Microsoft has filed a lawsuit against Franklin, Tennessee-based Community Health Systems, claiming the hospital operator allowed its divested entities to use Microsoft’s software.
The complaint says the suit centers around CHS’ “willful copyright infringement and willful breach of its contractual obligation and implied covenant of good faith and fair dealing.”
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According to the lawsuit, Microsoft and CHS have entered into license agreements for numerous software products over 17 years. The overarching agreement between the companies says CHS can’t “distribute, sublicense, rent, lease, lend, or host any Microsoft software,” the complaint states. Additionally, the terms say the Redmond, Washington company has the right to verify that CHS is complying with the set conditions.
In 2016, CHS started divesting some of its facilities. It allowed these entities to continue using Microsoft’s software, the lawsuit claims.
Microsoft says it told CHS it planned to exercise its right to verify licensing and contract compliance in late 2016. But despite requests, over the course of 16 months, CHS has only handed over “a small fraction of the data” needed for the verification process, according to the suit.
The complaint reads:
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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 obligations and/or with the independent verification process.
Microsoft asks for damages in an amount to be determined at trial, and that the court prohibit CHS from engaging in copyright infringement. Additionally, the tech giant requests that the hospital operator hand over the data needed to measure CHS’ software use and that CHS complies with an auditor’s on-site inspection.
Community Health Systems did not immediately respond to a request for comment.
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