revenue during the third quarter of 2023, according to a company report.

© Thomson Reuters 2024 All rights reserved.

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