Masimo Awarded $420 Million in Antitrust Victory over Tyco NellcorMasimo Awarded $420 Million in Antitrust Victory over Tyco Nellcor
March 1, 2005
Following a four-week trial that ended in late March, a federal jury in Los Angeles determined that Tyco Healthcare's Nellcor division (Pleasanton, CA), a business unit of Tyco International Ltd. (Pembroke, Bermuda), violated antitrust laws related to the sales of its pulse-oximetry technology and awarded $140 million in damages to the plaintiff, Masimo Corp. (Irvine, CA). Under antitrust laws, the award is automatically tripled to $420 million. The Tyco unit must also pay all of Masimo's legal costs.
Specifically, the jury ruled that Nellcor unlawfully exercised and maintained monopoly power through a series of anticompetitive practices—including sole-source agreements, bundling of unrelated products, compliance-based pricing contracts, and exclusionary marketing agreements with manufacturers—that constituted unlawful restraints of trade.
Commenting on the verdict, Joe E. Kiani, Masimo's founder, chairman, and CEO, said his company sought legal relief from Tyco's practices, which prevented purchasing decisions from being made on the merits of the particular product. “We are gratified that the jury found in our favor. Today, my hope is that this verdict will do more than simply open competition in the pulse-oximetry market, but also send a strong message that medical product sales and purchases should be based on each individual product's ability to help clinicians improve patient care. We hope this verdict will benefit patients and our nation's healthcare system by fostering vigorous competition, thereby promoting innovative, cost-effective technologies.”
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