Medical Software Antitrust Suit Advances

SAN FRANCISCO (CN) — A health-data analytics company must face claims that it fraudulently obtained patents and bullied competitors to dominate the market for medical claims organizing software, a federal judge ruled Monday.

Cave Consulting Group, or CCGroup, sued OptumInsight in July 2015, accusing it of antitrust violations, false advertising and malicious prosecution.

CCGroup said that Symmetry Health Data Systems, acquired by OptumInsight in 2003, lied and omitted facts when it applied for and defended software patents with the U.S. Patent and Trademark Office.

Symmetry and later OptumInsight came to control 85 to 90 percent of the medical claims grouper software market after suing two competitors for infringing its "ill-gotten patents," CCGroup claims.

U.S. Magistrate Judge Joseph Spero dismissed with leave to amend in April, finding CCGroup failed to show OptumInsight knew its allegedly ill-gotten patents were invalid or unenforceable when it sued competitors.

On Monday, Spero refused to dismiss the second amended complaint because CCGroup cited specific documents showing OptumInsight attorneys allegedly knew the patented software had an earlier invention date than was disclosed to the USPTO.

CCGroup says OptumInsight withheld from the USPTO details on its offer to sell its invention to Aetna on June 12, 1994, which should have triggered a one-year deadline to file a patent application for the software. The application was filed 10 days after that deadline, on June 22, 1995, according to USPTO records.

In subsequent lawsuits and USPTO proceedings, Symmetry switched the invention date from September 1993 to August 1994, claiming the alleged sales offer was invalid because the invention was "not ready for patenting," according to the complaint.

OptumInsight argued that deposition testimony from one of its programmers, and other documents, contradict CCGroup's claims about the alleged fraudulent invention date.

But Spero said he could not consider those documents in his analysis at the motion to dismiss stage.

"Although CCGroup faces a demanding burden of proof going forward, its allegations meet the pleading standard to survive a motion to dismiss," Spero wrote in a 30-page ruling.

Attorneys for CCGroup and OptumInsight did not immediately return phone calls seeking comment Tuesday afternoon.

CCGroup is represented by Holly House with Paul Hastings in San Francisco.

OptumInisght is represented by J. Thomas Vitt with Dorsey & Whitney in Minneapolis.

Follow @NicholasIovino

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