SAN DIEGO--(BUSINESS WIRE)--Oct. 16, 2017--
(NASDAQ: MASI) announced today that the bankruptcy court in San Diego
has issued final judgment, holding that Sotera Wireless Employees
misappropriated Masimo trade secrets. The misappropriation stems from
two former Masimo employees, James Welch and David Hunt, copying
thousands of confidential Masimo documents, and using Masimo’s trade
secrets to benefit Sotera. The Court found clear and convincing evidence
that willful and malicious misappropriation exists. The court also found
that the actions of Welch and Hunt were “despicable conduct,” and that
they “consciously disregarded Masimo’s rights.”
The Court has permanently enjoined Sotera from retaining, disclosing,
disseminating or using confidential Masimo documents, originating from
either James Welch’s or David Hunt’s Masimo computers. The Court also
enjoined Sotera, until September 16, 2021, from including Mr. Welch in
Sotera’s Design Control process, including preparing the Customer Needs
Document, the Design Input Requirements documentation, the Software
Requirements Specification or User Story, implementing software design
and the Software Design Specification, the Design Review, the
Verification process, the Validation process, developing schematics and
other production specifications, and preparing the design history file.
David Hunt had not been working at Sotera since 2015. Masimo understands
that Mr. Welch is also no longer employed by Sotera.
This case was originally the subject of an action in the Superior Court
of Orange County filed in May 2013 against Welch, Hunt and Sotera. This
portion of that case was tried in the bankruptcy court in San Diego
after Sotera filed for Chapter 11 bankruptcy in 2016. Thus, the San
Diego ruling concerned the misappropriation of Masimo’s trade secrets by
Sotera. The remaining portion of the Superior Court action against Welch
and Hunt remains pending.
Joe Kiani, Founder and CEO of Masimo, said, “I am sad that we even had
to pursue this case. These were trusted employees. I hope all members of
Masimo’s team will adhere to Masimo’s guiding principles of ‘remaining
faithful to your promises and responsibilities, being driven by
fascination and accomplishment, not power and greed, making every day as
fun as possible, making themselves better each year, and, doing what is
best for patient care.’ We believe these guiding principles are critical
not only to our success, but to our integrity and humanity.”
Masimo (NASDAQ: MASI) is a global leader in innovative noninvasive
monitoring technologies. Our mission is to improve patient outcomes and
reduce the cost of care by taking noninvasive monitoring to new sites
and applications. In 1995, the company debuted Masimo SET®
Measure-through Motion and Low Perfusion™ pulse oximetry, which has been
shown in multiple studies to significantly reduce false alarms and
accurately monitor for true alarms. Masimo SET® has also been
shown to help clinicians reduce severe retinopathy of prematurity in
neonates,1 improve CCHD screening in newborns,2
and, when used for continuous monitoring with Masimo Patient SafetyNet™*
in post-surgical wards, reduce rapid response activations and costs.3,4,5
Masimo SET® is estimated to be used on more than 100 million
patients in leading hospitals and other healthcare settings around the
world,6 and is the primary pulse oximetry at 17 of the top 20
hospitals listed in the 2017-18 U.S. News and World Report Best
Hospitals Honor Roll.7 In 2005, Masimo introduced rainbow®
Pulse CO-Oximetry technology, allowing noninvasive and continuous
monitoring of blood constituents that previously could only be measured
invasively, including total hemoglobin (SpHb®), oxygen
content (SpOC™), carboxyhemoglobin (SpCO®), methemoglobin
(SpMet®), and more recently, Pleth Variability Index (PVi®)
and Oxygen Reserve Index (ORi™), in addition to SpO2, pulse
rate, and perfusion index (PI). In studies with SpHb, reductions in
blood transfusion** were observed8,9 and when used
with PVi, a reduction in 30-day mortality was observed.10 In
2014, Masimo introduced Root®, an intuitive patient
monitoring and connectivity platform with the Masimo Open Connect™
(MOC-9™) interface, enabling other companies to augment Root with new
features and measurement capabilities. Masimo is also taking an active
leadership role in mHealth with products such as the Radius-7™ wearable
patient monitor, iSpO2® pulse oximeter for
smartphones, and the MightySat™ fingertip pulse oximeter. Additional
information about Masimo and its products may be found at www.masimo.com.
Published clinical studies on Masimo products can be found at http://www.masimo.com/cpub/clinical-evidence.htm.
*The use of the trademark Patient SafetyNet is under license from
University HealthSystem Consortium.
**Clinical decisions regarding red blood cell transfusions should be
based on the clinician’s judgment considering, among other factors:
patient condition, continuous SpHb monitoring, and laboratory diagnostic
tests using blood samples.
Castillo A et al. Prevention of Retinopathy of Prematurity in Preterm
Infants through Changes in Clinical Practice and SpO2
Technology. Acta Paediatr. 2011 Feb; 100(2):188-92.
de-Wahl Granelli A et al. Impact of pulse oximetry screening on the
detection of duct dependent congenital heart disease: a Swedish
prospective screening study in 39,821 newborns. BMJ. 2009;338.
Taenzer AH et al. Impact of Pulse Oximetry Surveillance on Rescue
Events and Intensive Care Unit Transfers: A Before-And-After
Concurrence Study. Anesthesiology. 2010; 112(2):282-287.
Taenzer AH et al. Postoperative Monitoring – The Dartmouth Experience. Anesthesia
Patient Safety Foundation Newsletter. Spring-Summer 2012.
McGrath SP et al. Surveillance Monitoring Management for General Care
Units: Strategy, Design, and Implementation. The Joint Commission
Journal on Quality and Patient Safety. 2016 Jul; 42(7):293-302.
Estimate: Masimo data on file.
Ehrenfeld JM et al. Continuous Non-invasive Hemoglobin Monitoring
during Orthopedic Surgery: A Randomized Trial. J Blood Disorders
Transf. 2014. 5:9. 2.
Awada WN et al. Continuous and noninvasive hemoglobin monitoring
reduces red blood cell transfusion during neurosurgery: a prospective
cohort study. J Clin Monit Comput. 2015 Feb 4.
Nathan N et al. Impact of Continuous Perioperative SpHb Monitoring.
Proceedings from the 2016 ASA Annual Meeting, Chicago. Abstract #A1103.
This press release includes forward-looking statements as defined in
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, in connection with the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations about future events
affecting us and are subject to risks and uncertainties, all of which
are difficult to predict and many of which are beyond our control and
could cause our actual results to differ materially and adversely from
those expressed in our forward-looking statements as a result of various
risk factors, including, but not limited to: risks related to our
assumptions regarding the repeatability of clinical results; risks
related to our belief that Masimo's unique noninvasive measurement
technologies contribute to positive clinical outcomes and patient
safety; as well as other factors discussed in the "Risk Factors" section
of our most recent reports filed with the Securities and Exchange
Commission ("SEC"), which may be obtained for free at the SEC's website
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, we do not know whether our
expectations will prove correct. All forward-looking statements included
in this press release are expressly qualified in their entirety by the
foregoing cautionary statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
today's date. We do not undertake any obligation to update, amend or
clarify these statements or the "Risk Factors" contained in our most
recent reports filed with the SEC, whether as a result of new
information, future events or otherwise, except as may be required under
the applicable securities laws.
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