IP Law Daily, PATENT—D. Colo.: MDx not liable for secondary infringement of physician-finder patent, (Nov 6, 2014)

By Mark Engstrom, J.D.

MDx Medical did not induce or contribute to the infringement of a Health Grades method patent that described a system of connecting medical patients and health care providers, the federal district court in Denver has ruled (Health Grades, Inc. v. MDx Medical, Inc., November 4, 2014, Moore, R.). Summary judgment of non-infringement was granted to MDX on Health Grades’ claims of secondary (induced and contributory) infringement.

Background. Health Grades sued MDx for the infringement of U.S. Patent No. 7,752,060, titled “Internet system for connecting healthcare providers and patients.” The court previously granted summary judgment to MDx on the issue of literal infringement. In this decision, the court addressed the defendant’s motion for summary judgment on the issue of indirect infringement.

In 2011, MDx agreed to provide Aetna with healthcare provider data for use in Aetna’s “iTriage” application, which was used to connect health care providers with potential patients. The agreement stated that MDx would create an MDx “Master Database” and an “Aetna-defined database” that was fed with data from the Master Database.

The agreement did not specify what data Aetna would collect from MDx, or how Aetna would use that data, but it did specify that the Master Database would contain “all MDx Patient Reviews,” and would “connect directly with Aetna’s Patient Review System.” In addition, MDx agreed to include “all its patient ratings for the providers in the Master Database, for display by Aetna.”

Induced infringement. MDx argued that Health Grades did not and could not proffer any evidence of a specific intent by MDx to induce the infringement of the patent in suit. In response, Health Grades offered the following allegations, which were largely derived from MDx’s agreement with Aetna: (1) MDx had agreed to develop, manage, and maintain a database that would become the “data backbone” of Aetna’s iTriage application; (2) iTriage was “strikingly similar to MDx’s accused on-line information system”; (3) MDx had a policy to avoid infringement, but it failed to communicate that policy to Aetna, which did not follow it; (4) MDx was developing an Aetna Patient Review System, and perhaps was providing the insurer’s “Provider EZ Edit” tool, which could enable Aetna to collect healthcare provider information directly from the healthcare provider; and (5) MDx provided Aetna with a demonstration of how MDx’s accused product functioned. In addition, Health Grades asserted a “passing reliance” on the fact that one official at MDx had the iTriage mobile application on his smart phone, and thus was presumably aware of what Aetna was doing with MDx’s data.

According to the court, none of those asserted facts, even if they were proven at trial, would create a genuine issue of material fact with respect to the specific intent of MDx to induce infringement.

The court noted that Health Grades’ argument regarding intent could be condensed to the following statement: “[b]y providing its accused data and performing the other tasks outlined in the Aetna Agreement, MDx is actively inducing Aetna to infringe [the patent in suit].” The court, however, disagreed with that statement. Providing a database did not amount to intent by MDx to induce the infringement of the patent in suit, the court explained, and providing a database was fundamentally what MDx had agreed to do (and had done) for Aetna.

According to the court, the Aetna Agreement clearly stated that “Aetna define[d] the data it wants in the Master Database.” Because Health Grades failed to proffer sufficient evidence of a material, factual dispute regarding specific intent, summary judgment was granted to MDx on Health Grades’ claim of induced infringement (active inducement).

Contributory infringement. The court explained that, in order to succeed on a claim of contributory infringement, the patentee had to show that: (1) the defendant knew that the combination for which its components were especially made was both patented and infringing and (2) the defendant’s components had “no substantial non-infringing uses.”

MDx argued that the data it was leasing to Aetna had substantial non-infringing uses, and that providing Aetna with a database according to Aetna’s specifications did not amount to contributory infringement. The court agreed.

Health Grades, for example, submitted an Expert Report that explained how the iTriage application functioned. The report reflected the expert’s understanding that a “results list” that was generated in response to a query was actually “the first page of the profile” on a “first healthcare provider,” an understanding that was previously rejected by the court. Once inside the report on the first healthcare provider, the screenshot provided by Health Grades revealed that the iTriage report lacked some claim elements, such as comparison ratings. Health Grades’ own evidentiary submissions thus showed that the data had substantial non-infringing uses.

Accordingly, the court concluded that the information and tools that Aetna received from MDx had substantial non-infringing uses. Significantly, many potential uses of the data would not result in a report that contained comparison ratings in the manner that was covered by the patent in suit. Because Health Grades failed to identify sufficient evidence of a material, factual dispute regarding non-infringing uses, summary judgment was granted to MDx on Health Grades’ claim for contributory infringement.

The case is Civil Action No. 11-cv-00520-RM-BNB.

Attorneys: Kris John Kostolansky (Lewis Roca Rothgerber LLP) for Health Grades, Inc. Scott Butler Murray (Sills, Cummis & Gross PC) for MDx Medical, Inc.

Companies: Health Grades, Inc.; MDx Medical, Inc.

Cases: Patent ColoradoNews