Following a win in a U.S. appeals court, Apple is allowed to temporarily resume the sales of its flagship smartwatches. The court decision paused an import ban imposed by the U.S. International Trade Commission (ITC) in a patent dispute related to Apple's medical monitoring technology. Apple urgently sought the halt, arguing against the ITC's ruling that it had violated the patents of Masimo, a company based in Irvine, California.
The potential final decision, which could result in significant financial consequences for both companies, might lead to a settlement or require Apple to devise a technological workaround. Analysts anticipate that any financial impact on Apple, though potentially substantial, would be overshadowed by the negative publicity generated by the lawsuit.
Masimo's shares dropped by 4.6% to $115.11 following the court decision, while Apple's shares remained flat at $193.15. Apple expressed its enthusiasm to reintroduce the full Apple Watch lineup to customers in time for the new year, including the Apple Watch Series 9 and Apple Watch Ultra 2 with the blood oxygen feature.
The ITC had previously prohibited the import and sale of Apple Watches equipped with technology for reading blood-oxygen levels. Apple, starting with its Series 6 model in 2020, incorporated a pulse oximeter feature into its smartwatches. Masimo accused Apple of hiring its employees, stealing pulse oximetry technology, and integrating it into Apple Watches. Apple countered by characterizing Masimo's legal actions as an attempt to pave the way for its own competing smartwatch.
The appeals court's brief ruling temporarily halted the ban while considering Apple's request for a longer-term pause during the appeals process. The court instructed the ITC to respond to Apple's request by January 10. Despite U.S. President Joe Biden's administration choosing not to veto the ban on Tuesday, Apple is pursuing various legal and technical options.
The company informed the court that U.S. Customs and Border Protection is assessing redesigned versions of its watches for potential patent infringement, with a decision expected by January 12. Apple had previously suspended sales of the affected devices on its website and in retail locations but continued to be available through other retailers.
The ban specifically targeted Apple Watches featuring blood-oxygen monitoring, excluding the less-expensive Apple Watch SE and previously sold watches. Apple's wearables, home, and accessory business, encompassing products like the Apple Watch and AirPods, generated $8.28 billion in revenue during the third quarter of 2023, according to company reports.
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