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16 December 2020
Allscripts is suing CarePortMD for infringing on a trademark it holds.
Allscripts files a lawsuit in the United States District Court in Delaware against CarePortMD claiming it has held a trademark registration for “CarePort” from the US Patent and Trademark Office since January 2013.
In 2016, Allscripts acquired CarePort Health, a software company that connects acute and post-acute providers and payers.
In the week of filing the lawsuit, Allscripts also announced that it planned to sell the CarePort Health care coordination business to WellSky, a healthcare software solution provider, for US$1.3 billion.
During an acquisition, a company’s IP and trademarks factor into its overall value, along with its financial value. With US$1.3 billion on the line, Allscripts has a clear reason to protect its trademark associated with its CarePort business.
CarePortMD, formerly operating as ER at Home LLC, is a telemedicine and urgent care clinic company that obtained a trademark registration for the CarePortMD name in September 2018, according to the lawsuit.
Allscripts claims that CarePortMD’s use of the name is highly likely to cause confusion with Allscripts’ services provided under the similar name because CarePortMD’s services are directed to healthcare services, including telemedicine services through an online platform, which are similar to or conflict with Allscripts’ healthcare software services, also offered via an online platform. Is Allscripts’ claim valid?
According to Allscripts’ complaint:
“The factors considered generally include: a) the degree of similarity between the marks at issue; b) whether the parties’ goods and/or services are sufficiently related that consumers are likely to assume (mistakenly) that they come from a common source; c) the strength of the plaintiff's trademark; d) whether there is evidence of actual confusion; e) the sophistication of the buyers; f) the quality of the defendant’s goods/services; and g) the defendant’s intent in adopting its mark,” says Xiang Wang, a partner at Orrick Herrington & Sutcliffe in Beijing.
“However, the particular factors considered in a likelihood-of-confusion determination, as well as the weighing of those factors, vary from case to case,” Wang says. “Also, the amount and quality of the evidence involved can have a significant impact on the outcome of an infringement lawsuit.”
“Here it seems that we don’t have clear answers to at least some of the above factors, so at this moment, it may be premature to conclude Allscripts’ claim may necessarily prevail,” he says.
Allscripts states that between February and September 2020, the two companies engaged in communications concerning potential resolution of the matter but were unable to reach an amicable resolution.
Allscripts says it has suffered “substantial damages” and is asking the court to order CarePortMD to stop using the name and also is requesting a trial by jury to award damages.
“Allscripts is seeking treble damages (of the defendant’s profits or any damages sustained by the plaintiff, whichever is greater) for intentional infringement,” Wang says. “No amount has been specified by Allscripts in its complaint, because the amount of the defendant’s profits and the damages sustained by the plaintiff (if any) will be established during discovery.”
So in a nutshell, do large companies often bully the small ones? “Well… one shouldn’t make such claim whether in healthcare or any other industry — each dispute should be analyzed separately,” says Wang.
“Though large companies may have more financial resources to fight legal battles when it comes to IP disputes, prior IP rights owners — regardless of their sizes — may often have the initial upper hand,” he says. “That’s why it is crucial for businesses to promptly file their federally registered trademarks which can provide significant benefits, making such trademarks much stronger in enforcement actions (as opposed to common law state trademark rights), as well as bolstering any claims for potential consumer confusion.”
In this case, Allscripts filed the “CarePort” mark on December 6, 2012 and obtained registration on November 5, 2013, while CarePortMD filed “CarePortMD” on July 20, 2017 and obtained registration on September 11, 2018. Allscripts claims that, among other things, these two trademarks are confusingly similar, but Allscripts has prior and superior rights. “Since both Allscripts and CarePortMD are in the same healthcare services industry, CarePortMD’s unauthorized use of the ‘CarePortMD’ mark will likely lead to consumer confusion.” he adds. “Although the court and jury may ultimately decide on these issues, the facts on their face as Allscripts alleges may not be simply interpreted as bullying.”
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