A New Jersey company by the name of LMG 3 Marketing and Development Corp. has filed a patent infringement lawsuit against Apple. The patent infringement lawsuit concerns Apple's HealthKit and Health App. The company, which isn't a patent troll, has two legitimate granted patents on record and has been selling and/or licensing their products to customers like the retailer Target. The two inventors, who were listening to Apple's keynote when Federighi introduced HealthKit and Health App, say that their "surprise turned to disbelief" when Federighi described the new Health App medical records function as "revolutionizing" medical care – when the concept had already been patented by LMG 3. Because this could be an interesting case, our report provides you with as much background as we could from the formal complaint, beyond merely referencing patent numbers, so as to give this case some additional color.

 

Overview of the Case

 

In 2002, Plaintiff LMG 3 Marketing and Development Corporation ("LMG" or "Plaintiff") invented a revolutionary technology to help the chronically ill regain a semblance of their personal freedom. For a person with a serious health condition, travel, family gatherings and even going to work is a risk: in the case of an emergency, he or she might need to receive treatment from an unfamiliar medical team without access to the patient's full medical history. To address this, LMG developed a portable, secure device to store a patient's medical history. What's more, the device could be rapidly accessed by virtually any health care provider in just about any setting so that treatment decisions could be made using all relevant patient data. For its efforts, LMG was awarded two patents (8,195,480 and 8,195,479) by the U.S. Patent and Trademark Office.

 

 

 

So when, in 2014, Apple Inc. ("Apple") Senior Vice President Craig Federighi introduced Apple's Health App and HealthKit products and touted their medical records function as "revolutionizing" medical care, one could imagine LMG's surprise. And when Apple later boasted that its products had been adopted by major health care institutions—some of which LMG had, years earlier, presented its inventions to—that surprise turned to disbelief. LMG had spent over a decade developing, refining and marketing its medical records technology simply to have it coopted by Apple and marketed as yet another of the Silicon Valley giant's game changing breakthroughs.

 

No one asserts that LMG's devices provide the same spectrum of functionality as Apple's multifaceted phones or tablets. But Apple, in its race to enter new markets and incorporate ever more uses for its products, has, through its Health App and HealthKit incorporated LMG's core technology.

 

The Plaintiff's Version of the Facts

 

Being that LMG 3 Marketing and Development isn't a patent troll, I thought it would be of interest to some to read the "Facts" as they were presented in LMG's complaint before the court as follows:

 

The development path that eventually led to the Asserted Patents started with a basic observation by Mr. Lubell and Mr. Moran: generally speaking, the more information medical providers had about a patient's medical history, the more effectively they could treat the patient in routine or emergency medical scenarios. Yet those patients with the most significant health problems often had medical histories comprising thousands of pages of paper records. A patient could not be expected to carry these records to each provider. Thus, in the event of a medical emergency, for example, unless the patient received treatment from a medical team already in possession of his or her medical history, diagnostic and treatment decisions might be made without the benefit of highly relevant medical information.

 

Mr. Lubell and Mr. Moran believed that storing a patient's medical information (including, for example, the patient's list of active prescriptions, diagnoses, drug allergy information, treatment history, diagnostic scan images and insurance data) on a portable nonvolatile memory device could improve the patient's treatment outcomes, cut down on medical mistakes and control health care costs.

 

Storing a patient's medical history on a nonvolatile memory device, however, is only a starting-point for realizing these benefits because medical data is fundamentally distinct from other types of data. Unique legal and technical limitations apply to medical data; storing such data on a portable device exacerbates these limitations.

 

The mandatory patient privacy regime created under the federal Health Insurance Portability and Accountability Act's ('HIPAA') represents one such limitation. HIPAA, among other things, requires that patient medical information be safeguarded against unauthorized access, including any portable device containing a patient's medical history.

 

Another principal limitation relating to storing medical data on a portable nonvolatile memory device stems from the diversity of data management solutions in the medical industry. There is no guarantee that patient data compiled at a large medical institution using sophisticated records management systems will be accessible by the patient's family doctor on the office's retail computer installed with little more than the software included on a basic operating system—or, for that matter, that it would be accessible by another large medical institution using an equally sophisticated but different system.

