Apple's unexpected major victory! The US Court of Appeals temporarily suspends the ban on Apple Watch.

Apple's latest smartwatch was officially banned for only one day and unexpectedly achieved victory.

On Wednesday, an appeals court in Washington, D.C. suspended the import ban on certain Apple smartwatches imposed by the U.S. International Trade Commission (ITC). At the same time, Apple is appealing the ITC's ban and requesting an extension of the suspension period during the appeal.

The court has given the ITC until January 10th to respond to Apple's request for an extension of the suspension period. Previously, the ITC opposed the suspension of the ban, stating that Apple did not face "irreparable harm" during the appeal period because it still had some watch models available for sale.

Masimo, the holder of the blood oxygen detection patent and a medical technology company, which is another key player in this Apple patent infringement case, also sought to intervene in the appeal. In a filing on Tuesday, Masimo stated that Apple's request to suspend the ban should be denied because there is no emergency situation. "Apple misled the court."

As a result of the above news, Masimo's stock price fell 6.1% intraday, while Apple's decline narrowed to 0.57%.

In October of this year, the ITC found that Apple infringed on Masimo's patent, violated U.S. trade laws, and issued a limited exclusion order on certain Apple smartwatches, prohibiting their importation into the United States. The Biden administration has 60 days to overturn the ITC's decision. On Tuesday, the U.S. White House refused to overturn the Apple patent infringement ruling, which means that the sales ban on Apple smartwatches in the United States is officially in effect.

In a statement on Tuesday, Apple strongly opposed the ITC's decision and the resulting import ban, and announced that it would file a lawsuit against the ITC's ruling with the U.S. Federal Circuit Court of Appeals. In the court filing, Apple stated that if the ban continues to be implemented, the company will suffer "irreparable harm" because its two most popular smartwatch models are banned. Apple also submitted an emergency motion seeking a temporary lifting of the sales ban on the two watches during the court's consideration of its appeal.

Dan Ives, an analyst at Wedbush Securities, commented on the latest developments in the Apple case:

Given the legal issues involved in this patent battle, the suspension of the ban on Wednesday is a surprising and significant victory for Apple. Masimo is now facing a fierce battle. We expect the appeal case in January to be a crucial moment.

New Developments in Apple's Smartwatch Business

Last week, Apple announced that it will stop selling its latest versions of smartwatches, the Apple Watch Series 9 and Ultra 2 models, in the United States this month. The ban applies to sales on the Apple website, Apple's physical retail stores, and imports into the United States. The latest court ruling on Wednesday will allow Apple to temporarily resume the aforementioned sales.

Analysts expect that the business scale of Apple's smartwatch in the 2023 fiscal year will be approximately $17 billion. Health and safety features are important selling points of Apple Watch and are the core drivers of growth in this category. Although the business scale of smartwatches is far smaller than that of iPhones, it helps to keep people locked into Apple's ecosystem.

Apple has also made software updates to the smartwatch, which is expected to alleviate the patent dispute. Apple has submitted the updated design to the U.S. Customs and Border Protection and stated that the government plans to decide whether to approve or reject the updates on January 12th.

However, a previous article on the Wall Street CN website pointed out that internal work at Apple suggests that the company believes making changes in software, rather than more complex hardware modifications, is enough to bring the Apple Watch back to the market. However, the fact is that the core of Apple's dispute with Masimo is mainly related to hardware, including how to emit light into the skin to measure the oxygen content in human blood.