The American technology company Apple received a heavy blow a few days before Christmas Day – in a patent dispute, it was forced to decide not to sell imported smartwatches Series 9 and Ultra 2 in the domestic market. and which Masimo complained about.
The decision sparked feverish activity at Apple’s headquarters in Cupertino, California, at the end of which there should be nothing less than saving part of the business worth up to $17 billion, Bloomberg wrote.
Engineers work on software modifications and presentation of data to customers. They apparently hope that such changes will be enough for the International Trade Commission, which ruled in favor of Masi in a patent dispute in October.
But with just a few days left until the court’s decision, the company prefers to stop selling the watch on its website on Thursday, Dec. 21, and pull it from its roughly 270 brick-and-mortar stores by Dec. 24. He has already sent new signs to them that promote the Apple Watch without showing photos of the banned models.
According to Evan Zimmerman, co-founder and CEO of Edge, which makes patent drafting software, disputes like this are usually settled before they get to that point.
“These types of disputes that lead to import restrictions are rare and are often used as leverage in settlement negotiations,” he said. Because of the breadth of Masimo’s patents, it may be a challenge for Apple to resolve the dispute through software modifications, Zimmerman said. But he conceded that Apple could make a credible case that the software controls how the device works. In that case, adjustments might be enough.
Masimo, unsurprisingly, doesn’t think so. In a statement, it said the decision to ban Apple Watch models “shows that even the most powerful company in the world must obey the law.” “Hardware needs to be changed,” the medical device maker said, adding that a software fix would be an insufficient measure.
The patents at the heart of the dispute mostly relate to hardware, including a method of sending light into the skin to measure the amount of oxygen in a person’s blood, Bloomberg reported.
Weeks, but rather months of work
The actual introduction of a new technology to the market can thus require quite a bit of time – even if it is “just” adjusting the ones and zeros. Apple’s internal software testing process is lengthy for good reason. The company must ensure that any changes fulfill medical purposes and at the same time do not violate other functions of the smart watch.
According to one person familiar with the company’s operations, should Apple need to remove hardware from its devices, it could take at least three months to manufacture and ship the new models.
Blood oxygen measurement functionality was first added to the Apple Watch in 2020 with the Series 6. At the time, the coronavirus pandemic was raging and some doctors were using blood oxygen levels to assess the impact of the virus on patients’ ability to breathe. The feature monitors a person’s oxygen level throughout the day. The user can also get a current reading, which takes about 15 seconds and should be between 95 and 100 percent.
This feature was also included in the Apple Watch Series 7 and Series 8. Apple stopped selling the Series 7 after the launch of the new models, but the Series 8 continues to be available as a refurbished device. If the ban goes into effect, that sale will also have to be stopped, according to Bloomberg.
Apple often emphasizes health and safety features when selling its smartwatches, and customers are listening, these features have driven sales up in recent years. Analysts estimate it will bring in $16.9 billion in revenue for Apple in fiscal 2023, up significantly from $9.1 billion a year five years ago.
It’s only a fraction of the $200 billion generated by the iPhone, but the watch, among other things, helps keep people in the Apple ecosystem.
A deal is unlikely
Apple could try to reach an agreement with Masimo, but that’s not a route Cupertino executives like to take. And even in this case there is no indication that they would make an exception. An Apple spokeswoman said the company is working to submit a solution to US Customs, which is responsible for approving changes to return a product to the market.
Additionally, the ban only applies to Apple’s direct sales channels, so third-party retailers such as Walmart, Best Buy, and Target can continue to offer the device. Walmart and Best Buy said Monday they have no plans to end the sale.
The decision can still be reversed by the White House, it has until December 25. The review is being handled by U.S. Trade Representative Katherine Tai, who is considering all factors in the dispute, according to an unnamed source cited by Bloomberg.
The Obama administration backed Apple in 2013 when it threatened to ban iPhone sales in the US. However, this decision arose out of a patent dispute between the American Apple and the South Korean company Samsung Electronics. While Masimo is based in Irvine, California, which means the government would have to prioritize one American company over the other.