The U.S. won’t reverse the ban on Apple Watches, set by the International Trade Commission over patent-infringing technology. Masimo alleges Apple stole its pulse oximetry tech. Apple can appeal to the Federal Circuit. The ban, effective Dec. 26, impacts certain models, prompting a pause in sales.
AT A GLANCE
- Import Ban on Apple Watches: The U.S. government has allowed a ban on importing and selling certain Apple Watches due to a patent dispute with medical tech company Masimo.
- Effective Date: The ban, ordered by the U.S. International Trade Commission (ITC), will take effect on December 26, affecting Apple Watches using technology that allegedly infringes on Masimo’s patents.
- Pulse Oximeter Technology: The ban centers around the use of pulse oximeter technology for reading blood-oxygen levels, a feature introduced by Apple in its Series 6 smartwatch in 2020.
- Decision by U.S. Trade Representative: U.S. Trade Representative Katherine Tai decided not to reverse the ban after careful consultations, making the ITC’s ruling final as of December 26.
- Apple’s Response: Apple has the option to appeal the ban to the U.S. Court of Appeals for the Federal Circuit. The company has already paused sales of affected smartwatches but can continue selling the less expensive Apple Watch SE.
- Legal Dispute Background: Masimo has accused Apple of stealing its pulse oximetry technology and incorporating it into the Apple Watch. The ongoing legal battle includes a mistrial in California and Apple suing Masimo separately for patent infringement in Delaware federal court.
The highly anticipated decision regarding the Apple Watch import ban has arrived, with President Biden’s administration opting not to veto the ruling. This means that starting December 26, 2023, the import and sale of certain Apple Watch models in the US will be prohibited due to a patent infringement complaint from medical technology company Masimo.
The Dispute at Heart: Blood Oxygen Sensing and Patent Protection
The crux of the matter lies in Apple’s integration of blood oxygen sensing technology into its smartwatches, starting with the Series 6 model in 2020. Masimo claims that Apple infringed upon its patented technology in this area, accusing the tech giant of hiring away employees and stealing its intellectual property.
Legal Battles Ensue: Jury Trial, Mistrial, and Ongoing Patent Suits
In May 2023, a jury trial in California regarding Masimo’s allegations ended in a mistrial. Meanwhile, Apple took the fight to Delaware by filing a counter-patent infringement lawsuit against Masimo, viewing their legal actions as an attempt to clear the field for their own smartwatch launch.
The ITC Ruling and Biden Administration’s Decision
The US International Trade Commission (ITC) sided with Masimo, issuing an order in October 2023 that banned the import of Apple Watches utilizing the disputed technology. U.S. Trade Representative Katherine Tai, after careful consideration, decided not to overturn the ban, allowing the ITC’s ruling to take effect on December 26, 2023.
Impact on Apple Watch Sales and the Market
The import ban will directly impact the Series 9 and Ultra 2 models, which Apple proactively stopped selling in the US last week. However, the less expensive Apple Watch SE, featuring different technology, will remain available. Notably, previously purchased watches will not be affected by the ban.
This decision represents a significant development in the tech industry, highlighting the importance of intellectual property protection and its potential impact on innovation and competition.
Despite the setback, Apple still has options. The company can appeal the ITC ruling to the U.S. Court of Appeals for the Federal Circuit. Additionally, the ongoing patent lawsuits in Delaware offer another avenue for pursuing their case.
A Rare Presidential Veto, Historical Context & Potential Implications
It’s important to note that presidential vetoes of ITC rulings are extremely rare, with the last instance occurring in 2013 when President Obama overruled an import ban on Apple’s iPhones and iPads in a dispute with Samsung. The Biden administration’s decision against a veto in this case sets a precedent for future intellectual property disputes involving import bans.
Financial Implications and the Wearables Market
For Apple, the ban undoubtedly poses a financial challenge. The company’s wearables, home, and accessory business, which includes the Apple Watch, brought in a substantial $8.28 billion in revenue during the third quarter of 2023. The future impact of the ban on these numbers remains to be seen, but it will undoubtedly disrupt their market share and potentially slow down innovation in the smartwatch segment.
Future Landscape: Uncertainties and Potential Resolutions
The Apple Watch import ban is a complex issue with legal, technological, and economic implications. While the immediate future of certain Apple Watch models in the US market remains uncertain, the ongoing legal battles and potential appeals offer avenues for potential resolutions. As the situation unfolds, it will be interesting to see how both companies navigate this challenge and how it shapes the future of wearable technology and patent protection in the United States.
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Source(s): Reuters
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