Unsealed Apple Ruling Reveals Why Watch Was Initially Banned

Apple Inc. failed in its bid to convince a US trade agency that it faced “unquantifiable harm” if barred from importing certain Apple Watch models because the company “presented no evidence” supporting its claims, according an opinion unsealed on Thursday.

The Cupertino, Calif.-based tech giant provided the US International Trade Commission nothing “supporting the nature or extent of any alleged harm it faces from a denial of a stay of the remedial orders, which affect just a portion of one product line in Apple’s large suite of product and service offerings,” according to the ruling, issued Dec. 20 under seal.

Apple last week resumed sales of its Apple Watch Series 9 and Ultra 2 after winning a temporary reprieve from the US Court of Appeals for the Federal Circuit, two months after the ITC ruled the smartwatches infringed patents held by medical-device maker Masimo Corp., and one day after the devices’ US sales were halted.

The Federal Circuit’s interim stay on the ITC’s enforcement remains intact until the appeals court issues its decision on whether to block enforcement for the duration of Apple’s appeal—the same request rejected by the ITC in its unsealed opinion.

The Commission concluded in the ruling that Apple hadn’t offered any “admittedly difficult legal questions” that would warrant a stay. It agreed with Masimo that “Apple’s alleged irreparable injuries are ‘pure attorney argument supported by no evidence.’”

Apple didn’t immediately respond to a request for comment on the reason for the ITC’s decision.

The ITC also found that Masimo “would suffer some harm by granting the stay,” by denying the patents their full term of protection. The Commission noted that Masimo hadn’t contested “Apple’s assertion that Masimo is not selling its W1 Watch in the United States in any meaningful quantity and also does not intend to widely market that product in the United States, opting instead to market a different, not yet released product” in the US.

Masimo thus “would not appear to miss out on substantial revenue in the event of a stay,” the opinion said. The Commission also said Masimo’s “parallel pending district court proceeding provides a forum” for it to try to secure monetary damages for infringement.

The ITC wasn’t moved by Apple’s “vague reference to a ‘detrimental impact on the healthcare field’” and found that the public interest doesn’t support a stay pending appeal. The public interest “in fact counsels against granting a stay” because, as Masimo contended, “Apple’s arguments have already been considered and rejected by the Commission” in its late-October final determination.

Winning the brief stay fulfilled one part of Apple’s multi-pronged approach to recover from the ITC’s decision. Apple’s plans for a comprehensive solution to the patent fight also include redeveloped software now submitted to a US customs agency that could allow it to sell noninfringing versions of the devices as soon as Jan. 12, all while continuing to appeal the ITC loss. The exclusion order enforcement branch of the US Customs and Border Protection heard Apple’s supporting arguments Dec. 28. Records of the hearing have not been made public.

The Federal Circuit gave the ITC until Jan. 10 to respond to Apple’s request for a stay that would last for the duration of the company’s appeal.

The ITC issued its opinion under seal during a whirlwind week before its imports ban was to become effective at the culmination of the holiday shopping season. Apple filed the request Oct. 30.

The case is In re: Certain Light-Based Physiological Measurement Devices, USITC, Inv. No. 337-TA-1276, opinion unsealed 1/3/24.