Masimo Hails Judge’s Trade Secrets Ruling Against Former Engineer

The Nov. 7 ruling by U.S. District Judge James Selna for Central California in Santa Ana that former Masimo engineer Marcelo Lamego misappropriated the company’s pulse oximetry trade secrets “will give comfort to companies that invest in innovation,” said Masimo’s General Counsel Tom McClenahan in a statement Thursday. The "finding of facts" ruling (docket 8:18-cv-02001) confirmed “that California’s trade secrets laws will help protect their investments from employees who seek to unlawfully use those innovations for their own benefit,” he said.

Lamego was chief technical officer at Masimo spinoff Cercacor before leaving for Apple in 2014 and later launching his own company, True Wearables, which created the Oxxiom, a wireless, wearable pulse oximeter device. Selna’s ruling also said Lamego breached his fiduciary duty of loyalty to Cercacor and violated his employment agreements by keeping confidential information and documents, said Masimo.

Selna also permanently enjoined the sale of the True Wearables pulse oximeter because the Masimo trade secrets were "foundational to its health sensing features," said Masimo. Selna’s ruling said the Oxxiom “may not be sold in its current iteration” until all the trade secrets stolen from Masimo “have been removed and designed around.”

Selna concluded that the injunctive relief he ordered is “narrowly tailored” to protect Masimo’s interests without providing Masimo a “windfall” by awarding it the Oxxiom device “in its entirety.” “It is undisputed that the Oxxiom was designed with many off-the-shelf components,” and Masimo didn't show why it should acquire the device's “non-protected aspects,” said Selna. Efforts to reach Lamego through his attorneys Thursday were unsuccessful.

Masimo has a separate lawsuit pending before the same judge alleging Apple misappropriated Masimo's trade secrets for the Apple Watch relating to Lamego’s employment there. The case is expected to go to a jury trial in March, said Masimo Thursday. Apple denies "each and every allegation," said the company in its February 2021 answer to Masimo's third amended complaint.

Besides alleging trade secret misappropriation under California’s Uniform Trade Secret Act, the January 2020 complaint (docket 8:20-cv-00048) accuses Apple of infringing 10 Masimo patents. Apple “systematically recruited” key Masimo personnel, including Lamego, who had “unfettered access" to Masimo’s “highly confidential technical information,” said the complaint.

Lamego was trained and mentored at Masimo “by the most skilled engineers and scientists, and was taught about the keys to effective non-invasive monitoring, something he was not involved in prior to Masimo,” said the complaint. “He was also exposed to guarded secrets regarding mobile medical products, including key technology and advance plans for future products.”