Philips, Masimo settle lawsuits

AMSTERDAM and IRVINE, Calif. - Royal Philips and Masimo have entered into a business partnership agreement that ends all pending lawsuits between the two companies.

As part of the agreement, Philips is released from having to pay a $467 million jury verdict that was awarded to Masimo in October 2014. Instead, it will pay $300 million to Masimo in the fourth quarter, and will make certain marketing and product integration commitments over the coming years.

“I am very satisfied that we have reached an agreement that is beneficial for both companies and that we have ended our legal disputes,” 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.”

Philips and Masimo have agreed to jointly market and sell in North America and certain markets in Asia and Europe Masimo's non-invasive sensor technologies, such as its rainbow and SET platforms, in conjunction with Philips' patient monitoring and select therapy solutions.

Additionally, Philips will in the future integrate Masimo SedLine brain functioning monitoring, O3 regional oximetry and Nomoline capnography technologies in certain Philips IntelliVue monitors.

“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,” van Houten said.

Entering into the agreement has minimal impact on Philips' income from operations in the fourth quarter of 2016, according to the release.

Masimo expects to use some of the after-tax proceeds from the agreement to repay amounts outstanding under its revolving line of credit, the release says.