© Reuters. FILE PHOTO: The new Apple Watches Ultra 2 are displayed during the 'Wonderlust' event at the company's headquarters in Cupertino, California, U.S., September 12, 2023. REUTERS/Loren Elliott/File Photo
By Blake Brittain
(Reuters) -Apple on Tuesday appealed a decision to ban imports of its watches based on a complaint from medical monitoring technology company Masimo (NASDAQ , after US President Joe Biden's administration refused to veto a court governmental.
The tech giant on Tuesday also filed an emergency request for the U.S. Court of Appeals for the Federal Circuit to halt the ban.
It asked the Federal Circuit to stay the ban at least until U.S. Customs and Border Protection decides whether redesigned versions of its watches infringe Masimo's patents, and to stay the ban while the court considers Apple's request ( NASDAQ:). The customs office will have to make its decision on January 12, Apple said.
Masimo has accused Apple of recruiting its employees, stealing its pulse oximetry technology and incorporating it into the popular Apple Watch.
The order from the United States International Trade Commission (ITC) prohibits imports and sales of Apple watches that use technology to read blood oxygen levels. Apple has included the pulse oximeter feature in its smartwatches starting with its Series 6 model in 2020.
U.S. Trade Representative Katherine Tai decided not to revoke the ban after careful consultation, and the ITC's decision became final on Dec. 26, the Trade Representative's office said Tuesday.
An Apple spokesperson said the company appealed the ban to the U.S. Court of Appeals for the Federal Circuit in Washington.
“We strongly disagree with the USITC's decision and the resulting exclusion order, and we are taking every step to return the Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the United States as soon as possible,” Apple said. in a statement on Tuesday.
Last week, the ITC rejected Apple's request to stay the ban during the appeals process and opposed Apple's request for the Federal Circuit to halt the ban in a court filing on Tuesday.
A Masimo spokesperson called the ITC's decision “a victory for the integrity of the U.S. patent system and, ultimately, for American consumers.”
While companies typically resolve these types of disputes, Apple may think it can quickly design around the patents or remove the infringing feature, said Nicholas Matich, an intellectual property attorney at law firm McKool Smith.
“There is nothing legally extraordinary about the ITC issuing an exclusion order,” Matich said. “What is extraordinary here is that the product in question is high profile and that Apple has chosen to live with the ITC order rather than settle.”
Stifel analysts said in a note that their litigation expert predicted that a possible appeal by Apple would extend the “final” verdict in the ITC case by about another year.
Apple has stopped sales of its Series 9 and Ultra 2 smartwatches in the United States since last week, although the watches remain available at other retailers, including Amazon (NASDAQ:). Best Buy (NYSE and Walmart (NYSE as of Tuesday.
The ban does not affect the Apple Watch SE, a less expensive model, which will continue to be sold. Previously sold watches will not be affected by the ban.
A jury trial over Masimo's allegations in federal court in California ended in a mistrial in May. Apple has separately sued Masimo for patent infringement in federal court in Delaware and has called Masimo's legal actions a “move to clear the way” for its own competing smartwatch.
A presidential administration has not vetoed an ITC ruling since 2013, when President Barack Obama's administration overturned an import ban on Apple iPhones and iPads in the company's patent dispute with Samsung (KS:).
In February, the Biden administration decided not to veto a separate import ban on Apple Watches based on a patent infringement complaint filed by medical technology company AliveCor. The ITC has suspended the ban for other reasons.
Apple's wearables, home and accessories business, which includes the Apple Watch, AirPods headphones and other products, generated $8.28 billion in revenue during the third quarter of 2023, according to a company report.
