UPDATED Nov. 20, 2015, with comment from Mindray.
The settlement ends a bevy of legal proceedings in the U.S. and China, where Mindray is based. Masimo 1st sued Mindray in December 2012 in a California federal court, alleging patent infringement and breach of contract; Mindray counter-sued the following year, asserting its own infringement, anti-trust and tortious interference claims. A trial in that case was slated for Dec. 8, according to a regulatory filing.
The Irvine, Calif.-based patient monitoring company sued Mindray again in December 2013, this time in a New Jersey state court, alleging breach of contract; Mindray’s counter-suit alleged patent infringement and anti-trust violations. That case, which was removed to the New Jersey federal court, was pending when the companies buried the hatchet this week.
In China, Mindray sued Masimo in March 2013, alleging anti-trust violations, and filed separate patent infringement case there a months later; those cases were also pending when the deal was struck, according to the filing.
Masimo said the Nov. 16 deal settles all of the lawsuits. Mindray paid $7 million Nov. 16 and agreed to pony up another $18 million no later than Jan. 15, 2016. Mindray must dismiss its cases by tomorrow, while Masimo has 5 days after receiving the 2nd installment to dismiss its suits.
The deal also requires Mindray to buy some Masimo products and assign some patents to Masimo, and includes promises not to sue for patent infringement, Masimo said.
Mindray said Nov. 20 that the settlement calls for it to buy Masimo’s pulse oximetry components through 2017 for Mindray devices sold in the U.S. and Canada, noting that Masimo is already its primary supplier in the U.S. The patents assigned to Masimo cover areas not practiced in Mindray products, the Chinese company said.
The settlement is not expected to have a material effect on its books, Mindray said, and should result in a $15.3 million charge during the 4th quarter (on top of a $9.7 million charge from 2012).