Non-Active Entities Target Electronic Health Record Applications in Patent Litigation | Thompson Coburn LLP
Non-exercising patent entities are those that own patents but do not produce products or services protected by those patents. They have another name: the patent trolls. Two of these entities have timed their goals well: electronic medical records databases, a product widely used by health care systems and practitioners across the country.
DatRec
DatRec was established in April 2020 with the acquisition of four US patents and one pending patent application. The patents acquired previously belonged to Famillion, an Israel-based genealogy and networking site designed to connect families. DatRec is one of several associated patent assertion entities associated with Dynamic IP Deals LLC, including Nacar IP and AML IP LLC. DatRec patents relate to personal data database software and the initial targets were popular genealogical databases.
In 2021, DatRec focused its patent claim efforts on electronic health record management applications. Targets include both industry leaders and new market entrants. Consistent with changes in recent years in limiting the jurisdiction of patent lawsuits, cases have been filed across the United States. But, a preference for filing in Texas when possible is clear. (See our previous article on the growth of the Western District of Texas as a hotspot for patent litigation.)
Business ends in just a few months, often before a response is filed, perhaps indicating that the settlement license fees are modest.
Decapolis systems
Decapolis Systems, LLC is a recently formed non-practicing patent claims entity by prolific inventor Raymond Anthony Joao. Joao is a patent attorney who has focused from private practice to filing patent applications. Joao has a long history of claiming his patents; for over ten years, it has targeted video streaming services, banking software, and trucking companies, among others.
Decapolis was created in February 2021 and holds at least two patents relating to “methods of processing and / or providing health information and / or health-related information”. Decapolis has targeted the main providers of electronic health records software.
While much of the Joao case resolves to avoid legal trouble, the challengers have had some success when they have referred cases to court. Demonstrate that quality does not always follow quantity.
Impact on healthcare practices
To date, neither DatRec nor Decapolis have targeted customers of these healthcare applications and instead target software vendors. If the software vendor settles with the patent holders, the customer would likely be protected. However, tactics could change and target health care providers directly. In this case, clients may want to consult a lawyer to determine the best answer.
Due to the quick settlements, no one has yet challenged the DatRec or Decapolis patents. Such a challenge would likely take the form of a section 101 challenge. current state of the challenges of § 101, which have been found to significantly limit the types of inventions that can be patented in the United States.
To stay ahead of this risk, you may want to consider reviewing contracts with EMF providers to make sure they contain strong indemnification clauses.