 

Accordingly, as noted above, making medical records portable is a necessary but insufficient step in ensuring that treatment decisions are made with a comprehensive set of the patient's medical data. To deliver on its potential, any portable medical records storage device would also need to (a) safeguard the stored medical data from unauthorized access, (b) but in such a way that allows authorized users to rapidly access it (c) regardless of the specific record management software and hardware employed by a health care provider.

 

These three requirements can, for present purposes, be referred to, respectively, as the requirements of (a) data security, (b) rapid accessibility and (c) universal compatibility.

 

These requirements represented formidable challenges that, in 2002, no invention had yet been able to fully overcome. 18. Importantly, these challenges were not merely technical or mechanical. Rather, they constituted a development paradox: data security, rapid accessibility and universal compatibility represented objectives that could potentially compete with one another. Put differently, meeting one of these objectives might undermine or subvert the other two objectives.

 

For instance, encrypting a portable device's medical data could potentially safeguard the data from unauthorized access. But later decrypting that data would demand additional steps that would either require prior coordination between the patient and the provider or on-the-fly installation of decryption software by the medical provider in the midst of providing treatment. Thus, facilitating the security of medical data by way of encryption can diminish the rapidity with which that data might be accessed and/or the number of medical providers who could effectively access that data.

 

To elaborate, decrypting the data would involve the medical provider either (a) anticipatorily coordinating with the patient to install decryption software configured to the patient's portable device or (b) initially treating the patient without the benefit of this data until the requisite decryption software can be identified, downloaded, installed and configured to the specific device. In either scenario, the development paradox is triggered: safeguarding the data via encryption can impede rapid access to it and/or its universal compatibility.

 

The first scenario can facilitate data security and rapid deployment, but it fails to facilitate universal compatibility—for the device data to be accessible, the patient's emergency must occur at or near a pre-selected facility(ies); if the patient has an emergency while travelling, he or she is out of luck.

 

On the other hand, the latter scenario secures the data while providing universal compatibility, but at the expense of rapid access: the patient will be undergoing treatment while potentially relevant data waits to be unencrypted by software that needs to be downloaded, configured and installed by his or her health care provider.

 

In the summer of 2002, Mr. Moran and Mr. Lubell approached Mr. Guinta, hoping to develop a portable medical records device and, by extension, to resolve this development paradox. They asked Mr. Guinta to create the software, hardware and overall methods of a system that could securely store personal medical data such that it could be accessed at any facility where the patient might seek treatment, by any medical professional the patient might authorize and with sufficient rapidity that it could be successfully deployed in emergency treatment (as well as other treatment scenarios).

 

After meeting with Mr. Moran and Mr. Lubell, Mr. Guinta began to develop the specific systems, processes, software and other technologies eventually disclosed in the Asserted Patents for a secure, portable medical data storage system.

 

To overcome the development paradox and the conflicting requirements of security, rapid accessibility and universal compatibility, Mr. Moran, Mr. Lubell and Mr. Guinta had to invent a novel technology. Generally speaking, this technology—for which the U.S.Patent Office eventually awarded the Asserted Patents to the Inventors—created a device, system and method to store, access and deploy medical data in a manner that simultaneously safeguarded the data yet allowed medical professionals to universally access and deploy it. One of the ways the Asserted Patents overcame the development paradox is as follows.

 

First, data security would be provided by way of software contained on the device that would encrypt the device's stored medical data. In order to ensure that encrypting the data did not subvert a medical provider's ability to rapidly access it, the device carried on it a parallel decryption algorithm. As such, medical providers would not typically need to download, install and/or maintain on their systems special software to unencrypt and access the device's data.

 

Accordingly, because the device's data encryption and decryption mechanisms were self-contained, the device could maintain security without undermining the rapid accessibility and universal compatibility requirements. To access and deploy the device's medical data, the patient's treatment team would generally only need to plug the device into one of the medical facility's computers. In this way, fulfilling the data security requirement, far from undermining the objectives of universal accessibility and rapid deployment, could actually further them.

