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Apple Appeals Decision Allowing US Ban on Watch Imports Under Biden Administration

On Tuesday, Apple initiated an appeal against the decision to prohibit the import of its watches, a move triggered

by a complaint from medical monitoring tech company Masimo. 

This action comes after the Biden administration opted not to override a government tribunal’s ruling. 

Simultaneously, Apple filed an emergency request with the U.S. Court of Appeals for the Federal Circuit, seeking an injunction against the ban.

The tech giant is urging the Federal Circuit to temporarily halt the ban, at least until U.S. Customs and Border Protection assesses whether redesigned versions of its watches violate Masimo’s patents. 

Apple is also seeking to suspend the ban while the court reviews its request. The customs office is expected to deliver its decision on Jan. 12, according to Apple.

Masimo has accused Apple of poaching its employees, appropriating its pulse oximetry technology, and integrating it into the widely popular Apple Watch. 

The U.S. International Trade Commission (ITC) order, resulting from Masimo’s complaint, prohibits the import and sale of Apple Watches using technology for reading blood-oxygen levels. 

Apple introduced the pulse oximeter feature in its smartwatches starting with the Series 6 model in 2020.

Despite careful consultations, U.S. Trade Representative Katherine Tai chose not to overturn the ban, and the ITC’s decision became final on Dec. 26, as confirmed by the Trade Representative’s office on Tuesday. 

Apple has promptly appealed the ban to the U.S. Court of Appeals for the Federal Circuit in Washington, expressing strong disagreement with the USITC decision.

In a statement, Apple asserted, “We are taking all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the U.S. as soon as possible.” 

However, the ITC rejected Apple’s request to pause the ban during the appeal process, and it opposed Apple’s plea for the Federal Circuit to intervene in a court filing on Tuesday.

A spokesperson for Masimo hailed the ITC decision as “a win for the integrity of the U.S. patent system, and ultimately American consumers.” 

While disputes of this nature are typically settled, Apple seems determined either to swiftly design around the patents or remove the contested feature.

Nicholas Matich, an intellectual property attorney with law firm McKool Smith, noted that the ITC issuing an exclusion order is not legally extraordinary, but what sets this case apart is the high-profile nature of the product and Apple’s decision to comply with the ITC order instead of settling.

Stifel analysts, in a note, predicted that a potential Apple appeal could prolong the “final” ITC case verdict by roughly another year. 

Apple has temporarily halted sales of its Series 9 and Ultra 2 smartwatches in the U.S. since last week, although these watches remain available through other retailers like Amazon, Best Buy, and Walmart.

Importantly, the ban does not impact the Apple Watch SE, a less expensive model that will continue to be sold. 

Previously sold watches are also exempt from the ban. Notably, a jury trial on Masimo’s allegations in California federal court ended in a mistrial in May. 

Apple has countersued Masimo for patent infringement in federal court in Delaware, characterizing Masimo’s legal actions as a strategic move to clear the path for its own competing smartwatch.

The Biden administration’s decision not to veto the ITC ruling aligns with a trend since 2013, marking the first time a presidential administration has refrained from overturning an ITC ruling. 

Apple had faced a similar situation in 2013 when President Barack Obama’s administration overturned an import ban on Apple’s iPhones and iPads during its patent dispute with Samsung.

Earlier in February, the Biden administration also chose not to veto a separate import ban on Apple Watches, based on a patent-infringement complaint from medical tech company AliveCor. The ITC had temporarily placed that ban on hold for different reasons.

Apple’s wearables, home, and accessory business, encompassing the Apple Watch, AirPods earbuds, and other products, generated $8.28 billion in revenue during the third quarter of 2023, according to a company report. 

Source: production.wcms