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Apple on Tuesday filed an appeal in an effort to overturn a ruling banning imports of Apple Watches because the tech giant infringed the patent rights of medical monitoring technology firm Masimo.
The U.S. International Trade Commission (ITC) issued an order that takes effect on Dec. 26 blocking imports and sales of Apple Watches that use blood oxygen-sensing technology covered by patents belonging to Masimo, which has also accused Apple of hiring away its employees.
Apple has used the technology in smart watches dating back to its Series 6 model in 2020, and the ruling blocked the import and sale of the Apple Watch Series 9 and Ultra 2. The Biden administration opted against vetoing the ruling, effectively allowing the restrictions to remain in place. Apple's appeal asks for the ban to be put on hold at least until U.S. Customs and Border Protection makes its decision on whether redesigned watches violate Masimo's patent. The customs office is expected to make its decision on Jan. 12, Apple said.
The Office of the U.S. Trade Representative (USTR) Katherine Tai released a statement noting that the ITC found Apple infringed two patents owned by Masimo and Cercacor Laboratories Inc., and that she declined to reverse the ITC’s ruling and would allow it to become final.
APPLE HALTING SALES OF SERIES 9, ULTRA 2 SMARTWATCH OVER PATENT DISPUTE
The Apple Watch Series 9 and Ultra 2 are at the center of a patent dispute that has resulted in the blocking of their importation and sale. (Krisztian Bocsi/Bloomberg via / Getty Images)
"Since 2005, the Office of the United States Trade Representative has been delegated the President’s authority under Section 337 of the Trade Act of 1930 to review the ITC’s decision for a 60-day period," the USTR wrote. "After careful consultations, Ambassador Tai decided not to reverse the ITC’s determination and the ITC’s decision became final on December 26, 2023."
A spokesperson for Masimo told FOX Business, "The ITC's decision marks a significant moment for the U.S. as a defender of innovation and a protector of inventors' rights. As inventors of measure through motion and low perfusion pulse oximetry, we hope to expose new consumers to accurate and reliable pulse oximetry. This is a win for the integrity of the U.S. patent system, and ultimately American consumers, who will benefit from an ecosystem that rewards true innovation."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 225.00 | -3.22 | -1.41% |
| MASI | MASIMO CORP. | 161.07 | +0.92 | +0.57% |
An Apple spokesperson confirmed to FOX Business that the company has appealed the ITC’s import ban on Apple Watches to the U.S. Court of Appeals for the Federal Circuit, which is based in Washington, D.C., and specializes in patent law and other administrative issues.
"At Apple, we work tirelessly to create products and services that meaningfully impact users' lives. It's what drives our teams — Clinical, Design and Engineering — to dedicate years to developing scientifically validated health, fitness and wellness features for Apple Watch, and we are inspired that millions of people around the world have benefited greatly from this product," Apple said in a statement.
"We strongly disagree with the USITC decision and resulting exclusion order, and are taking all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the U.S. as soon as possible," Apple added.
BIDEN ADMIN DECLINES TO OVERRULE TRADE COURT’S IMPORT BAN ON APPLE WATCH
Apple has halted sales of the Apple Watch Series 9 and Ultra 2 in the wake of the patent infringement ruling while it appeals. (Michael M. Santiago / Getty Images)
While the USTR was still reviewing the ITC decision, Apple preemptively took steps toward compliance. Apple announced on Dec. 18 that it would pause sales of the Series 9 and Ultra 2 smartwatches on its website beginning on Dec. 21, while the company’s retail locations were to stop selling those watches after Dec. 24.
Although Apple has paused sales of the watches, Reuters reported that they remain available from some other retailers as of Tuesday, such as Amazon, Best Buy and Walmart.
Versions of the Apple Watch that don’t contain the blood oxygen sensor are unaffected by the patent dispute and can continue to be sold, such as the less expensive Apple Watch SE. Previously sold watches won’t be affected by the ban.
Apple has filed an appeal of the ITC's patent infringement ruling with the U.S. Federal Circuit Court of Appeals. (Justin Sullivan / Getty Images)
Analysts at Stifel said in a note, "Our litigation expert predicted that a potential Apple appeal would extend the ‘final’ ITC case verdict roughly another year."
A jury trial regarding Masimo’s allegations in a California federal court ended with a mistrial in May. Apple has separately sued Masimo for patent infringement in a Delaware federal court and has called Masimo’s legal actions a "maneuver to clear a path" for its own competing smartwatch.
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The last time a president vetoed an ITC ruling was in 2013, when the Obama administration overturned an import ban on Apple’s iPhones and iPads that arose due to a patent dispute with Samsung.
In February of this year, the Biden administration opted against vetoing a separate import ban on Apple Watches based on a patent infringement complaint from medical technology firm AliveCor. The ITC placed the ban on hold for other reasons.
Reuters contributed to this report.