Medtronic Questions Masimo Pulse-Ox Patents

Medtronic had been paying Masimo royalties for two pulse-oximetry patents held by Masimo. Now Medtronic is questioning the validity of those patents with the Patent Trial and Appeal Board of the USPTO.

Qmed Staff

Medtronic has filed a claim with the USPTO's Patent Trial and Appeal Board to challenge claims made in two Masimo patents. While Medtronic is now paying royalties to Masimo for the patents, Medtronic's move indicate that it may stop doing so if the board supports its dispute.

In total, Medtronic filed three separate inter partes review petitions, according to an SEC document.

The patents, 7,496,393 and 8,560,034, both of which relate to an signal processing apparatus used for pulse oximetry, were granted in 2009 and 2013, respectively.

Before Medtronic acquired Covidien, the latter company had unsuccessfully contested the 8,560,034 patent, according to Masimo. Masimo plans on contesting Medtronic's claim to that patent on those grounds.

A report from Barrons indicates that the news should be a small worry to Masimo. "This renewed legal distraction does not change the fact that Masimo's pulse oximetry business continues to perform well and take share from Medtronic," it explains, adding: "We reiterate our Outperform rating on shares of Masimo and would be buyers on any weakness related to this event."

According to Barrons, financial analysts had expected that Masimo would collect royalty payments from Medtronic U.S. pulse-oximetry sensor sales until October 2018. It estimates that the payments amount to roughly $28 million annually.

In May, a Delaware federal court agreed with an October 2014 $467-million verdict awarded to Masimo against Philips Electronics North America Corp. and Philips Medizin-Systeme Boblingen GmbH.

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