Apple Watch ban paused by appeals court

Company scores victory on ban that could cost billions of dollars

Apple has won a major victory in its fight over the future of the Watch.

In recent days, Apple has pulled the Watch from sale amid an ongoing dispute about patents owned by healthcare technology company Masimo, and the technology used in its blood oxygen sensors. It has been banned from importing the technology by US officials.

On Wednesday, however, Apple won a pause from the US appeals court. It did not overturn the ban but gave Apple a temporary reprieve.

Apple is yet to comment on whether it will put the Watch back on sale, and it is yet to appear on the company’s website.

The tech giant had filed an emergency request asking the US Court of Appeals for the Federal Circuit to halt the order after appealing the US International Trade Commission’s (ITC) decision that it had infringed Masimo’s patents.

Representatives for Apple and Masimo did not immediately respond to requests for comment.

Masimo shares were down 2.9% following the decision, and Apple shares were almost flat.

“This is a big win for Apple that was unexpected by many given the legal issues involved in this patent battle,” Wedbush Securities analyst Dan Ives said. “Masimo now has a big fight ahead. We expect an appeals case in January to be a big moment.”

In a four-paragraph ruling, the appeals court said it would halt the ban while it considers Apple‘s motion for a longer-term pause during the appeals process. The court gave the ITC until Jan. 10 to respond to Apple‘s request.

U.S. President Joe Biden’s administration declined to veto the ban on Tuesday, allowing it to take effect. Apple asked for a pause of the ban later that day.

Masimo has accused Apple of hiring away its employees, stealing its pulse oximetry technology and incorporating it into Apple Watches.

The ITC barred imports and sales of Apple Watches with technology for reading blood-oxygen levels. Apple has included a pulse oximeter feature in its smartwatches starting with its Series 6 model in 2020.

Apple has paused sales of its Series 9 and Ultra 2 smartwatches in the U.S., though the watches have remained available at other retailers including Amazon, Best Buy , Costco and Walmart.

The ban does not affect the Apple Watch SE, a less-expensive model without a pulse oximeter. Previously sold watches also will not be affected by the ban.

If the import ban remains in place, it could cost Apple from high hundreds of millions of dollars to very low billions of dollars, Ben Bajarin, CEO of analyst firm Creative Strategies, said before the decision was announced.

“Going forward, it’s absolutely certain they are going to have to take a different approach in future hardware to still enable this feature,” he said of Apple.

A jury trial on Masimo’s allegations against Apple in California federal court ended with a mistrial in May. Apple has separately sued Masimo for patent infringement in federal court in Delaware and called Masimo’s legal actions a “maneuver to clear a path” for its own competing smartwatch.

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

Additional reporting by Reuters