 

Second, the Asserted Patents facilitated universal compatibility by storing on the device all software needed to display the stored medical data; in other words, the device's data could be accessed and displayed on virtually any computer system at any medical facility using only the device's self-contained access and display software. Thus, the device's self-contained access and display software sidestepped the inherent interoperability issues noted above that arise from the myriad bespoke and incompatible medical recordkeeping platforms and computer systems employed by different medical facilities. The medical data on the device could be universally accessed, regardless of the medical facility; the device's utility would not be limited to use at a single, pre- identified medical facility near the patient's home with computers specifically preconfigured to access the data. A patient carrying the device would be free to travel with a reasonable assurance that, in the event of a medical emergency, any treatment facility would have the benefit of the patient's stored medical data to quickly deploy it and improve medical outcomes.

 

Similarly, rapid accessibility of the medical data would be possible as there would generally be no need for the health care facility's computer system to identify, search for, download and configure drivers before accessing the device's data. The drivers necessary to access the device were already installed on the device.

 

By late 2002, Mr. Guinta, alongside Mr. Moran and Mr. Lubell, had developed a fully functional system (including the portable device and related software) embodying, in part, the Asserted Patents. This prototype was named MyRECS™. The MyRECS™ device could securely store on its nonvolatile memory, among other things, a patient's allergy information, emergency contact details, medication regimen, surgical history, immunization records, medical alerts, medical conditions, insurance information, treatment history and contact details for the patient's physician(s).

 

The Asserted Patents and their subsequent embodiment in the MyRECS™ device represented a leap in the field of portable health information devices and systems: at last, a portable medical-information storage technology had been disclosed which encrypted a patient's sensitive medical data, thus facilitating compliance with applicable patient privacy laws and, at the same time, allowing for that data to be rapidly unencrypted and accessed by virtually any health care provider on any computer.

 

The development paradox of meeting conflicting security, access and compatibility requirements was essentially overcome. Put more simply, patient medical data on the device could be at once be protected from unauthorized access, made universally accessible to those authorized to view it and allow for rapid deployment of the data to improve diagnosis and treatment outcomes. The Inventors have assigned their rights to the Asserted Patents to their company, Plaintiff LMG.

 

By December 2002, Plaintiff initiated its efforts to market and sell devices embodying some or all of the claims in the Asserted Patents. Thereafter, Plaintiff developed further devices embodying the Asserted Patents, including the MyPMR™ device ("PMR" is an abbreviation for "Personal Medical Record").

 

LMG contracted with a major electronics manufacturer to produce devices embodying the Asserted Patents. The devices were manufactured in China and imported to the United States for resale.

 

Since 2003, LMG has promoted the relevant inventions and technologies in meetings and presentations with executives from some of the most familiar players in the U.S. health care industry, including major health insurers and public-sector entities.

 

LMG offers its devices for sale through various distribution channels, including eBay.

 

In 2005, LMG entered into an agreement with a domestic commercial reseller to target sales of the devices to emergency medical technicians.

 

Further, LMG has engaged marketing and distribution consulting resources to augment its sales efforts.

 

LMG has attempted to raise additional capital from prospective investors to continue developing devices and technologies embodying the Asserted Patents, including claims relating to transmission of medical data stored on the devices via the Internet.

 

Apple's Infringement

 

Defendant Apple's iPhone is a portable, hand-carried device that allows users to record, update and access their medical history on the device's nonvolatile memory via Apple's Health application (the "Health App") and its accompanying development platform, the Apple HealthKit ("HealthKit", collectively with the Health App, the "Apple Health").

 

Upon information and belief, the Health App comes preinstalled on Defendant Apple's iPhone 6 and iPhone 6 Plus (the Health App can also be integrated on, among other of defendant's products, the iPhone 4S, iPhone 5, iPhone 5S or iPod Touch).

 

In introducing Apple Health at a developer's conference in 2014, Defendant asserted that Apple Health represented a novel system to store a patient's comprehensive medical history on a portable device.

 

More specifically, during the 2014 event, Apple outlined and claimed to have resolved the very development paradox Plaintiff LMG had successfully overcome in 2002 and 2003, in essentially the same way LMG had. (That development paradox, as described supra, stems from the unique limitations of storing medical information on a portable device because of the often competing objectives of (a) data security, (b) universal compatibility and (c) rapid accessibility.)

