Apple Inc. has to stop selling its Series 9 and Ultra 2 smartwatches with a blood oxygen feature in the US, suffering another legal setback in its patent dispute with Masimo Corp.
The US Court of Appeals for the Federal Circuit declined Wednesday to grant Apple a longer pause on an import ban of the devices imposed by the US International Trade Commission. The ruling means the company has to stop selling the watches with the oxygen measurement feature while an appeal of the ban plays out — a period that Apple believes could last a year or more.
The decision means Apple will probably have to turn to its backup plan: selling watches without the blood oxygen tool that was found to violate Masimo patents. Apple has developed a software workaround to the ban that eliminates the function from its devices. Last week, the US Customs and Border Protection agency approved redesigned versions of the watches that didn’t have the oxygen reader.
Masimo shares jumped as much as 2.8% following the decision, touching the highest intraday level in more than five months.
The court battle has threatened one of Apple’s biggest moneymakers in its home market, an unprecedented situation for the tech giant. The watches are a central piece of the company’s wearables, home and accessories division, a business that generated more than 10% of revenue last year, or nearly $40 billion.
The ITC ruled in October that Apple’s latest watches violate patents related to blood oxygen measurement. That led Apple to pause sales of the smartwatches just ahead of Christmas, though an interim stay allowed the company to bring the products back late last month.
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