Allscripts sues telehealth startup for trademark infringement as it looks to sell its CarePort business

Gavel court room lawsuit judge
CarePortMD's CEO said the trademark infringement lawsuit is as an example of "a large business strangling promising startups for no justifiable reason." (Pixabay)

Allscripts is suing a telemedicine startup over its name, claiming that CarePortMD has infringed on a trademark it holds.

The health IT giant filed a lawsuit Thursday in the U.S. District Court in Delaware against CarePortMD claiming it has held a trademark registration for "CarePort" from the U.S 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. The health technology announced this week that it plans to sell the CarePort Health care coordination business to WellSky for $1.3 billion.

During an acquisition, a company's intellectual property and trademarks factor into its overall value, along with its financial value. With $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, citing the U.S. Patent and Trademark Office (USPTO).

RELATED: Allscripts sells care coordination business to WellSky for $1.3B

Allscripts claims it neither gave permission nor licensed CarePortMD the right to use the CarePort trademark. "Because CarePortMD’s unauthorized use of CarePortMD mark will likely lead to consumer confusion, that use constitutes trademark infringement," the company said in the lawsuit.

The telehealth company'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, the company argued in the lawsuit..

Between February 2020 and September 2020, the two companies engaged in communications concerning potential resolution of the matter but were unable to reach an amicable resolution, Allscripts said.

In an emailed statement sent to Fierce Healthcare, Ashok Subramanian, M.D., CarePortMD's CEO, said the company followed the guidelines put forth by the USPTO and was issued a lawful trademark on a name that is a conjugate of three common terms.

"No objections were made by Allscripts during the requisite six-month period prior to the issue of our trademark," he said.

RELATED: Dispute between telehealth giants heats up as Teladoc sues Amwell for patent infringement

"We made several deliberate and amiable attempts to understand and resolve the nature of the Allscripts concern after they approached us, but they were unanswered. Unfortunately, we view this as an example of large business strangling promising startups for no justifiable reason- regrettably at the expense of the much-needed and effective care model we have deployed. We put our trust into the USPTO’s process of granting our trademark," Subramanian said.

In the meantime, Allscripts argued in the lawsuit that by continuing to use the name, CarePortMD is depriving the company of its exclusive right to control, use and otherwise benefit from its registered trademark and will have a "substantial and adverse effect on Allscripts’ existing and projected future interstate business" as it relates to its CarePort solutions business.

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.