September 27, 2023

Digital well being startup Dorsata has filed a lawsuit in opposition to 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 in opposition to athenahealth: unfair and misleading acts and practices, breach of oral contract, breach of fiduciary obligation, widespread legislation fraud, unjust enrichment, theft of commerce secrets and techniques, tortious interference with present prospects, breach of nondisclosure settlement and business disparagement. The startup additionally introduced two counts in opposition to Unified — aiding and abetting a breach of fiduciary obligation, in addition to breach of contract.

The defendants moved to impound the grievance on Friday morning, Dorsata CEO David Fairbrothers informed MedCity InformationBy making an attempt to impound the grievance, athenahealth and Unified are looking for 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 grievance was nonetheless obtainable for public viewing on Massachusetts’ state court website

Specializing in information instruments that assist obstetricians, Dorsata presents a platform that goals to scale back disparities in medical care throughout being pregnant and stop avoidable issues. About 700 OB-GYN suppliers throughout the nation use the startup’s platform, Fairbrothers stated. Dorsata partnered with athenahealth in 2016 and has been offering its software to obstetricians who use the corporate’s EHR since then, he added.

The grievance 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 docs group in the USA.” To do that, athenahealth advised that it work along with Dorsata to offer Unified with an built-in answer, the lawsuit stated.

Subsequent, Dorsata signed a non-disclosure settlement and supplied commerce secrets and techniques and different confidential data to athenahealth — together with monetary projections, buyer pricing, materials contracts and software program structure — in line with the grievance. The startup’s choice to offer this data was “closely influenced” by the chance that it will be acquired by athenahealth, the lawsuit stated.

Working below the understanding that the 2 events would current the software program product to Unified as a three way partnership, Dorsata developed a software 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 data, the lawsuit charged.

Dorsata poured “vital time and sources” into the event of vU, and because of this, the corporate wanted “a big money infusion to proceed to develop its enterprise,” in line 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 broaden their relationship with Unified.” Athenahealth “cultivated this notion,” the grievance stated. When it gave Dorsata these funds, athenahealth additionally signed a promissory be aware prohibiting Dorsata from doing enterprise with any of its rivals, the startup alleged.

By assuring Dorsata that it was occupied with growing a joint answer for Unified, athenahealth “was in a position to purchase vital data of the interior workings of Dorsata’s expertise,” the lawsuit alleged. It wasn’t till after this insider data was shared that Dorsata realized athenahealth by no means had any intention of pitching the joint product to Unified, the grievance stated.

When athenahealth lower Dorsata out of its take care of Unified, the startup was left with a “restricted capability” to generate the income wanted to pay the EHR vendor again its $6 million by 2025, the grievance stated. It additionally stated that athenahealth is telling Dorsata’s prospects that the startup “is financially impaired and won’t stay in enterprise sooner or later.”

Dorsata is looking for damages within the quantity of lack of anticipated earnings, lack of firm valuation, harm to popularity, future misplaced enterprise and unlawfully gained business market benefit. The startup has additionally requested the courtroom to stop athenahealth from accumulating the $6 million it loaned to Dorsata by deeming the EHR vendor’s promissory be aware “a fraudulent artifice meant to stop Dorsata from competing within the market.”

An Athenahealth spokesperson informed MedCity Information the corporate believes “the swimsuit 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 grievance, so he was barred from commenting particularly in regards to the lawsuit. Nonetheless, he did focus on the broader difficulty 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 previously day with their tales of their EHR companions finally competing with them head-to-head after years of growth and work with their mutual prospects,” Fairbrothers stated. “To me, that is anti-competitive and monopolistic in a important business to our nation.”

Photograph: putilich, Getty Photographs