Apple Seeks Permission to Resume Sales of Popular Watches Amid Patent Dispute

In a desperate move to salvage holiday sales, Apple has filed an emergency motion seeking court approval to resume selling two of its most popular watches. The tech giant had cut off sales right before the Christmas holiday due to an ongoing patent dispute, which it is now appealing. Apple argues that it will suffer "irreparable harm" if the court orders remain in place for the two weeks it will take for the U.S. International Trade Commission (ITC) to respond to its appeal.

The disruption caused by the sales suspension is estimated to cost Apple approximately $300-400 million in holiday-season sales, according to Wedbush Securities analyst Dan Ives. However, this amount is relatively small for Apple, considering industry analysts are still projecting the company to generate nearly $120 billion in sales this quarter, including the crucial holiday shopping season.

The patent dispute began on October 26 when the ITC ruled that Apple had infringed on two patents owned by U.S. companies Masimo Corp. and Cercacor Laboratories. After a 60-day review, the ITC's decision became final on Tuesday. However, Apple had already pulled the watches from store shelves and removed them from its online sales lineup.

On Tuesday, the United States Trade Representative, Katherine Tai, decided not to reverse the ITC's determination, allowing the decision to officially go into effect. This means that if Apple's appeal is unsuccessful, the sales ban will remain in place.

The affected models, Apple Watch Series 9 and Ultra 2, were equipped with a blood oxygen measurement feature, which was the basis of the patent dispute. The ITC had previously blocked Apple from using some of the underlying technology for this feature. However, previously purchased Apple Watches with the blood oxygen measurement feature are not affected by the ITC order.

Apple argues that the ITC's decision is flawed and based on factual errors. The company claims that Masimo does not sell a competing product in the U.S. in significant quantities and would not suffer any harm if the order is stayed.

Shares of Apple Inc. have only experienced a slight decline amid the news, despite the tech sector performing strongly on Tuesday.

The sales suspension of the two affected models is significant for Apple, as it comes during the crucial holiday shopping season. However, the company remains optimistic and has pledged to "take all measures" to resume sales as soon as possible if the ITC's sales ban is not overturned.

This is not the first patent roadblock Apple has encountered concerning its Apple Watch. Last year, the ITC ruled that Apple had infringed on the wearable EKG technology of AliveCor. The Biden administration chose not to overturn this decision, although it has not directly affected Apple Watch sales due to another regulatory body ruling that AliveCor's technology is not patentable. The ongoing legal battle in that case suggests that Apple may need to consider licensing deals or acquiring startups specializing in the medical technology field to avoid future patent disputes.

Overall, Apple is facing significant challenges as it expands the health-management capabilities of its watches. While the sales suspension is a setback, the company remains resilient and determined to find a resolution to continue offering its popular watch models to consumers.