 

As Apple's Senior Vice President Craig Federighi ("Mr. Federighi") asserted during the 2014 event: "developers have created a vast array of healthcare devices and accompanying applications, everything from monitoring your activity level, to your heart rate, to your weight, and chronic medical conditions like high blood pressure and diabetes, but up to now the information gathered by those applications lives in silos. You can't get a single comprehensive picture of your health situation. But now you can with HealthKit. HealthKit provides a single place that applications can contribute to a composite profile of your activity and health." [Emphasis added by LMG]

 

Just as LMG had discovered in 2002, Defendant, in developing Apple Health, realized that a major stumbling block in collecting a person's comprehensive health record on a portable device was the multiplicity of electronic systems used by patients and health care providers to record and access health-related data. As Apple engineer Justin Rushing told a group of software developers attending the 2014 event, "[t]his makes it really hard for our users to get a cohesive view of their current health."

 

Mr. Rushing then elaborated. He noted that, with respect to Apple's portable devices, prior to the introduction of the Health App and HealthKit, the few available software platforms "that can share data have to write all sorts of custom code to do so"—a situation that, as described above in the context of the disparate electronic medical records platforms used by health providers, undermined two of the three objectives in a portably storing a patient's health data (i.e., ensuring that the patient's health records were (a) rapidly accessible by (b) all of the patient's health care providers, regardless of the providers' electronic records platform.

 

Mr. Federighi's introductory remarks likewise acknowledged this issue. Noting that a patient's electronic medical records are often scattered amongst a variety of sources that are not interoperable or compatible, Mr. Federighi claimed that "you can't get a single comprehensive picture of [a patient's] health situation. But now you can with HealthKit."

 

Concluding his remarks, Mr. Federighi noted that Apple was "working with the Mayo Clinic" and other "leading institutions" to integrate Apple Health into their systems to enable patients "to get closer in sharing their information with their doctors and that is [the] Health [App]."

 

With respect to data security, Mr. Rushing described how, in developing Apple Health, Defendant recognized that "health data is really sensitive to many of our users" and integrated into the Health App features to achieve this objective. Apple's 2014 marketing materials tout Apple Health's data security features: "[w]hen your phone is locked with a passcode or Touch ID, all of your health and fitness data in the Health app is encrypted."

 

Accordingly, a full decade after Plaintiff LMG had first developed and begun to market products embodying the revolutionary technology disclosed in the Asserted Patents, Defendant boasted that Apple Health represented a game-changer for the healthcare industry.

 

Mr. Federighi declared: "Now we think this is going to be really important for healthcare and the CEO of the Mayo Clinic agrees. He says that, 'We believe Apple's HealthKit will revolutionize the health industry [and] how the health industry interacts with people. We're proud to be at the forefront of this innovative technology with the Mayo Clinic app.' We agree."

 

But despite Mr. Federighi's proclamation, the only "revolution" at work was that big players in the electronic and health industries had finally woken up to the patient-records crisis described in the Asserted Patents. And when they did, they sought to address that crisis using the same technology and solutions Plaintiff LMG had already patented and was busy marketing.

 

Indeed, years before the introduction of the Health App and HealthKit, Plaintiff LMG had reached out to some of the very medical institutions that Apple now touts as early adopters of its HealthKit platform.

 

For instance, in August 2012, LMG contacted the president and CEO of Duke University Health System ("DUHS"), Dr. Victor Dzau, in the hope of licensing LMG's Asserted Patents to DUHS. LMG informed DUHS about its technologies practicing the Asserted Patents, attached the Asserted Patents, noted that DUHS's "medical software would greatly benefit from [LMG's] technology as would your patients" and observed that DUHS's "medical information systems might be a candidate for licensing [LMG's] technology for a personal portable medical records carrier that would integrate with [DUHS's] EMR [i.e., electronic medical records] and hospital software."

 

Plaintiff never reached an agreement with DUHS to integrate the portable medical records technology disclosed in the Asserted Patents. But more than two years later, in February 2015, LMG was surprised to hear that DUHS and other medical institutions had entered into agreements with Apple to integrate this very technology into their electronic patient records systems.

 

The patent infringement case presented in today's report was filed late on Thursday in the New Jersey District Court, Newark Office. The Presiding Judge in this case is noted as being Judge William H. Walls, with the Referring Judge noted as Cathy L. Waldor.

 

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