IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

MARSHALL DIVISION

HOSPITAL SYSTEMS CORPORATION, §

§
PLAINTIFF, §
§
V. §
§ CIVIL ACTION NO. 2:10-CV-66
DIAMEDX, INC. D/B/A SIMMS; ERAD, §
INC.; ERAD SERVICES, INC.; CERNER §
CORPORATION; DR SYSTEMS, INC.; §
JURY TRIAL DEMANDED
INTUITIVE IMAGING INFORMATICS, §
LLC., SOFTMEDICAL INC., PC §
CONSULTANT GROUP, INC.; AND §
SEPPI TECHNOLOGY ASSOCIATES LLC §
§
DEFENDANTS. §
§

PLAINTIFF’S ORIGINAL COMPLAINT

Plaintiff Hospital Systems Corporation (“Hospital Systems” or

“HSC”), by and through its attorneys, for its Original Complaint against Defendants Diamedx,

Inc. d/b/a SIMMS (“SIMMS”); eRAD, Inc. and eRAD Services, Inc. (collectively, “eRAD”);

Cerner Corporation (“Cerner”); DR Systems, Inc. (“DR Systems”); Intuitive Imaging

Informatics, LLC (“I3”); Softmedical Inc. (“Softmedical”); PC Consultant Group, Inc.

(“PCCG”); and Seppi Technology Associates LLC (“Seppi”) (collectively, the “Defendants”)

and demanding trial by jury, hereby alleges as follows:

I. NATURE OF THE ACTION

1. This is a patent infringement action to end Defendants’ unauthorized and

infringing manufacture, use, sale, offering for sale and/or importation of methods and products

incorporating Plaintiff Hospital Systems’ patented inventions.

 2. Hospital Systems is the exclusive licensee and owner of all substantial rights and

interest in and to: United States Patent No. 5,321,520, issued on June 14, 1994 for “Automated

High Definition/Resolution Image Storage, Retrieval and Transmission System” (the “‘520

patent,” a copy of which is attached as Exhibit 1), and United States Patent No. 5,416,602,

issued on May 16, 1995, for “Medical Image System with Progressive Resolution” (the “‘602

patent,” a copy of which is attached as Exhibit 2) (collectively, the “Patents”).

3. Each of the Defendants manufactures, provides, sells, offers for sale, imports

and/or distributes infringing Picture Archiving and Communications Systems (“PACS”); and/or

induces others to use its PACS products and services in an infringing manner; and/or contributes

to the use of infringing PACS products and services by others.

4. Plaintiff Hospital Systems seeks damages and prejudgment interest for

Defendants’ past infringement of the Patents. Plaintiff Hospital Systems further seeks injunctive

relief to prevent Defendants from continuing infringement of Plaintiff’s valuable patent rights.

5. This is an exceptional case, and Hospital Systems is entitled to damages,

enhanced damages, attorneys’ fees, costs and expenses.

II. THE PARTIES

6. Plaintiff Hospital Systems Corporation is a corporation organized and existing

under the laws of the State of Delaware, with its principal place of business located at 500

Newport Center Drive, 7th Floor, Newport Beach, California, 92660.

7. Defendant Diamedx, Inc. d/b/a SIMMS is a Canadian corporation. SIMMS has

its principal place of business located at 243 College Street, Suite 100, Toronto, Ontario, M5T

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1R5, Canada. Defendant SIMMS conducts business within the State of Texas but has not

designated an agent for service of process in this State. Accordingly, Defendant SIMMS can be

served with process by serving its registered agent for service of process at 243 College Street,

Suite 100, Toronto, Ontario, M5T 1R5, Canada.

8. Defendant eRad Services, Inc. is a Pennsylvania corporation with a place of

business located at 1511-1525 Hamilton Road, Allentown PA, 18102-39. Defendant eRad

Services, Inc. conducts business within the State of Texas but has not designated an agent for

service of process in this State. Accordingly, eRad Services, Inc. can be served with process by

serving its President, Peter Karoly, 1511-1525 Hamilton Road, Allentown PA, 18102-39.

9. Defendant eRad, Inc. is a South Carolina corporation with a place of business

located at 9 Pilgrim Road, Greenville, South Carolina 29607. Defendant eRad, Inc. conducts

business within the State of Texas but has not designated an agent for service of process in this

State. Accordingly, eRad, Inc. can be served with process by serving its registered agent for

service of process, Roy Miller, 1511-1525 Hamilton Road, Allentown PA, 18102-39.

