Apple will be forced to stop selling its Apple Watch in the US this week over claims the devices are running on stolen technology.
Sales of the Apple Watch Series 9 and Ultra 2 will halt online starting on December 21 and from Apple retail locations beginning December 24.
The announcement means the only available Apple watch in the US will be the company’s budget SE model.
The ruling comes amid a legal dispute over the technology Apple’s smartwatches use to run their blood oxygen feature.
Industry experts told DailyMail.com it could result in at least a $200 million revenue loss for Apple during one of its most lucrative times of year.
The tech giant will be banned from selling its Apple Watch Series 9 (pictured) and the Apple Watch Ultra 2 starting on December 21
A Masimo spokesperson told DailyMail.com: ‘After a thorough multi-year legal investigation, the ITC found that Apple infringed certain of Masimo’s patented innovations for measuring blood oxygen. The decision to exclude certain foreign-made models of the Apple Watch demonstrates that even the world’s most powerful company must abide by the law.
‘The ITC’s expert judgment in this matter should be respected, protecting intellectual property rights, maintaining public trust in the United States’ patent system and encouraging US industry.
The International Trade Commission (ITC) issued the landmark ban, which is responsible for clamping down on unfair trade practices.
In October, the ITC announced its ruling, finding that the devices infringed on two patents owned by biotech company Masimo, based in California.
Masimo accused Apple of entering discussions with it for a potential partnership in 2013, only to steal the biotech startup’s idea and poach some of its engineers to implement it.
The Irvine-based company pioneered a sensor technology that consistently emits light through the skin to monitor blood oxygen saturation.
Apple’s technology shines red and near-infrared (IR) light into blood-perfused tissue.
Masimo was founded by Joe Kiani in 1989
According to the company website, Masimo, founded by Joe Kiani in 1989, holds thousands of healthcare and consumer-focused patents.
Data shows that Masimo is valued at $6.69 billion, and Kiani’s net worth is $1.3 billion.
And trading was down by more than five percent on Monday following news of Apple’s halt on its smartwatches.
Kiani told Forbes that he met with Apple in 2013 to discuss a possible collaboration for the Apple Watch project.
But Apple opted not to join forces with Masimo due to its focus on hospital products, which does not align with the tech giant’s consumer focus model.
A decade later, the two companies have met again – this time in court.
Masimo sued Apple in federal court in 2020 and again in 2021 after the Apple Watch Series 6 release, which was the first model to have the blood oxygen feature.
According to Forbes, Kiani has spent $60 million fighting Apple in court.
The ITC handed down its order in October, starting the clock on a 60-day Presidential Review Period, now set to expire on December 25.
The lawsuit stems from Apple implementing technology that measures blood oxygen on demand. Apple implemented a pulse oximeter in its smartwatches starting in 2020
The Biden administration can veto the ITC ban, but the White House has chosen not to act so far.
Apple said today’s announcement that it would be halting the sales of its watches is the company ‘preemptively taking steps to comply should the ruling stand.’
‘Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers,’ the company said.
It is rare for a president to veto a decision from the ITC, but Apple has benefitted from such an intervention in the past.
Masimo filed its complaint in 2021, claiming the tech giant used its medical innovation for its Apple Watches
President Obama vetoed a ban on the iPhone as part of Apple’s legal dispute with Samsung in 2013.
As of right now, there is no timeline on how long the Apple Watch Ultra 2 and Apple Watch Series 9 will be unavailable for purchase. The Biden administration could still step in and veto the ITC exclusion. If the ITC’s decision is upheld, there are a few ways forward.
Apple can appeal the ITC’s final decision with the US Court of Appeals for the Federal Circuit once the Presidential Review Period has expired.
As such, the company tells 9to5Mac that it plans to file an appeal on December 26. Appealing the decision, however, will not delay the ban on Apple Watch Series 9 and Apple Watch Ultra 2 sales and imports.
The two Masimo patents the ITC says Apple Watch infringes are not set to expire until August 2028.
Dan Ives, managing director for Wedbush Securities, told DailyMail.com that Apple’s wearables business generated $13.5 billion in revenue during the Q1 2023 holiday quarter.
‘We believe two percent of Apple Watch revenues will be at risk this quarter,’ he said.
There is no timeline on how long the ban will be in place, but there are several ways forward for Apple.
If Biden does not veto the ruling, then the company will surely appeal the ITC’s decision with the US Court of Appeals for the Federal Circuit after Christmas.
The appeal process itself would not undo the ban, however.
If Apple’s appeal is unsuccessful, it could be forced to wait until August 2028, when the two Masimo patents that the ITC says Apple Watch infringes are set to expire.
Masimo filed the ITC case just a few months after the newest patent was granted on March 16, 2021.
Customers who have ordered an Apple Watch Series 9 or Ultra 2 can collect them in-store until December 24, and shipments will still be fulfilled.