Effect of U.S. Ban on Apple Watch Sales Over Masimo’s Patent Dispute

Summary

  • The U.S. International Trade Commission (ITC) has imposed a ban on the import and sale of certain Apple Watches.
  • The ban originates from a complaint by medical-monitoring tech firm Masimo alleging patent infringement by Apple.
  • This affects the high-end Series 9 and Ultra 2 models of Apple Watches, but not the lower-end SE model.
  • Apple is expected to appeal the ban and is looking at software changes to bypass the disputed patents.

The Ban on Apple Watches: Key Information

Medical-monitoring technology company Masimo lodged a complaint against Apple, which led the U.S. International Trade Commission to impose an import and sales ban on Apple Watches in October. According to the complaint, a feature of the Apple Watch that measures blood-oxygen levels violates Masimo’s pulse oximetry patents.

Implications for Apple Watch Sales

Due to this restriction, Apple proactively suspended U.S. sales of its advanced Series 9 and Ultra 2 models ahead of the Christmas Day deadline. Nonetheless, the ITC’s order doesn’t affect the Apple Watch SE, a cheaper offering that retains its place in Apple’s catalog as it doesn’t have the disputed pulse-oximetry technology.

The Controversy Surrounding Apple

Masimo, a player in health tech, released a watch last year that reads blood-oxygen levels and monitors additional health metrics. It alleges that Apple poached its employees and appropriated its technology after potential collaboration talks. Apple has retaliated by accusing Masimo of using legal attacks to pave the way for its competing smartwatch, and in response, sued Masimo for patent infringement.

What’s Next for Apple?

Apple is projected to challenge the ban at the U.S. Court of Appeals for the Federal Circuit in Washington. Apple’s effort to suspend the prohibition during the appeal was unsuccessful. Presently, Apple is contemplating software modifications that would allow the watches to function without infringing Masimo’s patents, possibly enabling a resumption of sales and imports pending approval by U.S. Customs and Border Protection.

The ongoing legal dispute between Apple and Masimo over patent infringement could introduce volatility to both companies’ stock valuation, impacting potential trading decisions. The outcome of this case could affect the broader market of smartwatches and related technologies.

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