The popular Apple Watches could soon face an import ban in the United States, following a recent ruling from the United States International Trade Commission. The trade court issued a 'limited exclusion order' on certain Apple Watches, which would eventually lead to a ban on their imports. This move comes as a result of a violation of Masimo's patent on light-based technology used for reading biomarkers such as blood-oxygen levels.
The import ban and cease and desist order on sales of Apple Watches, except for the SEO model, is set to go into effect on December 26. Apple's smartwatches currently dominate around 60 percent of the smartwatch market, according to Counterpoint Research. The ban could have a significant impact on Apple's quarterly revenue of $8 billion from wearables.
While President Joe Biden has the power to prevent the ban, overriding the trade court's decision would be an unusual step. The trade court's ruling upholds a previous decision from January, supporting Masimo's claim that Apple unlawfully misappropriated its patented technology. Masimo's Founder, Chairman, and CEO, Joe Kiani, described the ruling as a validation of their efforts to hold Apple accountable.
Apple has stated its intention to appeal the order in federal court and has rejected Masimo's claims, emphasizing its respect for other companies' intellectual property. However, Masimo alleges that Apple strategically hired over 20 employees from their company instead of acquiring a license for the technology.
The Apple Watch Series 6 and subsequent models are accused of infringing on Masimo's blood-oxygen sensor patent. Apple recently launched the Apple Watch Series 9, which includes touchless features such as answering calls, taking photos, and snoozing alarms by tapping fingers together. The watches range in price from $399 to $699.
The trade court's ruling requires Apple to halt sales of all watches, except the SE model, on Christmas day. However, there is a possibility for a resolution if the two sides reach a deal that would allow Apple to continue using the technology. President Biden also has the power to reverse the ruling, although overruling nonpartisan agencies is uncommon.
In a separate legal battle, Apple has sued Masimo for patent infringement in a Delaware federal court, claiming that Masimo is attempting to clear a path for its own smartwatch. The outcome of these legal disputes will have far-reaching consequences for Apple's wearable device market in the US and beyond.