With the payout, Nellcor gets a patent license to continue selling its pulse oximeter and airway management products, in exchange for paying ongoing royalties. Oximeters measure oxygen blood levels.

Masimo's patents in the case, 5,769,785, 6,157,850, 6,206,830, & 6,263,222, detail signal processing methods improving oximetry reading accuracy.

The court proceedings had been dramatic. The jury found for Masimo on all four patents in a six-week trial, but then the district court found one patent unenforceable due to inequitable conduct, reversed the jury verdict of infringement for one patent, and reversed willfulness on the other two. Tyco had countersued with its own patent assertion, but that didn't cut the ice. Damages were set at $134.5, which survived appeal review. Being sent back to the district court for a permanent injunction, Tyco decided it was time to settle up and get on with business, paying $265 million for damages and $65 million in advance royalties.

U.S. Surgical, another Tyco subsidiary, just lost a patent infringement case brought by Applied Medical. When it rains it pours.