Mallinckrodt, Inc. v. Masimo Corp.

MEMORANDUM OF DECISION AND ORDER RE:

Masimo’s Motion for Summary Judgment Re Ownership of Patents

I. Background

In this patent infringement suit, defendant Masimo Corp. (“Masimo”) counterclaims, alleging that plaintiffs Nellcor Puritan Bennett Inc. and Mallinckrodt Inc. (“Nellcor”) infringe on certain Masimo patents through the sale of certain products. On its part, Nellcor, in its Third Counterclaim, seeks a declaratory judgment that it owns each and every one of the Masimo patents asserted in this case. The issue presented by the Motion for Summary Judgment before the Court is the ownership of those Masimo patents.

At the center of this controversy is Newport Medical Electronics, Inc. (“Newport”), a California corporation incorporated in March 1988 for the purposes of developing and marketing inexpensive pulse oximeters. In pursuit of this goal, Newport hired Joe Kiani in May 1988. Kiani was granted 160,000 shares of Newport stock as well as a seat on Newport’s Board of Directors. Additionally, Kiani’s sister received 30,000 shares of Newport stock.

In the summer of 1988, Kiani conceived of employing an adaptive filter in a pulse oximeter. He suggested using an adaptive…