Apple Inc is making plans to eliminate the blood-oxygen feature from its newest smartwatches, the Series 9 and Ultra 2, in order to avoid a US ban of the devices if an appeal of the decision fails. This decision was revealed by Masimo Corp on Monday, as the company stated that the US Customs and Border Protection approved the move on Jan 12.
The agency ruled that Apple’s redesign falls outside the scope of the import ban by the US International Trade Commission, signaling that the adjustment will allow Apple to keep its watches on the market. This comes after the ITC ruled in October that Apple’s devices violated Masimo patents related to blood-oxygen measurement, leading to a pause in sales just ahead of Christmas. However, an interim stay allowed the company to resume sales late last month.
Apple developed a software workaround to sidestep the dispute and presented it last week to the customs agency. The redesigned watches “definitively” do not contain the technology at issue, known as pulse oximetry, according to Masimo. This move would likely only take place if Apple fails to win a longer stay from a federal appeals court. The company expects the US Court of Appeals for the Federal Circuit to rule on its motion for a stay for the entire appeal period as early as Tuesday.
Until then, the Apple Watch blood-oxygen feature continues to be available on newly sold units, according to Apple. “Apple’s claim that its redesigned watch does not contain pulse oximetry is a positive step toward accountability,” Masimo said. “It is especially important that one of the world’s largest and most powerful companies respects the intellectual property rights of smaller companies and complies with ITC orders when it is caught infringing.”
Removing the technology from the Apple Watch would be a significant move. The company’s engineers have been working on a software update that changes the blood-oxygen app and its algorithms in a way that might circumvent the issue without losing the feature. However, eliminating the capability would likely be the quickest way to avoid seeing the ban reimposed, which could have occurred as early as this month.
“Apple may have paid a steep price to get around a US import ban,” Bloomberg Intelligence analyst Tamlin Bason said in a note. “That was a highly touted feature.” Though addressing the immediate risk of a ban is positive, the move “could dent customer demand,” Bason said.
Apple’s operations team has already begun shipping modified Series 9 and Ultra 2 watches to retail locations in the US, likely in case the appeal fails this week. The stores were told not to open or sell the tweaked devices until they receive approval from Apple’s corporate offices. It’s possible that those models are the new versions without the blood-oxygen feature.
Separately, a federal appeals court is expected to hear an Apple motion as early as this week for a continued stay on the ban. The prohibition was overturned on an emergency basis while Apple waits for a hearing. Last week, the ITC urged an appeals court to reject “weak and unconvincing” arguments supporting a bid to block the trade agency’s enforcement of the ban. – Bloomberg
