In a blow to Apple, the International Trade Commission (ITC) has rejected the company's bid to lift a sales halt on two higher-end models of the Apple Watch. The ITC had previously ordered the sales halt in October due to a patent dispute with medical technology company Masimo over the use of specific technologies in the Series 9 and Ultra 2 watches, specifically related to the blood-oxygen measurement system. Apple had complied with the ruling by cutting off online sales of the watches in the U.S. just days before Christmas. However, a federal court has now temporarily lifted the sales halt, allowing Apple to resume sales of the two watch models pending its decision on whether to also permit sales as it considers Apple's appeal.

As of Wednesday afternoon, the two Apple Watch models in question were not available on Apple's online store. This recent patent dispute is not the first roadblock the Apple Watch has faced in its journey to become a health-management device. Last year, the ITC ruled that Apple had infringed on the wearable EKG technology of AliveCor, a decision that the Biden administration declined to overturn. However, this dispute did not directly impact Apple Watch sales as another regulatory body had ruled that AliveCor's technology is not patentable. The legal battle over this issue is still ongoing.

The ongoing patent disputes surrounding the Apple Watch's medical technology features are leading some analysts to believe that Apple may need to start considering licensing deals or acquiring startups specializing in the field. Wedbush Securities analyst Dan Ives predicts that these patent headaches could result in Apple's holiday-season sales being reduced by $300 million to $400 million if the two watch models are pulled from the U.S. market during the final week of the year.

With the ITC's rejection of Apple's bid to lift the sales halt, the company will proceed with its plan to stop selling the Apple Watch Series 9 and Ultra 2 in the U.S. Online sales of these models will cease on Thursday at 3 p.m. EST, and the devices will be removed from store shelves on Sunday. However, the less sophisticated Apple Watch will still be available for purchase in the U.S. after Christmas Eve. It remains to be seen whether the Biden administration will intervene and overturn the ITC's ruling before the holiday season concludes.