Medical Device Link.

Originally Published MX November/December 2005

BUSINESS NEWS

A long-standing patent dispute between Tyco Healthcare's Nellcor division (Pleasanton, CA) and Masimo Corp. (Irvine, CA) was finally resolved in September. The U.S. Court of Appeals for the Federal Circuit upheld an earlier ruling by the Federal District Court in Los Angeles that Nellcor had violated two of Masimo's patents. The appeals court also reinstated a verdict that found Nellcor had infringed on a third Masimo patent.

The dispute revolved around the signal-processing technology used in pulse oximetry monitoring devices. Pulse oximetry is used in medical devices and instrumentation to measure a patient's oxygen saturation level and pulse rate.

The patent dispute between the two companies dates back to 1999, and both sides have won a number of court victories over the years. This latest ruling by the appeals court, which called for a permanent injunction against all Nellcor products that infringe upon Masimo's patents, finally brings the matter to a close. The judgment for Masimo includes an award of more than $164 million. That figure is based on an initial jury verdict in 2003 of $134 million plus additional damages that have accrued while a permanent injunction was not in place.

Kiani

Commenting on the appeals court decision, Joe E. Kiani, founder and CEO of Masimo, said, "We are grateful for the laws and the courts that have helped us protect our inventions. Masimo made a significant contribution to patient care and safety with its innovations. If others were permitted to profit from such breakthroughs and inventions, future innovation and ultimately patient care would suffer."

Tyco Nellcor, a business unit of Tyco International Ltd. (Pembroke, Bermuda), acknowledged the court's ruling and the upcoming permanent injunction in a letter to its customers. David Sell, president, said, "While the decision is disappointing, we have prepared for this possible outcome and assure you that our ability to support your pulse oximetry needs will continue." The court-ordered injunction would only affect "future sales of certain products," said Sell, and he added that Tyco Nellcor will soon introduce a new line of handheld and bedside pulse-oximetry products and compatible patient monitors that use an entirely different signal-processing technology.

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