- Software giant Microsoft has filed a suit against Community Health Systems, alleging the hospital company willfully infringed its copyrighted software and breached contractual agreements.
- The March 15 complaint, filed in the U.S. District Court for the Middle District of Tennessee, claims CHS entered into numerous computer software licensing agreements over nearly two decades. The agreements, part of the company’s volume licensing program, prohibit distribution, sublicensing, renting, leasing, lending or hosting any of Microsoft’s software.
- CHS also agreed to independent audits to verify compliance with the contract terms, the complaint said.
The lawsuit should be a wake-up call to healthcare systems that they need to manage their IT networks and digital tools effectively — especially in today’s rapid-fire world of mergers, acquisitions and divestitures. Merging companies often have distinct IT systems and EHRs that need to be integrated.
According to the complaint, CHS "intentionally facilitated the continued use of Microsoft software" by organizations it divested, amounting to infringement of Microsoft copyrights.
Microsoft alerted CHS in October 2016 that an independent auditor would assess the company’s compliance with its software agreements. Over the next 16 months, the auditor repeatedly requested information from CHS — only a "small fraction" of which was provided.
"CHS has been largely not responsive to, if not obstructionist of, Microsoft’s contractual right to an independent verifications," the lawsuit stated. "CHS has been given every opportunity to comply with the independent verification process, and Microsoft has exhausted its best efforts to resolve this matter without judicial intervention. CHS’s pattern of conduct, including missing numerous mutually agreed upon deadlines and providing incomplete data, demonstrates its unwillingness to comply with its contractual obligation and/or with the independent verification process."
The lawsuit asks the judge to permanently bar CHS "and those in active concert of participation with CHS" from using and hosting Microsoft’s copyrighted software. It also seeks to compel CHS to cooperate with the independent auditor and provide the requested data, and petitions for damages in an amount to be determined at trial.