CHS sued by Microsoft over alleged copyright infringement
Microsoft has filed a lawsuit against for-profit hospital giant Community Health Systems (CHS), claiming CHS unlawfully helped hospitals it was selling to continue using Microsoft software.
The suit, filed in federal court in March 2018 and first reported by the Nashville Post, dealt with Microsoft’s volume licensing program for large corporate customers which use many Microsoft products. In the case of CHS, this included several server and data center products along with multiple versions of Microsoft Office.
The terms of the agreements allow Microsoft to hire an independent auditor to determine whether the software is being used only by those which fall under the corporate license. When CHS began divesting facilities in 2016, Microsoft has alleged it “intentionally facilitated the continued use of Microsoft software” by those entities leaving the company. Since Microsoft brought in Deloitte as the auditor in October 2016, tech company said CHS has shown an “unwillingness to comply with its contractual obligation.”
“CHS has been willfully infringing Microsoft’s copyrights through direct or indirect extensive, unlicensed use of Microsoft’s software,” the suit said.
CHS has so far sold off 30 hospitals in its divesture push, though declining revenue and inpatient admissions have continued to put financial pressure on the company. As hospitals were sold, the suit said CHS failed to request to Microsoft that it transfer the software license from CHS to the entity’s new owner. Without Microsoft’s permission, those divested facilities don’t have any rights to use the software licensed through CHS, according to the complaint.
The suit doesn’t specify which former CHS facilities have allegedly continued to use Microsoft software without a license. It did lay out a long list of allegations where CHS supposedly stymied or ignored Microsoft and Deloitte’s attempts to verify its software activities, missing multiple deadlines to provide data.
“CHS’s conduct to date demonstrates it is: (i) infringing Microsoft’s Copyrights; (ii) trying to conceal such infringement; (iii) knows about and is contributing to others’ infringement of Microsoft’s rights; (iv) acting in bad faith; and (v) has no intention of complying with its contractual obligations,” the suit alleged.
CHS has until May 7 to respond to the lawsuit. Microsoft has requested a case management conference sometime in early June.
John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.