Overview

• The International Trade Commission (ITC) ruled that Apple Watch imports should be halted, siding with medical devices maker Masimo that Apple infringed on two of its patents related to a pulse oximeter. The ban will go into effect on December 25 and includes a cease-and-desist order that stops sales of infringing products already in the country.
• Masimo's CEO, Joe Kiani, hopes the ITC decision will encourage Apple towards a settlement. He stated Masimo’s technology either needs to be incorporated into the Apple Watch, or he would work with Apple to improve its current product to a point where Masimo’s reputation could back it.
• The ruling doesn't immediately affect Apple Watch sales. The imports ban is now subject to a 60-day presidential review. Apple plans to appeal the decision, highlighting that it can continue Apple Watch sales during this review period.
• This ruling is significant because this is not something Apple can ignore or disregard, and it puts Masimo in a stronger position. One of Apple’s previous tactics - trying to convince the Patent Trial and Appeal Board to invalidate Masimo’s patents - has already failed.
• Apart from the potential settlement, Apple could also disable the pulse oximetry function or create a redesign that doesn’t infringe on Masimo’s patents. However, analysts believe a settlement agreement is the most likely outcome, citing that redesigning the hardware would be extremely time-consuming.