Quiver Quantitative - Apple (NASDAQ:AAPL) has secured a temporary reprieve from a U.S. sales ban on its latest smartwatches, including the Apple Watch Series 9 and Ultra 2, thanks to a recent court ruling. This development comes in the midst of Apple's ongoing patent infringement dispute with medical device maker Masimo (NASDAQ:MASI). The U.S. International Trade Commission (ITC) had earlier ruled in favor of Masimo, resulting in Apple halting sales of these smartwatches, which are a significant part of its estimated $17 billion business. However, the Washington appellate court has now issued an interim stay, allowing Apple to potentially resume sales until the ITC responds by January 10th.
The controversy began when the ITC found Apple had infringed patents related to blood-oxygen saturation measurement technology, prompting Apple to remove the affected smartwatches from its website and stores. In response, Apple has developed a software update that it believes addresses the infringement issue. The update's design is currently under review by the U.S. customs agency, with a decision expected by January 12th.
Market Overview: -An appeals court grants Apple a temporary stay on the US Apple Watch sales ban. -Masimo shares dip despite legal victories, while Apple remains steady. -Software update awaiting US customs approval adds another layer to the saga.
Key Points: -Apple wins a reprieve until Jan. 10 to respond to the trade commission's ruling. -Court decision potentially allows resumption of sales, halted due to alleged patent infringement. -Blood-oxygen feature in Series 9 and Ultra 2 led to import and sale ban. -Masimo, the patent holder, remains opposed to the stay and seeks appeal intervention.
Looking Ahead: -US customs' decision on Apple's software fix on Jan. 12 crucial for resuming sales. -White House may still intervene and veto the ban despite declining to do so initially. -Masimo's continued legal challenge presents ongoing hurdles for Apple's smartwatch business.
While Masimo declined to comment on the latest court ruling, its shares experienced a decline following the news. Meanwhile, Apple's stock remained relatively stable. The ITC had previously argued that the interim stay of its order wasn’t necessary as Apple continued to sell other watch models that didn't include the disputed feature.
This legal battle has implications not only for Apple’s sales but also for its customers, particularly those owning out-of-warranty Apple Watch Series 6, 7, and 8 models. These models also include the contested blood-oxygen feature and were not eligible for hardware repairs during the ban. As the situation unfolds, Apple aims to overturn the ITC’s decision and fully reinstate its smartwatch lineup in the U.S. market.
This article was originally published on Quiver Quantitative