Apple wins reprieve in smartwatch battle as appeals court lifts import ban

Apple has secured a temporary victory in its legal tussle over smartwatches, as a US appeals court temporarily lifted a government commission's import ban imposed in a patent dispute with medical technology firm Masimo.

The tech giant swiftly filed an emergency request with the US Court of Appeals for the Federal Circuit, seeking a halt to the US International Trade Commission's (ITC) order that claimed Apple had violated Masimo's patents.

The ITC had banned imports and sales of certain Apple Watches featuring blood-oxygen level reading technology, citing patent infringement.

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While a final decision could potentially lead to significant financial repercussions for both companies, analysts note that the adverse publicity generated by the lawsuit may overshadow any financial impact on Apple. Following the court's decision, Masimo shares closed 4.6 per cent lower, while Apple's shares remained flat.

Apple expressed its enthusiasm to reintroduce the Apple Watch line-up to customers, stating, "We are thrilled to return the full Apple Watch line-up to customers in time for the new year."

The company plans to resume sales of the Apple Watch Series 9 and Apple Watch Ultra 2, featuring the blood oxygen feature, in the US.

Masimo, based in Irvine, California, refrained from commenting on the court decision. The ITC's ban, in place since Apple's Series 6 model in 2020, centred on technology for blood-oxygen level monitoring.

Masimo accused Apple of coaxing its employees, stealing pulse oximetry technology, and incorporating it into Apple Watches. Apple, in turn, countersued, characterising Masimo's legal actions as a strategy to pave the way for its own competing smartwatch.

Stuart Cole, Chief Macro Economist at Equiti Capital, noted that Apple's focus is not just on the blood oxygen monitoring software but also on the broader implications for its future health-wearable products. He emphasised that Apple, with its financial strength, can develop its blood monitoring software, but the public relations aspect remains a significant concern.

In response to Apple's motion for a longer-term pause during the appeals process, the appeals court issued a four-paragraph ruling, temporarily lifting the ban. The court has given the ITC until January 10 to respond to Apple's request.

Meanwhile, the Biden administration opted not to veto the ban, allowing it to take effect. Apple is actively exploring legal and technical options, and the US Customs and Border Protection is evaluating redesigned versions of Apple Watches to determine potential patent infringement.

This legal battle has led to a temporary pause in Apple's sales of the affected devices in the US, though they remain available through various retailers. The ban specifically targets Apple Watches with blood-oxygen monitoring, leaving the less-expensive Apple Watch SE unaffected. A jury trial earlier this year in California federal court regarding Masimo's allegations against Apple ended with a mistrial.

(With inputs from Reuters)

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