The big news in the telehealth space this week was the letter from Teladoc to Amwell on September 14, 2020 claiming that Amwell was infringing on Teladoc’s patents. These cease and desist letters are common in the patent world since part of having a patent is enforcing it when someone infringes upon it. Teladoc asked for Amwell to cease infringement of their patent by September 18, 2020 or they’d move forward with enforcement of its patents against Amwell.
As background, Teladoc acquired these patents as part of their nearly $600 million acquisition of InTouch Technologies. The patents largely revolve around a mobile robot cart with a camera system and some of the peripherals like the digital scope system.
While Amwell likely can’t make many public statements because of their recent IPO, they did file this report with the SEC which talks about potential patent infringement risk. In it, they said that they believe the claims by Teladoc lack merit and if brought to court that they would “defend against them vigorously.” Then, they added the following point about the risk of this potential patent infringement lawsuit:
“Moreover, even if we were found to infringe upon any valid claim of these patents, our revenues from the Carepoints products approximated 5% of our revenues in 2019.”
This isn’t the first time that Amwell and Teladoc have tangled over patent infringement. In 2015 Amwell claimed that Teladoc had infringed on their telehealth patents. In 2016, a Massachusetts federal court dismissed the suit and ruled that Amwell’s patents were too abstract to be patentable and did not amount to an inventive concept.
In celebration of the ruling, Teladoc issued this press release where Jason Gorevic, CEO of Teladoc, ironically said “We are delighted the court has ruled in our favor in this important case. Teladoc challenged these patents because we believe telehealth is a fundamental part of the modern health care system. Access to high-quality health care is too important, too broad and too obvious to be patented.” I guess mobile carts and peripherals don’t count as being “too broad” or “too obvious.” Or maybe this is just the start of the corporate battle for telehealth market share.
In my view, there’s no doubt this is just the beginning of the battles between two of the leaders in the telehealth space. Possibly even a calculated effort by Teladoc right before the Amwell IPO. The good news for Amwell is their recent $100 million investment by Google Cloud will provide them to access to Google’s attorneys who are very familiar with patent battles between large organizations. Look at the previous patent war chests that Google and Apple have created in a kind of nuclear arms race style battle over patents that has sometimes led to patent claims against each other. Not that Amwell and Teladoc will be that big, but if I’m Amwell, I’d be grateful to have connections to Google who’s been through this a lot before. In fact, Google may be able to use their stockpile of patents in the fight.
As telehealth finds its spot in healthcare, we’re sure to see more battles between Teladoc and Amwell. Hard to imagine any enterprise health system telehealth deal that doesn’t at least consider these two companies. This is just an early battle in the ongoing war to come.
