ITC Deals Blow to Apple in Ongoing Apple Watch Patent Battle

The U.S. International Trade Commission (ITC) has opposed Apple’s motion to pause the import ban on some Apple Watch models that was set to go into effect on January 13th, 2023. This latest development marks another dramatic turn in the high-stakes legal fight between Apple and health technology company Masimo over alleged patent infringement.

Background of the Apple-Masimo Legal Dispute

The legal dispute dates back to 2020 when Masimo first filed a complaint accusing Apple of infringing on 10 of its patents related to health monitoring technology. Specifically, Masimo alleged that Apple infringed by incorporating its patented technology into the Apple Watch to enable health and wellness features like irregular heart rate notifications, ECG app, blood oxygen app, breathing rate tracking during sleep, and more.

In October 2022, ITC Judge Charles Bullock issued an exclusion order banning imports of Apple Watches equipped with specific health monitoring features. The features cited included irregular heart rhythm notifications, ECG app, VO2 max capability, and more. Had this gone into effect, it would have effectively banned import of Apple’s latest Series 8, Ultra and SE model watches.

Apple subsequently appealed the ITC’s import ban, and also filed a motion in December 2022 asking the agency to stay (pause) the exclusion order pending appeal. But in a notice dated January 10, 2024, the ITC denied Apple’s request – dealing a major setback to the tech giant.

ITC Rationale for Denying Apple’s Stay Request

In opposing Apple’s stay motion, the ITC reasoned that Apple had not met the necessary burden to show that blocking the import ban was warranted. Some of the ITC’s key arguments included:

• No showing of irreparable harm to Apple: The ITC said Apple failed to demonstrate that allowing the import ban to take effect would cause irreparable economic harm that couldn’t be remedied later. The agency pointed out that Apple can still sell non-infringing watch models domestically.

• Public interest does not justify stay: While acknowledging potential public impacts on health monitoring availability and jobs, the ITC ultimately ruled these concerns were speculative and did not outweigh Masimo’s right to enforce its patents.

• Success on appeal is uncertain: The ITC noted the Federal Circuit could confirm their original finding of infringement when hearing Apple’s appeal. So allowing ongoing infringement in the interim was not appropriate.

What Happens Next with the Apple Watch Case

With the ITC denying Apple’s stay request, the import ban on certain Apple Watch models is currently set to go into effect on January 13th. However, Apple still has some avenues to block or overturn the exclusion order:

• Appeal to the Federal Circuit: Apple’s appeal of the ITC’s original determination is still set to be heard by the Court of Appeals for the Federal Circuit. If Apple wins this appeal, it could invalidate the import ban. But the case likely won’t be decided until later in 2024.

• Request emergency stay from Federal Circuit: Apple can still request an emergency stay of the import ban from the Federal Circuit while it hears the full appeal. If granted, this could allow Apple to continue imports in the interim.

• Seek review from Biden Administration: As a last resort, Apple can request the Biden Administration overturn the import ban on public interest grounds. But overruling the ITC is very rare, so the odds of success are slim.

If the import ban takes effect as planned on January 13th, Apple may be forced to remove key health monitoring features like ECG and irregular heart rhythm notifications from the Apple Watch until it can resolve the legal issues with Masimo. This could take many months and impact Apple’s competitiveness in the smartwatch market in 2024.

Impact on Apple Watch Availability in 2023

Even if an import ban takes effect soon, it likely won’t impact Apple Watch availability right away in 2023. Apple and third-party retailers still have ample supply of Series 8 and Ultra models in stock today that were imported last year before any ban.

However, if the legal dispute continues dragging into 2024 without resolution, availability of newer Series 9 or rumored Ultra 2 models could be jeopardized. These watches would normally launch around September 2024, so could fall under the import prohibition.

To summarize the situation:

• Existing inventory: Sufficient supply of Series 8 & Ultra watches for at least 1-2 quarters
• 2023 availability: Not affected regardless of import ban
• 2024 availability: Could be severely constrained for newer models like Series 9 or Ultra 2 if the ban persists

Here is a timeline summarizing possible scenarios and their potential impact on Apple Watch availability:

So in summary – while Apple Watch fans are unlikely to see supply disruptions in the next 6-12 months, the availability of the next generation Series 9 and rumored Ultra 2 could be severely jeopardized in late 2024 if Apple doesn’t prevail in its legal fight with Masimo.

All eyes will be on the pending Federal Circuit appeal decision expected in March 2024, as this will likely determine if import relief comes soon enough to avoid product launch delays or feature downgrades. We’ll be keeping a close eye on the case as it continues developing in 2024.

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