Digital well being startup Dorsata has filed a lawsuit towards EHR supplier athenahealth and girls’s well being firm Unified Women’s Healthcare. The startup alleged that athenahealth stole commerce secrets and techniques, used misleading enterprise practices and breached its contract — and that Unified aided and abetted these purported practices.
Dorsata filed its lawsuit within the civil courtroom of Suffolk County, Massachusetts on Wednesday. Dorsata alleged 9 counts towards athenahealth: unfair and misleading acts and practices, breach of oral contract, breach of fiduciary responsibility, frequent legislation fraud, unjust enrichment, theft of commerce secrets and techniques, tortious interference with present clients, breach of nondisclosure settlement and industrial disparagement. The startup additionally introduced two counts towards Unified — aiding and abetting a breach of fiduciary responsibility, in addition to breach of contract.
The defendants moved to impound the criticism on Friday morning, Dorsata CEO David Fairbrothers advised MedCity Information. By making an attempt to impound the criticism, athenahealth and Unified are in search of to eradicate public entry to the lawsuit and stop Dorsata from talking about it to the press. Nonetheless, on the time of this text’s publication, the criticism was nonetheless out there for public viewing on Massachusetts’ state court website.
Specializing in knowledge instruments that assist obstetricians, Dorsata affords a platform that goals to cut back disparities in medical care throughout being pregnant and stop avoidable problems. About 700 OB-GYN suppliers throughout the nation use the startup’s platform, Fairbrothers mentioned. Dorsata partnered with athenahealth in 2016 and has been offering its instrument to obstetricians who use the corporate’s EHR since then, he added.
The criticism alleged that in 2021, athenahealth approached Dorsata and “proposed that they work collectively to pursue a broader relationship with Unified, the most important obstetrics and gynecological medical doctors group in america.” To do that, athenahealth prompt that it work along with Dorsata to supply Unified with an built-in resolution, the lawsuit mentioned.
Subsequent, Dorsata signed a non-disclosure settlement and supplied commerce secrets and techniques and different confidential info to athenahealth — together with monetary projections, buyer pricing, materials contracts and software program structure — in accordance with the criticism. The startup’s resolution to supply this info was “closely influenced” by the chance that it will be acquired by athenahealth, the lawsuit mentioned.
Working below the understanding that the 2 events would current the software program product to Unified as a three way partnership, Dorsata developed a instrument referred to as vU. Nonetheless, athenahealth was concurrently creating its personal model of vU that it deliberate to pitch to Unified with out Dorsata’s information, the lawsuit charged.
Dorsata poured “important time and sources” into the event of vU, and because of this, the corporate wanted “a major money infusion to proceed to develop its enterprise,” in accordance with the lawsuit. The startup determined to borrow $6 million from athenahealth due to its perception that athenahealth “would both buy Dorsata or proceed its three way partnership to develop their relationship with Unified.” Athenahealth “cultivated this notion,” the criticism mentioned. When it gave Dorsata these funds, athenahealth additionally signed a promissory notice prohibiting Dorsata from doing enterprise with any of its opponents, the startup alleged.
By assuring Dorsata that it was curious about creating a joint resolution for Unified, athenahealth “was in a position to purchase important information of the internal workings of Dorsata’s know-how,” the lawsuit alleged. It wasn’t till after this insider info was shared that Dorsata realized athenahealth by no means had any intention of pitching the joint product to Unified, the criticism mentioned.
When athenahealth minimize Dorsata out of its cope with Unified, the startup was left with a “restricted means” to generate the income wanted to pay the EHR vendor again its $6 million by 2025, the criticism mentioned. It additionally mentioned that athenahealth is telling Dorsata’s clients that the startup “is financially impaired and won’t stay in enterprise sooner or later.”
Dorsata is in search of damages within the quantity of lack of anticipated earnings, lack of firm valuation, damage to status, future misplaced enterprise and unlawfully gained industrial market benefit. The startup has additionally requested the courtroom to forestall athenahealth from accumulating the $6 million it loaned to Dorsata by deeming the EHR vendor’s promissory notice “a fraudulent artifice supposed to forestall Dorsata from competing within the market.”
An Athenahealth spokesperson advised MedCity Information the corporate believes “the go well with is with out benefit” and plans to defend itself “vigorously.”
MedCity Information’ interview with Dorasata’s Fairbrothers occurred shortly after athenahealth moved to impound the criticism, so he was barred from commenting particularly in regards to the lawsuit. Nonetheless, he did focus on the broader problem at hand, declaring that it’s not unusual for EHR firms to deceive their digital well being companions.
“I’ve had greater than a few digital well being founders attain out to me prior to now day with their tales of their EHR companions finally competing with them head-to-head after years of growth and work with their mutual clients,” Fairbrothers mentioned. “To me, that is anti-competitive and monopolistic in a vital business to our nation.”
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