Masimo Sues Tyco Over Business Practices

Irvine medical products maker Masimo Corp. said it has filed an antitrust lawsuit against Tyco Health Care Group LP and its Mallinckrodt Inc. unit, alleging that they engaged in anti-competitive business practices.

The suit, filed Wednesday in U.S. District Court, centers on sales of pulse oximeters, which are used to measure oxygen levels of critically ill patients.

Masimo contends its device outperforms one made by Tyco’s Mallinckrodt Inc. unit, but says Tyco has offered rebates and paid fees to big hospitals to prevent them from buying products made by others.

The suit alleges that hospitals that agreed to purchase at least 95% of their oximeter needs from Tyco received rebates equal to 5% and 7%.

But if the hospital ever failed to keep up that 95% figure, it was required to repay all the rebates it had received.