Health IT, Legal

Allscripts gets into trademark tussle during sale of CarePort

The health IT company filed a lawsuit against telemedicine startup CarePortMD as it looks to sell its similarly named post-acute care subsidiary.

As it prepares to sell subsidiary CarePort Health for $1.35 billion, Allscripts has gotten into a legal scuffle with a similarly named startup. On Thursday, the company filed a trademark infringement lawsuit against CarePortMD, a Delaware-based telemedicine and urgent care startup.

The feud dates back to 2019, when Allscripts sent a cease and desist letter to CarePortMD, according to a complaint filed in the U.S. District Court for the District of Delaware. But after months of back-and-forth negotiating, the two companies still couldn’t reach an agreement.

According to the lawsuit, CarePortMD started using the name in 2018. It offers telemedicine services, and operates a chain of urgent care locations in Delaware and Pennsylvania. It also offers diabetes screening and supplies in grocery stores across Delaware, such as Safeway.

Allscripts’ subsidiary, CarePort Health, helps connect hospitals and post-acute providers. For example, it helps manage the transfer of patients to nursing homes and other post-acute services. Allscripts acquired the company in 2016.

In the lawsuit, Allscripts claims that CarePortMD’s name is “highly likely” to cause confusion with CarePort Health, “because CarePortMD’s services are directed to healthcare services, including without limitation telemedicine services through an online platform, which are similar to or conflict with Allscripts’ healthcare software services, also offered via an online platform.”

In addition to having CarePortMD stop using the name, Allscripts is seeking treble damages for trademark infringement.

At the same time, Allscripts has been selling off several of its subsidiaries as the health IT company tries to trim its costs. It recently closed the sale of subsidiary EPSi for $365 million, and plans to sell CarePort Health to Overland Park, Kansas-based health IT company WellSky for $1.35 billion, according to a recent filing.

The businesses should complement each other well, as WellSky specializes in solutions for post-acute care.

“Together with CarePort, WellSky will establish new, meaningful connections between historically disparate settings of care. We have the exciting opportunity to bring care coordination to more providers in service of delivering more informed, personalized care,” WellSky CEO Bill Miller said in a news release. “Through this agreement, we’re ensuring our clients have the intelligent technology they need to do right by their patients, collaborate with payers, and succeed in value-based care models.”

The deal is expected to close before the end of 2020.

Photo credit: zimmytws, Getty Images