Apple To Halt The Sales Of Series 9, Ultra 2 Smartwatches Over Patent Dispute
In October, the U.S. International Trade Commission (ITC) announced that Apple Watches may breach medical technology company Masimo’s patent rights, barring them from import.
Apple announced that it would halt US sales of its Series 9 and Ultra 2 smartwatches this week due to a patent dispute over the blood oxygen capability. After the ITC found Apple Watches violated medical technology company Masimo’s patent rights in October, Apple could be barred from importing them.
President Joe Biden is reviewing the judgment until Dec. 25, but Apple indicated it will comply if it stands. The Biden administration’s Office of the U.S. Trade Representative said Ambassador Katherine Tai “is carefully considering all factors in this case.” The prohibition would take effect Dec. 26 if not vetoed. Apple announced it would halt watch sales from its website on Dec. 21 and its stores after Dec. 24. Apple Watch SE and other versions without the blood oxygen sensor are unaffected by the controversy. IDC program vice president Ryan Reith stated that U.S. holiday sales of Apple Watches would not be affected by the verdict and that the entire impact of the ruling if it stands, will come in January and February, Apple’s slowest sales months.
A user shares a post:
🍎Apple suspends the sales of Series 9 and Ultra 2 smartwatches.
Apple on Monday announced it would pause sales of the Series 9 and Ultra 2 smartwatches in the U.S. starting this week while it deals with a patent dispute involving the smartwatches’ blood oxygen sensor.#apple… pic.twitter.com/pr0LfBztVG— Ahmed Totonchi (@AhmedTotonchi) December 19, 2023
“Apple has plenty of Watch 8 and SE inventory so they will have products available,” Reith added. “The bigger question is whether Apple can use the blood oxygen sensor technology on future devices, or if they must settle or find a new solution.”Masimo CEO Joe Kiani told CNBC in October that he would negotiate with Apple. Masimo said Monday that the ITC judgment “should be respected, protecting intellectual property rights and maintaining public trust in the United States’ patent system and encouraging US industry.”
In the fourth quarter during the U.S. and European Christmas sales seasons, Counterpoint Research estimates that Apple holds more than a third of the global smartwatch market. The Series 9 and Ultra 2 would be sold abroad, including the Asian Lunar New Year.
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Apple plans to challenge the ITC’s judgment to the Federal Circuit, believing it was wrong. Monday saw Apple shares fall 0.9%. Masimo accuses Apple of poaching staff, stealing pulse oximetry technology, and putting it in the Apple Watch. A California federal jury trial on Masimo’s charges ended in May with a mistrial. Apple has separately sued Masimo for patent infringement in Delaware federal court, calling Masimo’s efforts a “maneuver to clear a path” for its competing smartwatch.
Apple’s attempts to reconsider the patents at issue in the ITC ruling earlier this year were denied by the USPTO.Apple engineers are changing smartwatch algorithms to determine oxygen saturation and provide data to customers, Bloomberg reported on Monday, citing sources. Apple is working on proposing a workaround to the U.S. customs agency, which approves alterations to get a device back on the market, Bloomberg said.
“These patents cover hardware. In response to the Bloomberg article, a Masimo spokeswoman told Reuters that Apple should update its hardware. Apple did not respond. Apple is considering legal and technical options if the prohibition stands. According to the source, it has sent new banners to its retail outlets that promote the Apple Watch without showing photographs of the Series 9 and Ultra 2, two models targeted by the restriction. Although Apple did not comment on Bloomberg’s claim, it said on Monday that it was working on “technical options” to bring Apple Watches back on sale and would “take all measures” if the ITC order stands.
A presidential administration had not vetoed an ITC verdict since 2013 when President Obama lifted an iPhone and iPad import restriction due to a Samsung patent dispute. In February, the Biden administration did not oppose an Apple Watch import restriction based on AliveCor’s patent-infringement claim. The ITC halted the suspension for other reasons. Apple’s wearables, home, and accessory division, which includes the Apple Watch and AirPods, earned $8.28 billion in the third quarter of 2023, according to a corporate report.
