U.S. Appeals Court Temporarily Lifts Ban on Apple Watch Sales Amid Patent Dispute

The dispute arose when the U.S. International Trade Commission (ITC) ruled that Apple had violated the patents held by Masimo, based in Irvine, California.

Apple has received a temporary reprieve in its legal battle with medical technology company Masimo over patent infringement related to its smartwatches. A U.S. appeals court has halted a government commission’s import ban on Apple’s flagship smartwatches, allowing the tech giant to resume sales for now.

The dispute arose when the U.S. International Trade Commission (ITC) ruled that Apple had violated the patents held by Masimo, based in Irvine, California.

Specifically, the patents were related to medical monitoring technology, including blood-oxygen level monitoring.

The ITC’s decision could have substantial financial consequences for both companies, potentially leading to costly settlements or technological workarounds.

In response to the ITC’s order, Apple urgently requested the U.S. Court of Appeals for the Federal Circuit to intervene and pause the import ban.

The court’s decision to temporarily lift the ban comes as a relief to Apple and allows the company to continue selling its Apple Watch Series 9 and Apple Watch Ultra 2 models, which include the blood oxygen feature.

While the financial implications of this legal battle are significant, analysts suggest that the damage to Apple’s reputation may be an even greater concern.

Masimo alleges that Apple unlawfully acquired its technology and incorporated it into its smartwatches, while Apple countersues, claiming that Masimo’s actions are intended to clear a path for its own competing smartwatch.

Stuart Cole, chief macro economist at Equiti Capital, believes that Apple can develop its blood monitoring software but acknowledges the PR implications of the lawsuit.

He notes that Apple’s primary concern may be the impact on its future health-wearable products.

The appeals court has granted a temporary halt while it considers Apple’s request for a longer-term pause during the appeals process.

The ITC has until January 10 to respond to Apple’s request.

U.S. President Joe Biden’s administration chose not to veto the ban, allowing it to take effect initially.

However, Apple is exploring various legal and technical options to address the situation. U.S. Customs and Border Protection is also evaluating redesigned versions of Apple’s watches to determine if they infringe on Masimo’s patents, with a decision expected by January 12.

Throughout this legal battle, Apple temporarily halted sales of affected devices on its website and in retail stores in the United States, although they remained available through other retailers.

The ban did not affect the less-expensive Apple Watch SE or previously sold watches.

Apple’s wearables, home, and accessory business, including the Apple Watch, contributed $8.28 billion in revenue during the third quarter of 2023, according to the company’s report.