In between all the hype around Apple’s upcoming Apple Vision Pro, the Cupertino-based company has encountered an unexpected roadblock—an Apple Watch ban enforced by ITC. Two Apple Watch models, the Apple Watch Series 9 and Apple Ultra 2, will reportedly be pulled from shelves after 24 December, while online sales have been halted already. While this news was unexpected for us, Apple likely knew this was coming after the U.S. International Trade Commission found that Apple was violating a patent of proprietary technology that medical device maker Masimo held. The Apple Watch patent claims are something Apple has been fighting since 2020, but Masimo finally tasted victory resulting in the Apple Watch ban by ITC.
The two soon-to-be-banned Apple Watches use monitoring technology that only Masimo has a right to sell and as a result, Apple can no longer be allowed to make money off the devices unless they reach a licensing agreement with the medical tech company. Worse still, due to the repercussions of the Apple Masimo lawsuit, users with certain models of out-of-warranty Apple Watches will be unable to get their Watches repaired as well, creating issues not just for prospective buyers but existing ones as well.
The Apple Watch Ban—Breaking Down the Apple-Masimo Lawsuit
Masimo, a global medical technology company, has worked on creating a range of devices that can be used in hospitals and other medical settings to monitor the well-being of patients and improve their patient outcomes. One such technology is the Masimo SET Measure-through motion and low-perfusion pulse oximetry technology, which allows users to measure blood oxygen at any given time, in a simple, noninvasive way. Earlier in 2020, when Apple first introduced a similar monitoring feature in its Apple Watches, Masimo and its spinout company Cercacor Laboratories had filed a lawsuit accusing Apple of hiring away their ex-employees and stealing their trade secrets to get at their technology.
Back then, the case spanned a whole range of trade secret claims but Apple was quick to deny any claims of theft, stating that their own technology did not constitute any of the trade secrets that Masimo was worried about. The three-week-long trial ended with a hung jury despite a majority taking the side of the medical company in the Apple Masimo lawsuit, and the case was declared a mistrial. While Apple was grateful for the outcome, Masimo was left disappointed but unshaken in its pursuit to hold Apple accountable and push for an Apple Watch ban with the ITC.
In a sudden turn of events, Apple filed its own Apple Watch patent claim stating that the W1 smartwatches launched by Masimo strongly resembled Apple’s product, both in its internal and external design, according to FierceBioTech. The W1 watch had its own history of legal battles between its two parent companies, Philips and Masimo, but the companies decided to settle for a smaller amount and try out a partnership instead. No such conclusion is evident in the Apple Masimo lawsuit, and the Apple Watch ban will likely proceed despite Apple’s appeal to the ITC.
The Fate of the Apple Series 9 and Apple Ultra 2
“There is no greater offense to both the antitrust and intellectual property law than when a dominant firm infringes the patent of a smaller rival, who is an actual or potential competitor. In this case, as in the other cases involving Apple’s egregious abuse of market power, the harms far outweigh the benefits. In fact, because competition will swiftly replace any services or products that Apple is no longer able to deliver because of the remedy, there will be little harm and a great deal of benefit for consumers and the economy.”
—Masimo to the ITC
The Apple Watch is all set to proceed as Apple has not been able to deny the Apple Watch patent violation claims of using the “light-based pulse oximetry functionality and components” that Masimo holds the rights for. As a result, the Apple Series 9 and the Apple Ultra 2 will no longer be available in stores or online after 24th December. Apple had two months to seek a licensing agreement or make an appeal to the U.S. President who gets the final say on the decisions to uphold the ITC ruling, but reports indicate that Apple made no attempts to work with Masimo and find a middle ground that would allow its watches to stay on the market.
The delay in the ban has given Apple enough time to benefit from the holiday sales and purchases but with the news out on the matter, it is unlikely that many have considered making the purchase this month.
Apple Watch Ban Impact on Out-of-Warranty Watches
If Apple’s latest watches can’t be bought, you’d think owing the older models would be quite alright, but according to reports by Bloomberg’s Mark Gurman, Apple has made announcements to its customer service reps that repairs for out-of-warranty hardware devices and whole unit replacements for the Apple Watch Series 6 and anything that came after, will now be unavailable. The Apple Watch SE does not seem to fall under this regulation according to The Verge, but the other devices that have passed their warranty period will now be left to third-party services that may or may not be able to save the device. It is certainly not the best time to own the latest Apple Watches.
The Apple Watch ban by the ITC is not one that Apple is willing to accept quietly and the company has been looking into software upgrades it can make to circumvent the restrictions enforced by the Apple Masimo lawsuit. Masimo, however, does not think there is anything Apple can do without remaking the device entirely, as they believe the hardware used in the device falls at the center of the patent claims and would have to be altered for the watch to go back on the market.
According to 9to5Mac, during the Q1 2023 holiday quarter, Apple’s wearables business generated $13.48 billion in revenue and while that is only a small part of Apple’s overall earnings, it is quite enough to significantly hurt the company if sales numbers are disrupted for a prolonged period. The company is reportedly set to file an appeal on December 26 and has been approaching sources that could speak up for the Apple Watch as a critical medical device necessary for consumer health and citing clinical studies that rely on its technology. It is unlikely that such appeals will be enough to sway the Apple Watch ban that the ITC has enforced because the patented tech will remain unchanged no matter what Apple does. We’ll have to wait to see what really happens next.