A Diagnostics & Imaging Week

A U.S. appeals court in Los Angeles has upheld a $164.2 million verdict against Nellcor (Pleasanton, California), a business unit of Tyco International (Pembroke, Bermuda), in a lawsuit filed by rival Masimo (Irvine, California) concerning oximetry testing technology used to measure the oxygen content of blood.

Masimo issued a statement saying that the court upheld a ruling that Nellcor infringes two Masimo patents, and it reinstated a jury verdict that Nellcor infringes a third Masimo patent. The products found to infringe are Nellcor’s O4 (Oxismart XL), O5 and O5ci (Oximax) technologies, Masimo said in a statement yesterday.

“Oxismart XL and Oximax technologies are found in certain Nellcor pulse oximetry products, such as the N-595, N-395, N-550 and NPB40 pulse oximeters, as well as technology offered through OEM patient monitoring companies, such as the MP404, MP505, MP506, and MP100,” Masimo said.

Further, the court instructed that a permanent injunction be entered against Nellcor’s products found to infringe the Masimo patents.

The dispute is one in a long series of legal battles between the two companies over oximetry technology.

A different jury ruled that Tyco must pay $420 million to closely held Masimo for antitrust violations in its marketing of the devices. Masimo had claimed that Nellcor’s contracts with hospital group purchasing organizations (GPOs) and other contracting practices limited the amount of pulse oximetry sales that it could achieve in the marketplace. Nellcor maintained that such contracting practices were widely used in the healthcare industry in order to produce lower prices for participating hospitals, but that defense was rejected.

Joe Kiani, founder and CEO of Masimo, said of the new verdict: “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. We are very happy that the appellate court has issued this important decision.”

Masimo bills itself as the inventor and leader of Signal Extraction Technology for the non-invasive monitoring of vital signs. It calls its Masimo SET system “the standard of care for pulse oximeters.”

In other legalities:

• Nichols Institute Diagnostics (NID; San Clemente, California), a manufacturer of diagnostic test kits and systems, reported that the U.S. District Court for the Southern District of California reversed part of a jury verdict and ruled in favor of NID in its patent infringement case against Scantibodies Clinical Laboratory and Scantibodies Laboratory (both Santee, California).

NID said it holds a license to a patent on an assay for measuring bioactive parathyroid hormone (PTH), and it claims that Scantibodies infringed the patent. A jury ruled that Scantibodies’ assay infringes NID’s patent, but also found that certain claims of the patent were not valid. NID asked the court to set aside portions of the jury’s verdict that were unfavorable to NID.

In a decision by a U.S. District Court judge on Aug. 30, the court found that portions of the jury’s verdict were not supported by substantial evidence and overturned the jury verdict against NID, ruling instead that NID’s patent is valid. In addition, the court let stand the jury’s determination that Scantibodies’ PTH assays infringe the patent.

NID, a subsidiary of Quest Diagnostics (Lyndhurst, New Jersey), makes immunoassay systems using direct label chemiluminescence and immunoradiometric technology, reported its kits are used in more than 35 countries.

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