Apple banned from selling Watch Series 9, Watch Ultra 2 in US after losing major patent case

In a significant blow to Apple’s holiday sales season, the tech giant has been forced to stop the sale of its latest smartwatch models, the Series 9 and Ultra 2, in the United States.

The decision comes after Apple lost a major patent infringement case, prompting a “pre-emptive” withdrawal of the products from its US stores.

The US International Trade Commission issued a “limited exclusion order” against the Apple Watch models in October, raising the possibility of a ban on device imports.

Apple’s patent nightmare
The case revolves around a patent dispute with medical device maker Masimo, which accused Apple of infringing on its patents with the blood oxygen sensor feature in its smartwatches. A US judge sided with Masimo in January, leading to the current ban.

Apple plans to halt online sales of the affected models on December 21 and in physical stores after December 24. The ban is set to take effect following a presidential review by Joe Biden, who holds the authority to veto the decision.

While presidential vetoes are rare, they have occurred in the past, such as when President Barack Obama intervened in favour of Apple in 2013 during a case against Samsung.

The deadline for the presidential review is December 25, and until then, the Apple Watch Series 9 and Ultra 2 will still be available through other US retailers. The ban does not impact sales in other countries.

Apple is currently appealing the ITC ruling and is exploring legal and technical options to ensure the availability of its smartwatches in the US. If the ban remains in place, Apple may need to modify the Watch’s software to remove the contested blood oxygen feature before resuming sales.

Masimo’s CEO, Joe Kiani, sees the ITC’s ruling as a message that even the world’s largest company is not above the law. This legal battle is not the only one for Apple, as it is also entangled in a patent dispute with medical device maker AliveCor over smartwatch technology.

The timing of the ban is likely to hurt Apple
Despite this setback, Apple remains the global market leader in smartwatches, holding an estimated 22 per cent share of unit shipments in the third quarter, according to Counterpoint Research. The company has continuously introduced new health monitoring features with each annual release to maintain consumer interest. Although Apple will surely weather this storm, the timing of the ban is surely going to hurt them.

Apple sees a ton of products moving around Christmas and New Year, two of the biggest festivities that they target globally. This is also the holiday season in which Apple gets most of its sales from. Given that the Apple Watch Series 9 and the Watch Ultra 2 will be forced to sit this sale season out, will drive sales down significantly, even if at some point later in the year, the ban is lifted.

The ban on the Watch Series 9 and Ultra 2 adds pressure on Apple, particularly as the company increasingly relies on the sales of accessories like the Apple Watch and AirPods to iPhone owners.

With the smartphone market experiencing a decline, Apple’s wearable tech products play a crucial role in sustaining its growth. Looking ahead, Apple is set to make a significant move into a new product category with the release of Vision Pro, its first “mixed reality” headset, in the coming year.

Masimo vs Apple: Where it all started
Masimo, a leading medical technology company, and tech giant Apple have been entangled in a series of legal disputes for several years, primarily revolving around allegations that Apple Watch’s blood oxygen sensor technology infringes on multiple Masimo patents.

The complex legal saga has two key components. Firstly, Masimo filed a lawsuit against Apple in the US District Court in the Central District of California in early 2020. Secondly, Masimo initiated a case with the International Trade Commission (ITC) in June 2021.

The decision to involve the ITC stemmed from Masimo’s frustration with the sluggish progress of the initial district court case. The ITC complaint, in turn, has compelled Apple to proactively cease sales of Apple Watch Series 9 and Apple Watch Ultra 2 in the United States.

In its initial complaint to the ITC, Masimo asserted that Apple had committed 103 instances of patent infringement spanning five different patents. However, upon investigation, the ITC concluded that Apple had infringed on only two patents, encompassing five instances of patent infringement. These specific violations were related to the Apple Watch’s pulse oximeter feature.

The ITC issued the exclusion order in October, initiating a 60-day Presidential Review Period, scheduled to conclude on December 25. During this period, the Biden administration has the authority to intervene and veto the ITC ban. Despite this power, the White House has not taken any action thus far.

The ongoing legal battle between Apple and Masimo underscores the high stakes involved in the wearable technology sector, particularly concerning health-monitoring features. As the clock ticks down on the Presidential Review Period, the tech industry eagerly awaits the potential resolution of this protracted dispute.

(With inputs from agencies)