Masimo's Kiani: Stared Down Tyco
Posted date: 3/20/2006
By Vita Reed
ORANGE COUNTY BUSINESS JOURNAL STAFF
Joe Kiani started and built up a medical device company. Then he stared down Tyco International Ltd. So excuse him for being in Bora Bora last week.
Kiani, chief executive of Irvine-based Masimo Corp., was honored at last week's Excellence in Entrepreneurship Awards luncheon put on by the Business Journal. The awards luncheon was held at the Hyatt Regency in Irvine.
Earlier this year, Masimo collected some $330 million from Tyco, after a long fight over technology patents.
Masimo makes a device called a pulse oximeter, which attaches to a finger or toe and measures oxygen in critically ill adults or newborns.
Kiani and partner Mohammed Diab, a Masimo director, started Masimo in 1989 in classic entrepreneurial fashion-in a garage.
Nine years later, Masimo received Food and Drug Administration approval for its pulse oximeter. Masimo's device cuts down on false alarms and other misreadings caused by patient motion or low blood flow, according to the company.
Masimo licenses its signal extraction technology to more than 35 medical equipment companies, including GE Medical Systems, Medtronic Inc. and Zoll Medical Corp.
The company counts yearly sales of about $110 million and some 900 workers.
Scrappiness and a willingness to take on larger rivals are part of the Masimo story.
Masimo fought hard to get its oximeters and sensors into hospitals. It wasn't easy, even with clinical studies and testimonies showing Masimo's device was superior to ones from larger rivals.
Masimo oximeter: Kiani holds
50-plus patents
Hospital Fight
The company became something of a media darling a few years back. Masimo was featured in the New York Times for its efforts to get its device into larger hospitals.
The effort paid off.
Masimo now has contracts with Premier Inc., a large, San Diego-based nonprofit that helps its member hospitals buy supplies and equipment, and Novation LLC, a rival buying group out of Irving, Texas.
The company's first deal with Premier, signed in 2002, came in the wake of heavy criticism of Premier's awarding of buying pacts to larger device makers.
A U.S. Senate subcommittee criticized Premier and Novation for not signing deals with smaller makers such as Masimo.
Then there's Tyco.
Masimo recently wrapped up a long-running patent fight with Nellcor Puritan Bennett Inc., a Tyco unit.
Last fall, the U.S. Court of Appeals in Washington, D.C., upheld a $164.5 million jury award to Masimo from Nellcor.
The verdict was based on a 2004 finding by a Los Angeles federal jury that Nellcor's Oximax and Oxismart pulse oximeters violated Masimo's patents.
Back in 1999, Masimo sued Nellcor for allegedly violating patents on its motion-tolerant pulse oximetry technology. Nellcor then went on the offensive, filing lawsuits of its own against Masimo's signal processing technology.
There's a warmer, fuzzier side to Masimo.
At last week's awards lunch, Travis Trask, head of the Orange County office of San Diego-based insurance brokerage Barney & Barney LLC, related his own experience with Masimo's pulse oximeter.
Trask said his son was born 10 weeks early and spent 30 days in the hospital.
"Every hour, every second even" he said he and his wife watched a Masimo oximeter attached to the finger of his 2-pound baby.
The accuracy of the device was critical, he said. Administering oxygen after a false alarm can cause blindness in babies.
Trask said his son has grown into a healthy boy.
Iranian Immigrant
Kiani came to the U.S. at age 9 from Iran with his family.
The son of an engineer and a nurse, he graduated high school at 15 and received bachelor's and master's degrees from San Diego State University by 22.
A married father of two, Kiani's early career included working as regional technical manager for electronics distributor Anthem Electronics Inc., now part of Arrow Electronics Inc., as a field engineer for Bell Industries Inc. and as a product engineer at Unisys Corp.
Kiani, who lives in Laguna Beach, holds more than 50 patents relating to signal processing, sensors and patient monitoring.
