Less than four days ago, Apple announced plans to pull the Watch 9 and Ultra 2 from its website on December 21st and from physical stores on December 25th. The result of an import ban handed by the US International Trade Commission, the ban essentially leaves Apple with just the Watch SE for sale in the US (the Watch SE doesn’t have the pulse oximetry tech in question). The ITC believes that Apple has infringed on the patents for pulse oximetry tech made by Masimo, a medical device maker.
It has to be noted that the ban does not apply in other parts of the world and Apple can continue to sell all three of its smartwatches as of right now. The patents in question do hold in Germany, the rest of Europe and Japan. So Masimo could try and get the Apple watches banned from sale there as well.
No repairs either for Watch 6 and later
It also appears that existing Apple Watch users (not limited to the Watch 9 and Ultra 2) could have trouble getting their watches repaired out of warranty. Reportedly, Apple has informed customer service employees that out-of-warranty hardware repairs and replacements for the Apple Watch Series 6 onwards will not be possible for the duration of the ban. This is said to not affect Apple Watch owners with an active warranty and people who own the SE.
Why has Apple been banned from selling the Watch 9 and Ultra 2?
This is the first time Apple has been forced to take such a drastic step even though it has been the subject of several suits before. At its very core, the ITC judgement found that Apple infringed upon patent no. US 10,945,648, only one of the five that Masimo claimed Apple was guilty of infringing on. All five patents were developed by Masimo and relate to how light sensors can measure the level of blood oxygen using light pulses.
Apple has been found to have infringed on claim 24 and claim 30 of the patent, which dealt with “wherein the protrusion comprises opaque material configured to substantially prevent light piping” and “wherein the protrusion further comprises one or more chamfered edges,” respectively.
The Apple-Masimo relationship and a timeline of events
While the case itself is getting a lot of attention right now, it is something that has been slowly brewing for at least a few years. It all started when Apple tried to get Masimo onboard for its tech roughly ten years ago, before Apple introduced the first Apple Watch. The deal fell through, and Apple went to poach several engineers and their chief medical officer. Soon enough the Apple Watch was first announced. However, it was only with the Apple Watch Series 6 that pulse oximetry debuted as a feature on an Apple Watch.
Masimo filed its first complaint on January 9, 2020 at the California Central District Court (Masimo Corporation et al. v. Apple Inc. CDCA-8-20-cv-00048), accusing Apple of infringing on 12 of its patents. Apple filed petitions for all 12 patents. This was followed by Masimo filing the case (Certain Light-Based Physiological Measurement Devices and Components Thereof ITC-337-TA-1276) at the US ITC on June 29, 2021 seeking an import ban.
Last year on October 20, 2022, Apple filed two lawsuits at the Delaware District Court (DDE-1-22-cv-01377 and DDE-1-22-cv-01378) against the Masimo W1, a smartwatch with health-tracking capabilities. Apple claimed that the Masimo W1 cloned the Apple Watch in both functionality and design.
In January this year, the judge hearing the case at the ITC ruled that Apple did indeed infringe on one of Masimo’s patents in the Apple Watch Series 6 (Apple’s subsequent Watch models employ the same tech). Soon enough, on January 24, Masimo requested a cease and desist order to block imports of the infringing Apple Watch products, effectively asking for a ban as the Apple Watch isn’t manufactured in the US.
However, it was only on October 26th that the court decided to issue an order preventing the import of the Watch 9 and Ultra 2 into the US. The order is set to go into effect after a 60-day Presidential review period which ends in two days from now. As it stands, there have been no signs from the White House about a possible intervention.
What can Apple do to keep selling the Apple Watch Series 9 and Ultra 2?
For starters, it appears that Apple can’t simply push a software update to deactivate the feature and extricate itself from this situation. At least that’s what Masimo CEO, Joe Kiani, seems to think. In a recent interview with Bloomberg, he said,” I don’t think that could work — it shouldn’t — because our patents are not about the software.” He added. “They are about the hardware with the software.”
Apple understandably tried to delay the ban, but it lost the motion. So there aren’t many legal options at its disposal. It could of course appeal the verdict, but that in itself is a long process that Apple can ill afford waiting for. But Apple isn’t simply going to give up on a $17 billion segment of its business either.
There’s the option of entirely removing the pulse oximeter from the Watch but that again would come at a significant cost to Apple, both in terms of monetary costs to rejig their supply chain and engineering processes as well as how long it will take to execute. Disrupting Apple’s carefully crafted supply chain is bound to create problems in the short run.
There is a far more straightforward approach that Apple can take – hammering out a licensing deal with Masimo. The Masimo CEO has even indicated that they’d be open to a conversation on that. But that is a route Apple is seldom known to take.
A longer-term solution could be simply manufacturing the Apple Watches in the US, but again that will prove to be frightfully expensive and will possibly take considerable time to execute.
The ECG tech on its watches could also be a source of concern for Apple
Apple’s problems with the Apple Watch don’t stop here either. On January 20, 2023, Apple was found to be infringing on two of AliveCor’s patents covering electrocardiogram (ECG) technology by the U.S. International Trade Commission (ITC). AliveCor is a medical device maker in the US. A ban could not be enforced because the patents by AliveCor were found to be unpatentable by the Patent Trial and Appeal Board (PTAB), a decision that AliveCor has appealed against.