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In a groundbreaking decision, the U.S. International Trade Commission (USITC) has imposed an Apple watch ban. It impacts smartwatches in the United States, alleging the tech giant's violation of a patent-related to biomarker technology.

The ruling, which came after a complaint by medical tech company Masimo, has far-reaching implications for Apple's lucrative smartwatch business.

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The USITC Ruling

The USITC issued a limited exclusion order in October against Apple, responding to a patent infringement complaint lodged by Masimo. The order demanded that Apple "cease-and-desist" from importing and selling its Apple Watches equipped with pulse oximetry functionality, a move that could have significant consequences for the company's revenue.

Masimo filed its complaint in 2021, accusing Apple of utilizing its medical innovation without authorization for the development of its Apple Watches. The dispute centers around the technology used to run the blood oxygen feature in Apple's smartwatches.

Apple Watch Ban

The ban, currently under review by President Biden, could have lasting effects on Apple's sales. The President has until December 25 to decide whether to allow or veto the ban. In anticipation of the ruling, Apple has decided to halt sales of its Apple Watch Series 9 and Ultra 2 online from December 21 and in retail stores from December 24.

Experts predict a substantial revenue loss for Apple, estimating it to be at least $200 million, particularly during a peak sales period. The ban comes at a time of legal dispute over the technology used in Apple's smartwatches, creating uncertainty about the company's future in the wearables market.

Masimo's Victory

Masimo, a California-based biotech company, welcomed the USITC's decision as a validation of its intellectual property rights. The company's spokesperson emphasized the importance of respecting the ITC's expert judgment and maintaining public trust in the U.S. patent system.

Masimo, founded by Joe Kiani in 1989, accused Apple of entering partnership discussions in 2013, only to allegedly steal the startup's idea and hire some of its engineers.

 The company, valued at $6.69 billion, pioneered sensor technology for monitoring blood oxygen saturation, holding thousands of patents.

Legal Battle and Financial Impact

Masimo sued Apple in federal court in 2020 and again in 2021 after the release of the Apple Watch Series 6, the first model featuring the blood oxygen feature. Kiani, Masimo's founder, reportedly spent $60 million in legal battles against Apple.

 The ITC's ruling, issued in October, initiated a 60-day Presidential Review Period, which concludes on December 25.

Apple, strongly disagreeing with the order, is taking preemptive measures by halting sales while pursuing legal and technical options to challenge the ban. 

The company's web store will continue selling the affected models until December 21, 2023, while Apple Store locations can do so until December 24.

 Apple retains the option to appeal the ITC's final decision with the U.S. Court of Appeals for the Federal Circuit, with the Masimo patents set to expire in August 2028.