Earlier this year, the US International Trade Commission (ITC) ruled that Apple had infringed on two patents from medical device maker Masimo. As a result, the ITC said it would impose an import ban on the Apple Watch Series 9 and Ultra 2 starting December 26th. At the time it was hard to believe that this would actually come to pass: Apple gets sued all the time, and even when it loses, how often does it actually face dramatic consequences?
Well, now would be one of those times. Experts say that, barring a Christmas miracle, it’s unlikely that Apple will find a way to escape the ban. Case in point, the company shocked everyone yesterday when it decided to preemptively pull the watches from its online store starting December 21st at 3PM ET. And after the 24th, they’ll disappear from Apple Stores, too.
“I think Apple sees the writing on the wall and they’re preparing themselves,” says Ben Levi, a partner at Levi Snotherly & Schaumberg, which has experience litigating ITC disputes.
It’s rare to see Big Tech lose — and with such tangible consequences at that. There are still ways that Apple can keep the watches on sale, but it’ll likely take a lot of waiting or a lot of money to make it happen.
This ban is the result of a long-standing patent dispute between Apple and the medical device maker Masimo. The latter is known for its pulse oximetry tech, generally referred to as SpO2 or blood oxygen saturation in the wearable world, and it claims that Apple is using that patented technology without permission.
This particular story started about 10 years ago when Apple reached out to Masimo about a potential partnership around blood oxygen features on its wearables. Soon after, Apple reportedly poached several Masimo engineers and its chief medical officer. And then in fall 2020, Apple released the Apple Watch Series 6 — its first Apple Watch to feature an SpO2 sensor to measure blood oxygen saturation levels.
In 2020, Masimo filed a lawsuit in the US District Court in the Central District of California accusing Apple of stealing trade secrets and infringing on 10 of its patents. That case dragged on and on, so Masimo then filed a separate case with the ITC in 2021. Then last year, Apple sued Masimo back, claiming the company made an Apple Watch clone with its Masimo W1 Medical Watch. Clearly, there’s some bad blood here. But in this case, the important thing is that the ITC sided with Masimo. In January 2023, it ruled that Apple Watches did in fact infringe on Masimo patents.
The ITC then issued an import ban in October, as well as an order to stop selling products infringing on Masimo’s patents that had already been imported. We’re currently nearing the end of a 60-day presidential review period, in which President Joe Biden or the US Trade Representative (USTR) has the opportunity to veto the ban. If there’s no veto by the time the review period ends, the ban will go into effect.
Apple getting a presidential veto would be like lightning striking the same place twice.
“It is extraordinarily rare for the President to overturn a decision from the International Trade Commission and in my view, [it’s] unlikely in this particular case,” says Andrei Iancu, co-chair of the Council for Innovation Promotion (C4IP) and partner at Sullivan & Cromwell LLP, who was also the director of the US Patent and Trademark Office from 2018 to 2021.
To get a veto, a company usually has to show a public interest or health policy basis — and that isn’t the case here. “It’s unlikely that the import exclusion order will be disapproved by the USTR and the president,” says Smith Brittingham, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. “The only real answer would be, ‘Well, it’s Apple.’”
That said, Apple did manage to beat the system once. In 2013, then President Barack Obama vetoed an import ban on the iPhone. At the time, Samsung accused Apple of infringing on its cellular data patents. But in that case, according to Levi, Apple was able to make the argument that there were issues regarding fair, reasonable, and nondiscriminatory licensing (FRAND). The patents involved were considered standard and essential, and the Obama administration was concerned the import ban would give Samsung “undue leverage.” Plus, it only impacted the iPhone 4 and older models of the iPad. Newer iPhones didn’t use an infringing chipset. In the case of the Apple Watch, Apple doesn’t have any of these arguments.
“In that case 10 years ago, Apple really rolled the dice and the pulled the rabbit out of the hat. It’s very unlikely for them to do that again,” says Levi.
A hail mary veto is unlikely, but that doesn’t mean Apple is just going to accept an import ban on a $17 billion segment of its business. Apple spokesperson Nikki Rothberg told The Verge in a statement that the company was “pursuing a range of legal and technical options to ensure that Apple Watch is available to customers.” That means the watch is going back on sale one way or another — it’s just a question of what path Apple takes.