Apple has decided to cease the sales of its latest watches in the United States following allegations of patent rights violation.
The order, set to take effect on December 26th, prohibits the sale and import of watches featuring the disputed blood oxygen monitoring feature.
Apple, while planning to appeal the decision, has opted to remove the devices from its US website on December 21st and from stores in the country after Christmas Eve, although sales in other regions remain unaffected.
The legal entanglement stems from a dispute with California-based medical device firms Masimo and its spin-off, Cercacor. These companies accuse Apple of not only poaching key staff but also engaging in actions to unlawfully acquire technology developed for measuring oxygen levels in the blood.
Most versions of Apple’s smartwatches, including the Series 9 and Ultra 2, have incorporated the contentious feature since 2020, while the SE model does not.
In October, the US International Trade Commission sided with Masimo and Cercacor, asserting that Apple had indeed violated certain patent rights. Consequently, an order was issued to prohibit specific imports.
Apple responded by expressing strong disagreement with the order and asserting its commitment to pursuing various legal and technical options to ensure the availability of the Apple Watch to customers.
The conflict with Masimo extends beyond this particular case, as Apple has initiated its own claims of patent infringement against the medical device firms. A jury trial earlier this year regarding Masimo’s allegations of theft ended in a mistrial, adding complexity to the ongoing legal battle.
Apple’s Shares Experienced a Decline
Apple’s shares experienced a more than 1% decline in the wake of this news. However, analysts believe that the timing of Apple’s decision to remove the watches from the US market would mitigate serious damage, allowing holiday sales to proceed without significant disruption.
It’s worth noting that Apple’s wearables division, inclusive of the Apple Watch, contributed nearly $40 billion, accounting for approximately 10% of the company’s overall sales in the 12 months ending September 30th.
As the situation unfolds, Apple not only plans to appeal the International Trade Court decision but also seeks to have the order suspended during the appeal process.
The International Trade Commission order is currently subject to a 60-day review by the president, who possesses the authority to veto the decision.
While presidential intervention in such matters is rare, historical instances, such as former President Barack Obama’s involvement on behalf of Apple in 2013, indicate that the final outcome remains uncertain.
The review period is set to conclude on December 25th, adding an additional layer of anticipation to this already complex legal battle.