Apple Inc. has encountered a significant legal hurdle in its ongoing patent dispute with Masimo Corp. The U.S. Court of Appeals for the Federal Circuit ruled against Apple, reinstating a ban on the sale of its latest smartwatches equipped with blood oxygen sensors in the United States. This decision impacts the Apple Watch Series 9 and Watch Ultra 2 models, which utilize a technology known as pulse oximetry to measure blood oxygen levels.
This legal tussle began when Masimo accused Apple of infringing its intellectual property rights related to pulse oximetry technology. Masimo's claim extended to allegations that Apple, after rejecting a proposal to use Masimo's technology, hired several of Masimo's employees to develop a similar feature for its smartwatches.
The U.S. International Trade Commission (ITC) initially ruled in favor of Masimo in October, leading to a sales ban on the implicated Apple Watch models. Apple responded by temporarily halting sales of these models in December, both online and in its retail stores, in anticipation of the ban. However, the company sought legal recourse to overturn the ban, and in late December, managed to obtain a temporary stay from the appeals court, allowing sales to resume.
The latest ruling from the U.S. Court of Appeals, however, brings another twist to the saga. The court's decision, effective January 18, reinstates the ban, disallowing the sale of the specific Apple Watch models in Apple's own stores. Notably, the ruling does not extend to third-party retailers, who may continue selling their existing stock.
In response to this legal challenge, Apple had already been preparing for the possibility of an adverse decision. Reports from Bloomberg earlier in the week indicated that the company had received approval from U.S. Customs to import modified versions of the Watch Series 9 and Watch Ultra 2. These versions lack the contentious blood oxygen feature, thus sidestepping Masimo's intellectual property claims. This move could potentially allow Apple to continue selling these models without the banned feature.
The dispute underscores the complexities of technology patent laws and highlights the competitive nature of the smartwatch market. Apple's smartwatches are a significant part of its wearables, home, and accessories division, a business that contributed over 10% to its revenue last year, amounting to nearly $40 billion.
Masimo, on the other hand, has positioned itself as a pioneer in medical device technology, with its products widely used in healthcare settings. The company has been firm in its stance against what it perceives as Apple's infringement on its intellectual property.
As Apple navigates this legal challenge, customers may face limited availability of certain Apple Watch models in the U.S. market. However, the Apple Watch SE, which does not include the blood oxygen detection feature, remains unaffected and available for purchase.
Both companies have refrained from commenting on the latest court decision, which has once again stirred the tech industry, bringing attention to the ongoing debate over intellectual property rights in the realm of technology and innovation.