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

Telehealth giant Teladoc is suing competitor Amwell over patent claims.

Teladoc has accused Amwell of infringing on its patents related to telehealth carts, a digital scope and stethoscope, according to a lawsuit filed Monday in the U.S. District Court for the District of Delaware.

The legal dispute between two of the largest telehealth companies over patent claims has been brewing since Teladoc sent a letter to its competitor Sept. 14. alleging that several products “directly and indirectly infringe” on a number of Teladoc's patents.

The letter, addressed to Amwell’s CEOs Ido and Roy Schoenberg, demanded that the company immediately stop selling, making, using and importing the products. Teladoc threatened to “move forward with enforcement of its patents against Amwell" if the company did not comply by Friday, Sept. 18.

Teladoc is seeking unspecified monetary and injunctive relief under patent laws, according to the lawsuit.

The tussle between the telehealth giant raises big questions around defining intellectual property rights in the digital health space.

RELATED: Teladoc accuses Amwell of patent infringement as competition in telehealth market heats up

Teladoc acquired telehealth startup InTouch Technologies in January, which included the company's "extensive patent portfolio covering various aspects of telemedicine, such as the use of robots and telemedicine carts," Teladoc's attorneys said.

The technology at issue in the asserted patents was developed by Dr. Yulun Wang and his colleagues while working for InTouch, according to Teladoc in the lawsuit. Dr. Wang and InTouch developed 130 patents and patent applications.

Teladoc alleges that Amwell continues to infringe on its patient rights by providing the contested products to its partners, clients, customers and end users.

Amwell, which went public last week, said in a filing Sept. 16 with the U.S. Securities and Exchange Commission that "these claims lack merit." The company also said if Teladoc attempts to bring the claims to court, it "intends to defend against them vigorously."

The company said it can provide "no guarantees about the outcome of any potential dispute." However, Amwell officials said in the filing, "even if we were found to infringe upon any valid claim of these patents, our revenues from the Carepoints products approximated 5% of our revenues in 2019."

RELATED: Telehealth company Amwell spikes in public debut with outsized $742M IPO

In its S-1 prospectus to prepare to go public, Amwell pointed to third parties challenging the validity of its patents and trademarks as one risk factor facing the business.

It's the latest skirmish between the two prominent telehealth companies after they were embroiled in an earlier legal dispute over intellectual property rights.

In 2015, Amwell filed a lawsuit against Teladoc accusing it of infringing on a 2007 American Well patent. The suit asked for triple damages plus court fees, as well as an injunction against Teladoc continuing to do business, according to MobiHealthNews.

A year later, a federal judge in Massachusetts threw out the patent infringement lawsuit and invalidated the patent itself. At the time, Amwell immediately fired back and said it would appeal the decision.

Amwell said in a 2016 press release that it has a patent portfolio that includes 28 issued patents and 22 pending patent applications covering various aspects of this field. No other competitor holds a single patent for telehealth, the company said.