raditya/iStock Editorial via Getty Images
Masimo (NASDAQ:MASI) on Friday pared earlier gains of as much as 7% and rose 2% after winning a ban on importing some Apple Watches in its patent fight with the tech behemoth.
Masimo (MASI) shares originally surged in after hours trading on Thursday after the International Trade Commission granted a limited exclusion order and a cease-and-desist order against Apple (NASDAQ:AAPL). Apple will now be prohibited from importing certain Apple Watch models in the U.S. after the ITC judgment, though the Biden administration has 60-day to decide if it will overturn the ban before it’s implemented.
Apple (AAPL) said on Thursday that it plans to appeal the ITC decision.
If an appeal is filed, it’s likely that there will be a stay of the exclusion order during the appeals process,” Needham analyst Mike Matson, who has a buy rating and $136 price target on Masimo (MASI) wrote in a note on Friday.
If MASI is “ultimately successful,” Apple (AAPL) may be forced to pay royalties if it can’t change the Apple Watch to avoid infringement. The royalties may be $1-$2 per Apple Watch, which could total $50m-$100m of annual revenue or 65c-$1.30 of EPS based on annual sale of 50 million Apple Watch units.
“But this could take considerable time if Apple pursues an appeal,” Matson added.
Medical technology company Masimo (MASI) first filed a complaint with the ITC seeking an Apple Watch import halt, alleging patent infringement in June 2021.
The victory for Masimo (MASI) comes after a judge declared a mistrial in trade secrets trial against Apple (AAPL) over the Apple Watch in early May. U.S. District Judge James Selna declared a mistrial after a jury failed to reached a unanimous decision.
Image and article originally from seekingalpha.com. Read the original article here.