GROWING AND GLOWING
Masimo Planning Headquarters Expansion;
Wins Patent Suit Against Rival
Device Maker
By VITA REED
Scrappy medical device maker Masimo Corp. plans to move to a bigger headquarters in Irvine to match what the company says is its fast sales growth.
Masimo is relocating to a 70,000-square-foot building at 40 Parker in the Irvine Spectrum in early May, said Brad Langdale, the company’s chief financial officer.
The maker of blood oxygen measurement devices has operated out of a 30,000-square-foot building on Kelvin Avenue since 1996.
“We’ve just had dramatic growth,” Langdale said. “When we moved in here, we were just starting sales. Our sales in ’96 were a couple of hundred thousand dollars. Last year, we did about $48 million.”
Privately held Masimo expects to post $60 million in sales this year, Langdale said. The medical device maker has 400 workers overall, with 225 in Orange County and another 175 at its manufacturing plant in Mexicali, Mexico.
Besides corporate functions, the new headquarters will have some manufacturing and shipping, Langdale said.
Masimo’s primary product is a pulse oximeter, which attaches to a finger or a toe. It measures blood oxygen levels in critically ill patients and sounds an alarm when readings fall outside normal limits.
The company’s pulse oximeter has a feature called signal extraction technology, or SET, which it says cuts down on false alarms and other misreadings due to patient motion or low blood flow.
Separately, Masimo learned earlier this month that it won a patent infringement case in a long-running battle against a larger rival. The company is awaiting word on how much it will receive in damages.
In the case, the federal district court jury in Los Angeles ruled that Masimo’s signal processing technology was infringed by Nellcor Puritan Bennett Inc., a rival owned by Tyco International Ltd.
Masimo’s Langdale declined comment on the case, pending the jury’s decision on the damages.
The jury found that Nellcor’s Oximax and Oxismart XL pulse oximeters did violate Masimo’s patents.
Nellcor said it plans to ask the federal Court of Appeals to rule that its fourth- and fifth-generation pulse oximetry technologies don’t infringe the Masimo patent. Nellcor President David Sell said in a statement the company was “greatly disappointed with this decision.”
“We fervently maintain our position that the motion-tolerant software we designed is unique and different from anything Masimo claims to have invented,” Sell said.
Masimo and Nellcor have traded several patent suits in the past few years.
In 1999, Masimo filed suit against Nellcor for allegedly violating patents on its motion-tolerant pulse oximetry patents.
Nellcor then went on the offensive, filing patent suits of its own against Mas-imo’s signal processing technology. In January, a federal court ruled that seven of Masimo’s patents didn’t in-fringe on Nellcor’s technology, according to a Masimo statement.
“We have always maintained that Nellcor’s assertions of infringement were merely a defensive response to our patent infringement suit filed against Nellcor in 1999,” said Joe E. Kiani, Masimo’s chief executive, in a statement.
Masimo, known as a battler, won a three-year contract in 2002 from Premier Inc., a large nonprofit that helps hospitals buy supplies and equipment, to supply its members pulse oximetry equipment and sensors.
The contract win came in the wake of heavy criticism of San Diego-based Premier’s predilection to award buying pacts to larger device makers.
A U.S. Senate subcommittee strafed Premier and Novation Inc., an Irving, Texas-based rival group, for not signing deals with smaller companies such as Masimo. At the time, the New York Times weighed in with coverage of the issue.
Masimo’s Kiani, a native of Iran and an electrical engineer by trade, helped found Masimo in 1989 in a Mission Viejo garage. He financed the company through $175,000 in loans and a second mortgage.
The company said it has licensed its signal extraction pulse oximetry technology to more than 35 providers of patient monitoring systems.
