This week: a low-profile Texas doctor is looking for a piece of the growing medical software market; a holding company controlled by a former Townsend partner files more lawsuits; and last week's one and only lawsuit filed in the Eastern District of Texas.
Texas Doc Has Eyes on a Prize
- Prompt Medical Systems v. iMedica Corp. 09-cv-01286, S.D. Texas, filed 4/28/09.
The Obama administration has made the switch to electronic medical records a key part of its economic stimulus plan, and is set to give health care providers $17 billion in federal funds to help make it happen. Much of the work will be done by medical technology companies hired by hospitals to implement the new records.
Eager to get some of that stimulus cash, medical technology companies are rolling out new products to help with the switch—and patent lawyers and their inventor clients are rolling out new lawsuits in response.
Medical software provider iMedica launched a new version of its Patient Relationship Manager software at the end of March. Last week, iMedica joined a growing club: companies that have discovered they will have to pay off a low-profile South Texas opthalmologist and his attorneys—or risk being shut down.
Prompt Medical Systems is a holding company that wields the 5,483,443 patent, which describes a doctor entering Current Procedural Terminology (CPT) codes into a computer.
CPT codes describe just about any procedure a doctor might perform on a patient, and are used in medical billing. The codes are copyrighted by the AMA, which collects licensing fees from anyone who uses them. The '443 patent was issued in 1994 to Dr. Bernard Milstein, an opthalmologist in Galveston, Texas, and assigned to Prompt Medical. Milstein has been the CEO of Prompt Medical since 1992.
In 2005 and 2006, Milstein's company sued several companies in the medical coding field. Those targets included small companies like CodeCorrect and Alabama-based Unicor Medical, as well as the nation's biggest medical information provider, including 3M Health Information Systems, McKesson Corp., and Ingenix, a medical software company that's part of United Health.
The suit against CodeCorrect was dropped and the lawsuits against the other defendants were all settled by 2006. In 2007, Prompt Medical filed suit again, this time in the Southern District of Texas (Houston), against Orange County medical software company Quality Systems Inc. That case settled in December 2008.
Which brings us to last week, when Prompt Medical sued iMedica Corp., claiming that the latter’s Patient Relationship Manager software infringes the '443 patent. Milstein is asking the court to shut down iMedica's software unless they take a license to his patent.
Dr. Milstein did not return telephone messages left at his office. Milstein's attorneys, Eric Adams and Ernest Boyd of Mehaffy Weber, did not return phone and e-mail messages.
Texas corporate records indicate that Milstein's litigation is being bankrolled in part by a Viriginia investment banker, John J. McKenna, the CEO of HamiltonClark. McKenna is listed as the President of Prompt Corporation, the parent company of Prompt Medical Systems.
A Texan Patent-Holder Prefers the West Coast
- Guardian Media Technologies, Ltd. v. Apex Digital, et al. 09-cv-02733, C.D. California, filed 4/20/2009.
Consider the strange bird that is Guardian Media. This "Texas" holding company has a California patent lawyer listed as its lone corporate officer. But, as The Prior Art readers know—that's actually not so unusual.
What is unusual is that Guardian Media, while ostensibly based in Texas, doesn't file suit there. Its suit against Apex, like most of the other 20 litigations it has brought since it first began filing infringement suits in 2006, was filed in Southern California. (It has occasionally dabbled in the Western District of Wisconsin's "rocket docket," as well.) Guardian has sued just about every technology company you can think of since then, as well as many large retailers.
Guardian's job is to assert the 4,930,158 and 4,930,160 patents, which claim to cover parental control features on DVD players and televisions—features that have been required by FCC regulations since 1996. The patents in question were issued in 1990, and Peter S. Vogel, an Australian, is the named inventor.
A Guardian Media case that went to the Federal Circuit on a jurisdictional issue in 2006 includes a letter from an attorney saying he represents Vogel personally, which would indicate the inventor has some direct involvement in the holding company. Texas corporate records show that Guardian Media is owned by another shell company, which has only one corporate officer: Thomas E. Coverstone, a San Diego patent lawyer formerly with Townsend and Townsend and Crew.
Neither Coverstone nor Guardian Media's outside lawyers returned TPA's calls. Guardian Media is represented in this case by a Fort Worth patent boutique, Nelson Bumgardner Castro, a Texas firm that does work for holding companies, and LA-based Klinedinst PC.
In E.D. Tex, Just One Lonely Lawsuit
- i2 Technologies Inc. v. Oracle Corporation, 09-cv-00194, E.D. Texas (Tyler). Filed 4/29/2009.
Dallas-based supply-chain software company i2 Technologies settled a two-year long patent lawsuit against European software giant SAP last year. Last week, it unleashed an 11-patent assault against SAP's chief rival in the enterprise software business, Silicon Valley-based Oracle Corp. The two lawsuits involve several of the same patents, which have names like "representation systems for process planning" and the fantastic "Intelligent Order Promising."
i2 has sued Oracle in the Eastern District of Texas, and is represented by a McKool Smith legal team led by Sam Baxter. He also represented i2 in the SAP case.
It's worth noting that i2 v. Oracle was the only new patent suit filed in E.D. Tex last week. While TPA has long been skeptical of the steady stream of reports announcing the death of the E.D. Tex, preliminary data indicates that the district may indeed lose its spot as the most popular district for patent lawsuits this year.
My rough PACER search—which does not account for transfers or duplicate lawsuits—shows 1002 patent cases filed from Jan. 1 through May 1 of 2009. Of those cases, 75 were filed in E.D. Texas. Compare that to the 98 lawsuits that were filed in C.D. California; 79 filed in Delaware; and 72 filed in N.D. California.
Photo: koreana / flickr
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