Due to a patent disagreement, Apple will stop selling Series 9 Ultra 2 smartwatches in the US
Apple announced on Monday that it would halt the sales of its Series 9 and Ultra 2 smartwatches in the US starting this week due to an ongoing patent dispute related to the blood oxygen feature technology. This decision follows an October order from the US International Trade Commission (ITC), which found that Apple Watches violated the patent rights of medical technology company Masimo. The ITC decision is currently under review by President Joe Biden until December 25. Apple stated that it is taking steps to comply with the ruling should it stand, and the sales pause would go into effect on December 21 online and December 24 in retail locations.
The ITC ruling could potentially ban Apple from importing its Apple Watches if not vetoed, with the ban set to take effect on December 26. However, sales during the US holiday season are not expected to be significantly impacted, and the full repercussions, if the ruling holds, would likely be felt in January and February—traditionally slower sales months for Apple in the US. Products such as the Apple Watch SE, which lacks a blood oxygen sensor, remain unaffected by the dispute.
Apple has a substantial share of the global smartwatch market, constituting about a quarter, according to Counterpoint Research. The Series 9 and Ultra 2 smartwatches would still be available for purchase outside the United States, including during the Lunar New Year season in Asia. Apple expressed its belief that the ITC's finding was erroneous, intends to appeal the decision to the Federal Circuit, and plans to submit a workaround to the US customs agency to seek approval for changes that would allow the products back into the market.
The ongoing legal battle involves allegations by Masimo that Apple hired away its employees, stole pulse oximetry technology, and incorporated it into the Apple Watch. A jury trial on Masimo's claims ended in a mistrial in May, and Apple has separately sued Masimo for patent infringement. The US Patent and Trademark Office rejected Apple's requests to review the validity of the patents involved in the ITC decision. Apple is reportedly working on changes to algorithms in the smartwatches to adjust how the technology determines oxygen saturation and presents the data to customers. The company is exploring various legal and technical options in response to the potential ban, and its engineers are making adjustments to comply with the ruling.
A spokesperson for Masimo informed Reuters that the patents in question pertain to hardware, and Masimo contends that Apple needs to modify the hardware. Apple did not provide a comment on the Bloomberg report. However, earlier on Monday, the company stated it was actively working on "technical options" to ensure Apple Watches remain available to customers. Apple expressed its commitment to taking all necessary measures to return the devices to store shelves if the International Trade Commission (ITC) order stands.
While the Biden administration has until December 25 to review the ITC ruling, no presidential administration has vetoed an ITC decision since 2013. In that instance, President Barack Obama's administration overturned an import ban on Apple's iPhones and iPads arising from a patent dispute with Samsung. Earlier this year, the Biden administration chose not to veto a separate import ban on Apple Watches related to a patent-infringement complaint from medical technology firm AliveCor, although the ITC placed the ban on hold for other reasons.
According to Apple's financial report, the wearables, home, and accessory business, which includes the Apple Watch, AirPods earbuds, and other products, generated $8.28 billion in revenue during the third quarter of 2023.
