Tuesday, May 21, 2024

Apple announced on Monday that it will temporarily halt sales of its leading smartwatches both online, starting Thursday, and at retail locations on Christmas Eve.

Two months ago, Apple lost a patent lawsuit over the technology used in its smartwatches to detect pulse rates. This resulted in a court order to stop selling the Apple Watch Series 9 and Watch Ultra 2 after Christmas, which could lead to a rush in sales of the watches during the final week of holiday shopping.

This decision by Apple comes after a ruling by the International Trade Commission in October, which found that several Apple Watches infringe on patents held by Masimo, a medical technology company in Irvine, Calif.

During the court proceedings, Masimo outlined how Apple hired its top executives and over a dozen other employees before releasing a watch with pulse oximeter capabilities, which were patented by Masimo.

To avoid a complete sales ban, Apple had two months to negotiate a deal with Masimo to license its technology, or appeal to the Biden administration to reverse the ruling.

However, Joe Kiani, the CEO of Masimo, stated in an interview that Apple had not engaged in licensing negotiations. Instead, Apple appealed to President Biden to veto the I.T.C. ruling, as confirmed by Mr. Kiani after the administration contacted Masimo about Apple’s request.

In response to Mr. Kiani’s statements, Apple did not provide comments. The company’s statement indicated that it strongly disagrees with the order and is exploring various legal and technical options to ensure that Apple Watch remains available to customers.

Mr. Kiani expressed his willingness to sell Apple a chip that Masimo had designed to provide pulse oximeter readings on the Apple Watch. The chip is currently featured in a Masimo medical watch, called the W1, which is approved by the Food and Drug Administration.

“If they don’t want to use our chip, I’ll work with them to improve their product,” Mr. Kiani said. “Once it’s improved, I’m happy to provide them with a license.”

Apple first introduced its watch with pulse oximetry in 2020, and has since included the technology, known as “blood oxygen,” in subsequent models. However, unlike Masimo’s W1 device, Apple has not received FDA clearance for the use of its watches as medical devices for pulse oximetry.

According to Bernstein Research, the Apple Watch makes up almost $20 billion of the company’s annual sales of $383.29 billion. Apple is the leading smartwatch seller globally and accounts for approximately one-third of all smartwatch sales, according to Counterpoint Research.

Apple has had success in the past convincing presidents to overturn I.T.C. rulings. In 2013, the Obama administration lifted a ban on the sale of certain iPhones and iPads after the court concluded that Apple had infringed on a patent owned by Samsung.

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