10. Defendant Cerner Corporation is a Delaware corporation with a place of business

located at 2800 Rockcreek Parkway, Kansas City, Mo. 64117. Defendant Cerner can be served

with process by serving its registered agent for service of process at The Corporation Trust

Company, Corporation Trust Center 1209 Orange Street, Wilmington, DE 19801.

11. Defendant DR Systems, Inc. is a California corporation with its principal place of

business located at 10140 Mesa Rim Road, San Diego, California 92121. Defendant DR

Systems can be served with process by serving its registered agent for service of process Rick

Porritt, 10140 Mesa Rim Rd., San Diego CA 92121.

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 12. Defendant I3 is a Nevada corporation with a place of business located at 30

Hackamore Lane, Ste. 6, Bell Canyon, California 91307. Defendant I3 can be served with

process by serving its registered agent for service of process at Incorp Services, Inc., 375 N

Stephanie St Ste 1411, Henderson, NV 89014-8909.

13. Defendant Softmedical Inc. is a Canadian corporation. Softmedical has its

principal place of business located at 1130 Lepine, Saint-Laurent Stn., Quebec H4L 4V4,

Canada. Defendant Softmedical conducts business within the State of Texas but has not

designated an agent for service of process in this State. Accordingly, Defendant Softmedical can

be served with process by serving its registered agent for service of process at 1130 Lepine,

Saint-Laurent Stn., Quebec H4L 4V4, Canada.

14. Defendant PCCG is a Florida corporation with a place of business located at 2750

Coral Way Ste 204, Miami, FL 33145. Defendant PCCG can be served with process by serving

its President, Carter J. Posner, at 2750 Coral Way Ste 204, Miami, FL 33145.

15. Defendant Seppi is a Texas corporation with a place of business located at 4747

Research Forest Dr., Suite 180-317; The Woodlands, Texas 77381. Defendant Seppi n be served

with process by serving Jeffrey S. Seppi Sr., 4747 Research Forest Dr., Suite 180-317; The

Woodlands, Texas 77381.

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 III. JURISDICTION AND VENUE

16. This is an action for patent infringement which arises under the Patent Laws of

the United States, in particular, 35 U.S.C. §§271, 281, 283, 284 and 285. This Court has

jurisdiction over the subject matter of this action under 28 U.S.C. §§1331 and 1338(a).

17. This Court has personal jurisdiction over each of the Defendants, and venue is

proper in this Court pursuant to 28 U.S.C. §§1391(b), (c) and 1400.

IV. PLAINTIFF’S PATENTS

18. The Patents disclose a medical image storage, retrieval and transmission system

and method for providing simultaneous automated access to a common database by a plurality of

remote subscribers upon request. The database may include medical images such as digitized X-

ray images. The remote site requests selective transmission of the requested digitized

information from the image data storage and retrieval subsystem to the requesting visual display

terminal for conversion to a visual image at the remote site.

19. Hospital Systems has obtained all substantial right and interest to the Patents,

including all rights to recover for all past and future infringements thereof.

V. DEFENDANTS’ ACTS

SIMMS

20. SIMMS manufactures, provides, sells, offers for sale and/or distributes infringing

PACS systems. The infringing SIMMS PACS systems include, but are not limited to, systems

marketed under the names SIMMS PACS and related products. SIMMS provides services,

specifications and instructions for the installation and operation of such systems to its customers.

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 21. Through its actions, SIMMS has infringed the Patents and actively induced others

to infringe and contributed to the infringement by others of the Patents throughout the United

States.

22. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted SIMMS a license or any other right to make, use, offer for sale, sell or import

the invention defined by the claims of the Patents.

23. Hospital Systems has been and will continue to suffer damages as a result of

Defendant SIMMS’s infringing acts unless and until enjoined.

eRAD

24. eRAD manufactures, provides, sells, offers for sale and/or distributes infringing

PACS systems. The infringing eRAD PACS systems include, but are not limited to, systems

marketed under the name eRAD PACS and related products. eRAD provides services,

specifications and instructions for the installation and operation of such systems to its customers.

25. Through its actions, eRAD has infringed the Patents and actively induced others

to infringe and contributed to the infringement by others of the Patents throughout the United

States.

26. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted eRAD a license or any other right to make, use, offer for sale, sell or import

the invention defined by the claims of the Patents.

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 27. Hospital Systems has been and will continue to suffer damages as a result of

Defendant eRAD’s infringing acts unless and until enjoined.

