Apple will stop selling its Watches in the United States. Starting from 3pm ET on Thursday 21 December, Cupertino smartwatches will no longer be available for purchase online, and from 24 December not even in stores. It is a move to avoid further disputes after the International Trade Commission (ITC) ruled in favor of Masimo, a small Californian company that sued Apple accusing it of using some of its patents related to oxygen measurement technology without authorization in blood adapted on the Watch.
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The legal battle
There are actually two lawsuits: one filed in early 2020 is a lawsuit filed by Masimo in the US District Court in the Central District of California, the other in the ITC in June 2021. In the latter Masimo finds 103 instances of infringement of its intellectual property in five different Apple Watch patents. For the US authority, there are only two patents in question, as reported in last October’s ruling, but the result does not change: Apple cannot sell its smartwatches equipped with a pulse oximeter. There is a 60-day period between the publication of the ruling and its implementation in which the Biden administration can step in and veto the ITC’s decision, but so far the White House has chosen not to act. Thus Apple underlines that the announcement of the imminent suspension of sales is a preventive measure “to adapt if the ruling is confirmed”.
It has rarely happened that the US president has intervened in similar circumstances, but at least once Apple benefited: in 2013, Obama vetoed a possible iPhone ban requested during a legal battle with Samsung. Apple is the world‘s leading manufacturer of smartwatches, although the various Watch models have a relative impact on its turnover: approximately 17 billion dollars are estimated for the fiscal year just ended, out of a total of over 383 billion. The Cupertino company believes that the ITC’s decision will harm suppliers and consumers, potentially leading to an impact on the overall economy surrounding its smartwatch.
Apple also emphasizes the Apple Watch’s ability to help users discover potential health problems, and has on its side the American Heart Association and other major health organizations and doctors, as well as universities and associations that use the data provided by Apple Watch for clinical trials.
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Masimo, from hospitals to hi-fi
In a statement, Masimo said the ban “demonstrates that even the most powerful company in the world must abide by the law.” “The ITC has determined that Apple stole Masimo’s patented pulse oximetry technology, which measures oxygen in the blood,” the company states. “The ITC has undertaken a thorough legal process and its expert judgment in this matter must be respected, protecting intellectual property rights and maintaining public confidence in the U.S. patent system.”
Masimo was founded in 1989 by electrical engineer Joe Kiani, who was later joined by his colleague Mohamed Diab. The listing on the stock exchange arrived in 2007. In the meantime, it placed the first products on the market for hospitals and medical centers and in 2013, according to what we read in the complaint to the ITC, Apple contacted Masimo to discuss a collaboration. The deal doesn’t go through, but Apple reportedly used these meetings to obtain information and expertise, as well as hiring some employees before the launch of the Apple Watch. In 2022 Masimo launches its most important acquisition: Sound United, which owns major hi-fi brands such as Bowers & Wilkins, Denon, Marantz, Definitive Technology, Polk Audio, Classé and Boston Acoustics. The company has sought to leverage smart speakers as a smart home hub to aggregate health data from its services and devices. One of them, the W1 smartwatch launched last year, bears a clear resemblance to the Apple Watch and is equipped with very similar health monitoring functions, including oxygen level (SpO2), pulse rate, heart rate variability pulse rate, heart rate, heart rate variability, respiratory rate, plethism variability index and perfusion index. The business model involves a monthly or annual subscription to a service that collects data, analyzes it and possibly provides advice and alerts to improve health. The W1 is also the subject of a legal dispute, given that in October 2022 Apple sued Masino for having copied the design and features of the Apple Watch: indeed, for Cupertino the company would have tried to use the dispute with the ITC just to draw attention to its smartwatch. Further confirmation, according to Apple, is the fact that Masimo waited for the debut of the Apple Watch to file the patents that are currently under discussion.
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What happens now
Meanwhile, the issue only concerns the United States, so in the rest of the world all Apple Watch models will be on sale regularly. Then, in the USA, only the Watch Series 9 and the Ultra 2 are subject to the provision, and not the SE model. Again, the ITC’s decision only prohibits Apple from selling the affected models, which should therefore remain available through other channels, such as Amazon and Best Buy. However, the device would block imports of the Apple Watch Series 9 and Ultra 2 into the US after December 25, so it could end up affecting other retailers as well.
The blood oxygen monitoring feature has been available on the Apple Watch since 2020, with the Series 6: it will continue to work without problems, because the ban only applies to new sales.
“Apple teams work tirelessly to create products and services that offer users industry-leading health, wellness and safety features,” the company said in a statement to Italian Tech. “Apple strongly disagrees with the order and is pursuing a number of legal and technical options to ensure that Apple Watch is available to customers,” and of course among these is an appeal of the ITC ruling. “Should the ruling remain in effect, Apple will continue to take all measures to bring Apple Watch Series 9 and Apple Watch Ultra 2 back to customers in the United States as soon as possible.” For example, as Bloomberg notes, with a software update, which however may not completely resolve the issue, because according to Masimo the central core of the patent is made up of the hardware.