Apple is pausing sales of new versions of its watch after losing a patent dispute
Apple said Monday it would pause sales of its flagship smartwatches online starting Thursday and at retail locations on Christmas Eve.
Two months ago, Apple lost a patent case over the technology its smartwatches use to detect people’s heartbeats. The company was ordered to stop selling the Apple Watch Series 9 and Watch Ultra 2 after Christmas, which could cause a run on sales of the watches in the final week of holiday shopping.
Apple’s move follows an International Trade Commission ruling in October that found several Apple Watches infringed on patents owned by Masimo, a medical technology company in Irvine, California.
In court, Masimo explained how Apple poached its top executives and more than a dozen other employees before later releasing a watch with pulse oximeter capabilities — which measures the percentage of oxygen that red blood cells carry from the lungs to the body – which are patented by Masimo.
To avoid a complete sales ban, Apple had two months to reach a deal with Masimo to license its technology, or the company could appeal to the Biden administration to overturn the ruling .
But Masimo CEO Joe Kiani said in an interview that Apple was not involved in licensing negotiations. Instead, he said Apple had called on President Biden to veto the ITC ruling, which Mr. Kiani knows because the administration contacted Masimo about Apple’s request.
“They are trying to give the impression that the agency is helping patent trolls,” Mr Kiani said of the ITC
Apple did not respond to requests for comment on Mr. Kiani’s comments. In a statement, the company said: “Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure Apple Watch is available to customers.”
The Biden administration did not immediately respond to request for comment.
Mr. Kiani said he was willing to sell Apple a chip that Masimo had designed to provide pulse oximeter readings on the Apple Watch. The chip is currently in a Masimo medical watch, called the W1, which is approved by the Food and Drug Administration. The device uses algorithms to process red and near-infrared light to determine how oxygenated the blood in the arteries is.
“If they don’t want to use our chip, I will work with them to make their product good,” Mr Kiani said. “If it’s good enough, I’ll be happy to license them.”
Apple introduced its first watch with pulse oximetry in 2020. The company has included the technology, which it calls “blood oxygen,” in subsequent models. But unlike Masimo’s W1 device, the FDA has not yet approved its watches for use as a medical device for pulse oximetry.
According to Bernstein Research, a financial research firm, the Apple Watch accounts for nearly $20 billion of the company’s $383.29 billion in annual revenue. Apple is the largest smartwatch seller in the world, accounting for about a third of all smartwatch sales, according to sources Counterpoint researcha technology research company.
Apple has been successful in the past in convincing presidents to veto ITC rulings. In 2013, the Obama administration was overthrown a ban on the sale of some iPhones and iPads after the court found that Apple had infringed a patent that Samsung owned.