Masimo wins $467m verdict in patent spat with Philips

October 2, 2014 By Alex Soule Leave a Comment

Masimo (NSDQ:MASI) yesterday won a $467 million patent infringement verdict over Royal Philips (NYSE:PHG) in a long-standing battle over pulse oximetry technology.

Although Philips stipulated that it did infringe the patents, it argued that the infringement was moot because the patents are invalid. The jury disagreed, denying Philips’ claim that 2 Masimo patents are invalid and finding that Masimo did not infringe a 3rd Philips patent.

Masimo sued Philips in 2009 in the U.S. District Court for Delaware; Philips filed a counter-claim later that year. The companies are also litigating a 2nd infringement case brought by Masimo, which is also being heard in Delaware under Judge Leonard Stark.

After 13 years of denials, Philips suddenly admitted to the infringement just before a pretrial conference in August, Masimo lawyer Joseph Re of Knobbe Martens Olson & Bear told Law360.

"We’re so pleased that the jury saw just how valuable this technology has been to improve patient health care," Re said. "This type of case is exactly what the patent system was designed to accomplish: Protect real innovation."

Philips vowed to appeal the verdict.

"We are very disappointed in the verdict of the jury and surprised by the magnitude of the proposed award," CEO Frans van Houten said in prepared remarks. "Philips intends to pursue all avenues of appeal of this verdict at both the district and appellate courts in the U.S."

If sustained, the verdict would be the 3rd-largest returned by a jury this year, according to Bloomberg.

The news pushed MASI shares up 13% in after-hours trading yesterday, to just over $24 apiece, their highest level since early August. The stock opened today at $24 per share but subsided to $22.46 per share as of about 10:20 a.m. Eastern, down 6.5%; PHG shares were trading at $30.73, down 0.9%.

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