News Feature | November 8, 2016

Philips, Masimo End Legal Disputes, Sign $300M Partnership

By Suzanne Hodsden

philips masimo

Philips and Masimo have signed a $300-million, multi-year partnership agreement that will combine and market Masimo’s noninvasive biosensing and signal processing solutions with Philips’ patient monitoring equipment, as well as facilitate joint development of new innovations.  The deal brings to an end patent disputes between the two companies, including a $466 million payment owed Masimo by Philips, the result of a 2014 verdict.

Under terms of the arrangement, Philips will pay Masimo $300 million in the fourth quarter of 2016, and will follow up with strategic marketing and product integration agreements over the next several years. Moving forward, Masimo’s sensing technology, which continuously monitors several characteristics of a patient’s blood — including oxygen levels, perfusion index, and pulse rate — using light absorption, will be integrated with Philips’ IntelliVue patient monitoring solutions.

In 2014, a jury ruled in favor of Masimo, which claimed patent infringement against Philips and its fingertip blood oxygen monitors. The jury also decided that Masimo had not infringed upon a Philips patent, reported Bloomberg. The $300 million partnership effectively puts an end to the companies’ legal disputes, including the $466 million awarded as part of that verdict. CEOs from both companies expressed satisfaction that they were able to reach an equitable agreement that will enhance the innovation potential of both companies moving forward.

“This business partnership agreement marks an important day for us and our customers as two leaders in patient monitoring collaborate to develop solutions designed to enhance clinical outcomes and patient safety,” said Frans van Houten, CEO of Royal Philips, in a press release. “Going forward, Philips and Masimo will completely focus on jointly delivering meaningful innovations to our customers.”

Masimo CEO Joe Kiani noted that the agreement will allow both companies to focus on the future, and on new innovations that will benefit both patients and clinicians worldwide.  

An aging population and the evolution of at-home health monitoring — which cuts costs associated with extended hospital stays — are driving growth in the vital signs monitoring market, according to an October report by Research and Markets. Both Masimo and Philips are profiled in the report as leaders in the patient monitoring industry, forecasted to expand significantly through 2022.

Following the separation its legacy lighting business, Philips has shifted its focus to the health technology space, and van Houten told analysts in an earnings call that the company would be making “sizable investments” in digital medicine, wearable sensors, and patient health monitoring. Earlier this year, Philips signed a strategic partnership with Qualcomm, an agreement that will integrate the Qualcomm’s 2net platform with Philips’ recently launched line of connected health products.