Microsoft sues hospital chain charging breach of obligations

Technology giant seeks judicial help to resolve copyright infringement dispute with Community Health Systems.

Heavily in debt and selling hospitals, Community Health Systems is facing legal action from Microsoft, which filed a suit this week accusing the hospital chain of willful copyright infringement and a breach of contractual obligations, according to the lawsuit.

Microsoft explains that its Volume Licensing Program enables large companies to economically license a significant number of Microsoft products—it offered CHS this program during the past 17 years, it contends.

The technology company contends that it hired an independent auditor to verify CHS compliance with the contractual agreements. Now, based on auditor findings, Microsoft alleges that as CHS began divesting entities, it also intentionally continued to use Microsoft software at the divested entities.

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“Over 16 months later and not withstanding repeated requests from the independent auditor and Microsoft, on information and belief, CHS has produced only a small fraction of the data required for the independent verification process,” the lawsuit states.

Microsoft further accuses CHS of obstructing the company’s right to an independent verification, saying, “Microsoft has exhausted its best efforts to resolve this matter without judicial intervention.”

The suit contends that CHS has missed numerous agreed-upon deadlines, has provided incomplete data and has demonstrated unwillingness to comply with contractual obligations, while continuing unlicensed use of Microsoft’s software.

In the lawsuit, Microsoft seeks a court order prohibiting CHS from continuing to engage in copyright infringement and to pay damages.

CHS did not immediately respond to a request for a statement on the charges alleged in the lawsuit.

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