Apple has been granted a temporary halt to the ITC ban on its Apple Watches.

In rebuke to ITC and Masimo, Apple scores timeout on Apple Watch ban with appeal

December 29, 2023
by John R. Fischer, Senior Reporter
Through an appeals court, Apple has hit pause on the International Trade Commission’s ban that bars it from selling Apple Watches containing a disputed blood oxygen sensor allegedly designed with stolen trade secrets.

The ITC proposed the ban in October based on a January 2023 verdict that found Apple guilty of infringing on a patent by Masimo, which accused Apple of stealing multiple patents and its employees to design the light-based pulse oximetry functionality that debuted in 2020 in the company’s Apple Watch Series 6 version.

The ban was scheduled to take effect on Christmas day and was not vetoed by President Joe Biden, who had 60 days to do so. Apple ended sales for the Apple Watch Series 9 and Apple Watch Ultra 2 at retail locations and on its website the week before. The ban did not affect the Apple Watch SE, a less expensive model without a pulse oximeter, or previously sold watches.

But on December 25, Apple filed an emergency request, asking the U.S. Court of Appeals for the Federal Circuit to postpone it until the U.S. Customs and Border Protection determines if redesigned versions of its watches violate Masimo trade secrets. The appeals court agreed, allowing Apple to resume sales, and gave the ITC until January 10 to respond to the appeal. The customs office is due to decide by January 12, reported Reuters.

"Apple Watch Series 9 and Apple Watch Ultra 2, including the blood oxygen feature, will become available for purchase again in the United States at Apple Stores starting today and from tomorrow by 12 p.m. PT,” said Apple in a statement.

Following the news, Masimo shares closed 4.6% lower at $115.11 while Apple shares closed flat at $193.15, reported Reuters. Masimo declined to comment on the decision.

Analysts told Reuters a final decision could cost either company millions, and potentially force a settlement or some kind of technological changes by Apple to its watches. They say a potential appeal would extend the final ITC case verdict by roughly another year, potentially giving Apple time to remove the infringing feature or work around it, but that Apple can expect to face more backlash the longer it drags out the lawsuit, according to Reuters.

According to a company report, Apple’s wearables, home, and accessory business, which includes the Apple Watch, made $8.28 billion in revenue in Q3 2023. Apple has continually refuted Masimo’s claims as a ploy to commercialize its own FDA-cleared health-tracking smartwatch, which allegedly has internal and external similarities to the Apple Watch.

Back in May, a California federal jury trial ended with a mistrial, with six voting that Apple did not infringe on trade secrets, while one took Masimo’s side.

Apple is also currently involved in a legal dispute with AliveCor. In late 2022, the ITC ruled that it stole AliveCor patents to create wearable EKG technology for its Apple Watches. Biden also did not overturn that ruling, but the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office ruled AliveCor’s patents were invalid, preventing the ITC ruling from affecting sales.

Wedbush Securities analyst Dan Ives told the Associated Press in December that the disputes with Masimo and AliveCor indicate that Apple may eventually have to enter into licensing deals or acquire startups specializing in the field to integrate these features with its watches.