Philips slapped with $466M verdict in Masimo patent battle

Philips CEO Frans van Houten

Philips ($PHG) was slapped with a $466 million verdict in its patent infringement battle with Masimo over technology used for its pulse oximeter devices, casting a pall over the company's recent restructuring and product development efforts.

A jury in Wilmington, DE, found after a two-week trial that Philips infringed on Masimo's two patents for technology used in fingertip devices that measure blood oxygen and pulse rates using light absorption, Bloomberg reports. Philips claimed that the patents were invalid because they weren't properly written and that the technology is obvious, but a panel of eight jurors disagreed and ordered the Amsterdam-based company to pay damages. Philips said Thursday that it intends to appeal the verdict, according to Reuters

"We are very disappointed in the verdict of the jury and surprised by the magnitude of the proposed award," Philips CEO Frans van Houten told the news outlet. 

The court proceedings date back to 2009, when Masimo sued an Andover, MA-based subdivision of Philips for allegedly importing the oximeter products in violation of two of its U.S. patents. Masimo originally sought $650 million in damages. Neither Masimo nor Philips immediately responded to requests for comment on the recent verdict, according to the Bloomberg story.

The news comes on the heels of companywide restructuring, as Philips in September announced that it would split into two companies: HealthTech, a healthcare and consumer lifestyle-focused operation, and another devoted to its lighting business. The company said that its HealthTech businesses are already poised to take leading positions in a market estimated to exceed €100 billion.

"Philips is uniquely positioned to help reshape and optimize population health management by leveraging big data and delivering care across the health continuum, from healthy living and prevention to diagnosis, minimally invasive treatment, recovery and home care," CEO Frans van Houten said in a statement when the restructuring was announced.

Philips is also expanding on other fronts, inking deals and beefing up its product portfolio in an effort to amp up its healthcare business. In June, the company partnered with to build a cloud-based platform for clinical information sharing and patient engagement. The FDA last month cleared two apps created through the collaboration, eCareCoordinator and eCareCompanion, and Philips plans to launch the technology through its Philips Transition to Ambulatory Care (eTrAC) program.

- read the Bloomberg article
- get more from Reuters