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Apple on Monday announced it would pause sales of the Series 9 and Ultra 2 smartwatches in the U.S. starting this week while it deals with a patent dispute involving the smartwatches’ blood oxygen sensor.

Apple’s decision comes after the U.S. International Trade Commission (ITC) ruled in October that it could block the company from importing Apple Watches after it found the devices violate patent rights belonging to Masimo, a medical technology company.

The decision is under review by President Joe Biden’s administration until Dec. 25, but Apple said it is preemptively taking steps toward compliance if the ruling ultimately stands.

Apple said it would pause sales of the Series 9 and Ultra 2 smartwatches on its website starting on Dec. 21, while the company’s retail locations would stop selling those watches after Dec. 24. Versions of the Apple Watch that don’t contain the blood oxygen sensor are unaffected by the patent dispute.

APPLE WATCH FACES POTENTIAL IMPORT BAN OVER PATENT DISPUTE WITH MASIMO

Apple has argued that the ITC’s finding that its smartwatches blood oxygen sensors violated Masimo’s patent rights was erroneous, saying it should be reversed and that it plan to appeal the decision to the Federal Circuit Court of Appeals.

Masimo has also accused Apple of hiring away its employees, as well as stealing its pulse oximetry technology and incorporating it into the Apple Watch.

Ticker Security Last Change Change %
AAPL APPLE INC. 195.89 -1.68 -0.85%
MASI MASIMO CORP. 115.22 +3.53 +3.16%

A jury trial regarding Masimo’s allegations in a California federal court ended with a mistrial in May. Apply has separately sued Masimo for patent infringement in a Delaware federal court and has called Masimo’s legal actions a “maneuver to clear a path” for its own competing smartwatch.

BIDEN ADMIN DECLINES TO OVERRULE TRADE COURT’S IMPORT BAN ON APPLE WATCH

Apple Watch

The last time a president vetoed an ITC ruling was in 2013 when President Barack Obama’s administration overturned an import ban on Apple’s iPhones and iPads that arose due to a patent dispute with Samsung.

In February 2023, the Biden administration opted against vetoing a separate import ban on Apple Watches based on a patent infringement complaint from medical technology firm AliveCor. The ITC placed the ban on hold for other reasons.

Apple’s wearables, home and accessory business — which includes products like the Apple Watch and AirPods — brought in $8.28 billion in revenue during the third quarter of 2023.

APPLE AND FINTIV TO NEGOTIATE POTENTIAL SETTLEMENT OF PATENT INFRINGEMENT CLAIMS FOR APPLE PAY, APPLE WALLET

Tim Cook holding an iPhone

Reuters reported that Ryan Reith, program vice president for research firm IDC’s mobile device tracking initiative, said holiday season sales of Apple Watches won’t suffer as a result of the ban and that the full impact of the ruling, if it’s allowed to stand, won’t come until January and February of 2024.

“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.”

Apple’s shares were down about 0.76% in early afternoon trading on the news after being down 1.4% earlier in Monday’s trading.

Reuters contributed to this report.

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