Chicago-based medical imaging company Merge Healthcare has filed a lawsuit against Downer's Grove, Ill.-based orthopedic software company Medstrat, Inc., for allegedly stealing part of its medical imaging business by making "false" and "disparaging" claims.
According to the suit, filed Nov. 14 in the U.S. District Court for the Northern District of Illinois, Merge's complaint stems from its 2010 purchase of Stryker Imaging, and more specifically, Merge's rights to the orthopedic-specific Stryker Power PACS. Merge claims that Medstrat attempted to lure Stryker legacy customers away through the use of "deliberately false" statements about Merge and its products.
"From the nature of the false and misleading advertisements and communications, it is apparent that defendants believe that some of Merge's legacy Stryker Imaging customers experienced an unpleasant transition when Merge acquired Stryker Imaging," Merge alleges. "Defendants are attempting to scare those customers into believing that another disruptive transition is imminent."
Merge says that Medstrat falsely communicated that it will replace the Stryker PACS system and that--based on its recent hiring of an investment bank--Merge is for sale and is not a "stable company."
In addition, Merge alleges that it is aware of almost 40 of its accounts that have converted to Medstrat "during the period when Defendants were publishing in their advertising and other marketing communications false and misleading comments about Merge and its products." That, Merge claims, could lead to tens of millions of dollars in lost revenue.
Merge is asking for actual damages, as well as punitive damages "based on Medstrat's willful and malicious conduct, and for an injunction against Medstrat "precluding the use in Medstrat's advertising or marketing communications of any false or misleading statement bout Merge or its products."
According to Radiology Daily, a Medstrat spokesperson issued a statement calling the lawsuit "baseless," adding that Medstrat intends to "aggressively defend ourselves without distracting from the important services we provide to our orthopedic partners.