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Masimo Corp. v. True Wearables, Inc.

Masimo Corp. v. True Wearables, Inc.

United States Court of Appeals for the Federal Circuit

January 24, 2022, Decided

2021-2146

Opinion

Bryson, Circuit Judge.

Appellees Masimo Corporation and Cercacor Laboratories, Inc. (collectively, "Masimo") filed suit against appellants True Wearables, Inc., ("TW") and Dr. Marcelo Lamego alleging breach of contract, misappropriation of trade secrets under California and federal law, breach of fiduciary duty, and patent infringement. Masimo filed a motion for a preliminary injunction on its trade secret claims, and the district court granted the motion. We affirm.

The alleged trade secret in this case, known [*2]  as the "TSS," relates to an algorithm used to solve optimization problems. Masimo uses this algorithm in devices that make determinations of various physiological values, including the concentration of total hemoglobin, a measurement known as "SpHb." J.A. 110-111. To estimate a patient's SpHb level, a device emits different wavelengths of light from LEDs into the patient's fingertip and then measures how much light has been absorbed when the light emerges from the other side of the fingertip. J.A. 404. The measurements are then inserted into an equation having the form of "SpHb = Ax + By + Cz . . .," where x, y, and z are absorption measurements and A, B, and C are coefficients. Appellant's Br. 9. The coefficients are determined by optimizing the SpHb equation to fit the results of blood tests conducted during a clinical trial. Id. Because the SpHb equation may include up to 257 coefficients, the optimization cannot reasonably be done by hand, and thus a computer algorithm is needed to determine the appropriate coefficients. J.A. 408-410. The TSS is Masimo's implementation of such an algorithm.

Dr. Lamego is a former Cercacor employee who developed the TSS while working at Cercacor. [*3]  As part of his work, Dr. Lamego developed an internal presentation that disclosed two different variations of the TSS. J.A. 413-425; Appellant's Br. 11. After leaving Cercacor, Dr. Lamego worked briefly for another employer before founding TW. J.A. 122. At TW, he developed the "Oxxiom device," a pulse oximeter. J.A. 1378. TW attempted to protect some aspects of that device by filing patent applications.

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2022 U.S. App. LEXIS 1923 *; 2022 U.S.P.Q.2D (BNA) 84; 2022 WL 205485

MASIMO CORPORATION, CERCACOR LABORATORIES, INC., Plaintiffs-Appellees v. TRUE WEARABLES, INC., MARCELO LAMEGO, Defendants-Appellants    

Notice: THIS DECISION WAS ISSUED AS UNPUBLISHED OR NONPRECEDENTIAL AND MAY NOT BE CITED AS PRECEDENT. PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING THE CITATION TO UNPUBLISHED OPINIONS.

Prior History:  [*1] Appeal from the United States District Court for the Central District of California in No. 8:18-cv-02001-JVS-JDE, Judge James V. Selna.

Masimo Corp. v. True Wearables, Inc., 2021 U.S. Dist. LEXIS 88038 (C.D. Cal., Apr. 28, 2021)

Disposition: AFFIRMED.

CORE TERMS

trade secret, district court, economic value, argues, preliminary injunction, disclosure, algorithm, patent application, patent, statistics, merits, reconsideration motion, misappropriated, measurements, succeed, cases

Civil Procedure, Appeals, Standards of Review, Clearly Erroneous Review, Trade Secrets Law, Civil Actions, Questions of Fact, Business & Corporate Compliance, Trade Secrets Law, Protection of Secrecy, Duty to Safeguard, Misappropriation Actions, Elements of Misappropriation, Confidentiality, Trade Secret Determination Factors, Economic Value, Disclosures, Federal Versus State Law, Uniform Trade Secrets Act, Acquisition, Labor & Employment Law, Conditions & Terms, Trade Secrets & Unfair Competition, Trade Secrets, Generally Known, Existence & Ownership, Ready Availability, Remedies, Injunctions, Preliminary & Temporary Injunctions, Abuse of Discretion, Judgments, Relief From Judgments, Altering & Amending Judgments, Appellate Briefs, Reviewability of Lower Court Decisions, Preservation for Review