Apple has announced the suspension of sales for its Series 9 and Ultra 2 smartwatches in the United States, citing a patent dispute related to the technology supporting the blood oxygen feature on these devices.
This decision follows an October directive from the U.S. International Trade Commission (ITC), which could potentially prohibit Apple from importing Apple Watches due to alleged infringement of medical technology company Masimo’s patent rights.
The ruling is currently under review by President Joe Biden until December 25, and Apple has expressed its intention to comply with the decision if it stands. The Office of the U.S. Trade Representative, overseen by Ambassador Katherine Tai, is carefully evaluating the case.
Should the ban not be vetoed, it is slated to take effect on December 26. Apple has outlined that sales of the affected smartwatches will be halted on its website from December 21 and in Apple retail stores after December 24. However, models without the blood oxygen sensor, such as the lower-priced Apple Watch SE, remain unaffected.
Ryan Reith, Program Vice President for research firm IDC’s mobile device tracking, anticipates minimal impact on Apple Watch holiday sales, with the real consequences expected in January and February, typically slower sales months for Apple in the U.S.
Masimo CEO Joe Kiani, open to negotiation, has stated that the ITC decision should be respected for the protection of intellectual property rights. Apple holds a significant share of the global smartwatch market, particularly during the U.S. and European holiday sales seasons, but the impacted models will continue to be available for purchase outside the United States.
Apple contests the ITC’s finding, deeming it erroneous and intends to appeal the decision to the Federal Circuit. The company’s shares closed 0.9% lower on Monday.
Accusations from Masimo include employee poaching, technology theft, and incorporation of its pulse oximetry technology into the Apple Watch. While a mistrial occurred in a California federal court trial on Masimo’s allegations in May, Apple has counter-sued for patent infringement in a Delaware federal court.
The U.S. Patent and Trademark Office rejected Apple’s requests to review the patents, and Apple is reportedly adjusting algorithms in the smartwatches to address the blood oxygen sensor issue. Preparations for potential changes are underway in Apple stores, and the company is working on submitting a workaround to the U.S. customs agency.
Masimo asserts that Apple needs to modify the hardware, emphasizing that the patents in question cover hardware. Apple is exploring legal and technical options, and its wearables business, including the Apple Watch, remains a significant revenue generator, reporting $8.28 billion in revenue during the third quarter of 2023.