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A Patent Disagreement Forces Apple To Stop Selling Series 9 Ultra 2 Smartwatches In The US

A Patent Disagreement Forces Apple To Stop Selling Series 9 Ultra 2 Smartwatches In The US
As it handles a patent dispute over the technology that powers the blood oxygen feature on the devices, Apple has announced that it would be pausing sales of its Series 9 and Ultra 2 smartwatches in the United States starting this week.
The action follows an October order from the U.S. International Trade Commission (ITC), which found that Apple Watches violate the patent rights of medical technology company Masimo and potentially prevent Apple from importing the devices.
President Joe Biden is reviewing the verdict through December 25. In the event that the ruling is upheld, Apple has stated that it will take the appropriate action.
The Biden administration's Office of the U.S. Trade Representative stated that Ambassador Katherine Tai "is carefully considering all factors in this case."
Dec. 26 is when the prohibition would take effect if it is not vetoed.
The watch's sales will be suspended, according to the firm, from its website beginning on December 21 and from Apple retail stores following December 24. The disagreement has no bearing on other versions that do not have the blood oxygen sensor, such as Apple's less expensive Apple Watch SE model.
The entire effect of the verdict, if it stands, will be felt in January and February, which are usually some of Apple's slowest months for sales in the United States, according to Ryan Reith, programme vice president for research firm IDC's mobile device monitoring operations. Reith also stated that U.S. Christmas sales of Apple Watches will not suffer.
"Apple has plenty of inventory of Watch 8 and SE so they will have products available during that time," Reith said. "The bigger implication is around whether or not Apple can use the blood oxygen sensor technology that is in question on future devices, or if they'll have to reach a settlement or come up with a new solution."
Joe Kiani, the CEO of Masimo, had stated in October that he was willing to discuss a transaction with Apple. Monday, Masimo released a statement in which she stated that the ITC ruling "should be respected, protecting intellectual property rights and maintaining public trust in the United States' patent system and encouragingUS industry."
According to Counterpoint Research, Apple holds roughly 25% of the worldwide smartwatch market. During the U.S. and European Christmas sales seasons, this proportion typically rises to more than a third in the fourth quarter. Outside of the US, the Series 9 and the Ultra 2 would continue to be sold, even in Asia during the Lunar New Year holiday.
Apple stated that it plans to challenge the ITC's judgement to the Federal Circuit, believing it to be incorrect and warranting reversal.
On Monday, Apple's stock finished 0.9% down.
The 'Wonderlust' event held by Apple at their Cupertino, California headquarters
Masimo has charged Apple with stealing its pulse oximetry technology, hiring away its staff, and putting it into the well-known Apple Watch.
In May, a jury trial in federal court in California concerning Masimo's accusations resulted in a mistrial. Apple has filed a new lawsuit against Masimo in a Delaware federal court for patent infringement. Apple refers to Masimo's legal activities as a "manoeuvre to clear a path" for its own competing smartwatch.
Apple's requests to have the validity of the patents at issue in the ITC ruling earlier this year reviewed were denied by the U.S. Patent and Trademark Office.
According to Bloomberg on Monday, which cited people familiar with the operation, Apple engineers are working to modify the algorithms in the smartwatches, changing how the device detects oxygen saturation and delivers the data to clients.
If the ban is upheld, Apple is developing a number of technological and legal alternatives. According to the source, it has started getting ready for the shift by distributing new banners to its retail locations that highlight the Apple Watch without featuring images of the Series 9 and Ultra 2, two models that are prohibited.
Apple is working on submitting a workaround to the U.S. customs agency, which is in charge of approving alterations to bring a device back on the market, a representative for the company told Bloomberg.
"The patents in question cover hardware. Masimo believes that Apple needs to change the hardware," a Masimo spokesperson told Reuters about the Bloomberg report, while Apple did not respond to a request for comment.
Although it had earlier on Monday stated it was working on "technical options" to guarantee Apple Watches are available to customers and that it would "take all measures" to get the gadgets back on shelves if the ITC order stands, Apple did not respond to Bloomberg's report.
Since 2013, when the administration of President Barack Obama reversed an import ban on Apple's iPhones and iPads due to a patent dispute with Samsung, no presidential administration has vetoed an ITC verdict.
In February, the Biden administration declined to veto a separate import ban on Apple Watches due to a complaint from the medical technology company AliveCor over patent infringement. For other reasons, the ITC has put the prohibition on hold.
According to a company report, Apple's wearables, home, and accessories division, which encompasses the Apple Watch, AirPods earbuds, and other items, generated $8.28 billion in revenue in the third quarter of 2023.

Christopher J. Mitchell

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