Masimo’s Proposed Final Judgment Stretches the Truth, Says ex-CTO

Masimo and its Cercacor Labs subsidiary went too far in their proposed final judgment and permanent injunction against former Chief Technology Officer Marcelo Lamego when they sought to prevent Lamego and his company, True Wearables, from keeping certain confidential documents, said their objections Monday (docket 8:18-cv-02001) in U.S. District Court for Central California in Santa Ana.

U.S. District Judge James Selna’s “finding of facts” ruling Nov. 7 said Lamego misappropriated Masimo’s trade secrets for his own company’s Oxxiom pulse oximetry device, breached his fiduciary duty of loyalty to Cercacor and violated his employment agreements by keeping confidential information and documents (see 2211170034).

Selna’s finding “set forth specific documents by exhibit number that Lamego retained upon leaving Cercacor in January 2014,” said the objections. Those “specifically identified” documents are also listed in Masimo’s proposed judgment, they said. But the proposed judgment improperly seeks “to expand on the definition of confidential information” by insisting that Lamego surrender documents that are “neither identified in the proposed judgment nor supported” by Selna’s finding, it said. Masimo didn't respond Tuesday to requests for comment on Lamego's objections.

Enjoining Lamego from activities involving unidentified confidential information “violates the rule requiring judgments be self-contained and creates ambiguity” as to what will be required of Lamego and True Wearables, said the objections. The proposed judgment should be amended to clearly define confidential information as including only “the specific trial exhibits” in question “and nothing more,” they said.

Lamego and True Wearables also object “to the inaccurate and incomplete statement of the case outcome in the proposed judgment,” they said. The court did not find the defendants liable for misappropriating a key Masimo trade secret in its entirety, contrary to what the proposed judgment depicted, said the objections. The proposed judgment should be amended to reflect that Lamego and True Wireless “only violated the California Uniform Trade Secret Act for aspects of, not the entirety of,” that key trade secret, they said.

The proposed judgment also fails to say the court found Lamego and True Wearables didn't violate the California statute as it applied to two additional trade secrets, said the objections. The proposed judgment should be amended to “accurately track” Selna’s Nov. 7 findings, they said.

The proposed judgment properly recognizes that the court previously dismissed all other causes of action and claims for relief brought in this case, but its statement “appears incomplete,” said the objections. Lamego’s lawyers want a sentence added to clarify that “every claim that was brought or could have been brought is merged into this judgment,” they said.

Lamego also disagrees with the requirement in the proposed judgment that anytime he reads Masimo’s trade secrets, those readings must take place in his lawyer’s office with the lawyer present, said the objections. “The closest legal offices for Lamego’s counsel of record are in Los Angeles while Lamego resides in Coto de Caza, California,” about 60 miles southwest, they said. “Any secure location,” including Masimo’s legal offices, “will appropriately protect” Masimo’s trade secrets, so long as lawyers for Masimo or Lamego are present, they said.

Lamego wants access to the sworn testimony of Masimo’s expert witness, James McNames, an electrical and computer engineering professor at Portland State University in Oregon, said the objections. McNames testified in a document filed March 14 under seal how the Oxxiom’s source code demonstrated that Lamego violated the California Uniform Trade Secret Act, they said.

Giving Lamego access to Masimo’s trade secrets without access to how each trade secret “was interpreted and applied to the Oxxiom source code provides an incomplete picture of the misappropriation and will create potential ambiguity” about Lamego’s compliance with the judgment, said the objections. Selna’s ruling barred the Oxxiom from being sold “in its current iteration” until all the trade secrets stolen from Masimo “have been removed and designed around” (see 2211170034).