Cerner

28. Cerner manufactures, provides, sells, offers for sale and/or distributes infringing

PACS systems. The infringing Cerner PACS systems include, but are not limited to, systems

marketed under the name ProVision PACS, ProVision Web and related products. Cerner

provides services, specifications and instructions for the installation and operation of such

systems to its customers.

29. Through its actions, Cerner has infringed the Patents and actively induced others

to infringe and contributed to the infringement by others of the Patents throughout the United

States.

30. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted Cerner a license or any other right to make, use, offer for sale, sell or import

the invention defined by the claims of the Patents.

31. Hospital Systems has been and will continue to suffer damages as a result of

Defendant Cerner’s infringing acts unless and until enjoined.

DR Systems

32. DR Systems manufactures, provides, sells, offers for sale and/or distributes

infringing PACS systems. The infringing DR Systems PACS systems include, but are not

limited to, systems marketed under the name Unity, Web Dominator and related products. DR

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Systems provides services, specifications and instructions for the installation and operation of

such systems to its customers.

33. Through its actions, DR Systems has infringed the Patents and actively induced

others to infringe and contributed to the infringement by others of the Patents throughout the

United States.

34. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted DR Systems a license or any other right to make, use, offer for sale, sell or

import the invention defined by the claims of the Patents.

35. Hospital Systems has been and will continue to suffer damages as a result of

Defendant DR Systems’ infringing acts unless and until enjoined.

I3 – Intuitive Imaging Informatics

36. I3 manufactures, provides, sells, offers for sale and/or distributes infringing PACS

systems. The infringing I3 PACS systems include, but are not limited to, systems marketed

under the name ImageQube Web-based PACS, Rational Imaging PACS and related products. I3

provides services, specifications and instructions for the installation and operation of such

systems to its customers.

37. Through its actions, I3 has infringed the Patents and actively induced others to

infringe and contributed to the infringement by others of the Patents throughout the United

States.

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 38. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted I3 a license or any other right to make, use, offer for sale, sell or import the

invention defined by the claims of the Patents.

39. Hospital Systems has been and will continue to suffer damages as a result of

Defendant I3’s infringing acts unless and until enjoined.

Softmedical

40. Softmedical manufactures, provides, sells, offers for sale, imports and/or

distributes infringing PACS systems. The infringing Softmedical PACS systems include, but are

not limited to, systems and software marketed under the names RIS FLO System, PACS FLO

System, FLO Scanner, Report FLO, FLO-Workstation, FLO-Burner, Web-FLO, HER-FLO-

Viewer, Proxy, and all other versions, variations and components of the RIS/PACS FLO System.

Softmedical provides related services, specifications and instructions for the installation and

operation of such systems to its customers.

41. Through its actions, Softmedical has infringed the Patents and actively induced

others to infringe and contributed to the infringement by others of the Patents throughout the

United States.

42. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted Softmedical a license or any other right to make, use, offer for sale, sell or

import the invention defined by the claims of the Patents.

43. Hospital Systems has been and will continue to suffer damages as a result of

Defendant Softmedical’s infringing acts unless and until enjoined.

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 PCCG

44. PCCG manufactures, provides, sells, offers for sale and/or distributes infringing

PACS systems. The infringing PCCG PACS systems include, but are not limited to, systems

marketed under the name PCCG Web-PACS, PCCG Enterprise PACS and related products.

PCCG provides services, specifications and instructions for the installation and operation of such

systems to its customers.

45. Through its actions, PCCG has infringed the Patents and actively induced others

to infringe and contributed to the infringement by others of the Patents throughout the United

States.

46. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted PCCG a license or any other right to make, use, offer for sale, sell or import

the invention defined by the claims of the Patents.

47. Hospital Systems has been and will continue to suffer damages as a result of

Defendant PCCG’s infringing acts unless and until enjoined.

Seppi

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 48. Seppi manufactures, provides, sells, offers for sale and/or distributes infringing

PACS systems. The infringing Seppi PACS systems include, but are not limited to, systems

marketed under the name sepStream EMR/RIS/PACS Solutions and related products. Seppi

provides services, specifications and instructions for the installation and operation of such

systems to its customers.

49. Through its actions, Seppi has infringed the Patents and actively induced others to

infringe and contributed to the infringement by others of the Patents throughout the United

States.

50. Neither Hospital Systems nor any of its predecessors in interest in and to the

Patents has granted Seppi a license or any other right to make, use, offer for sale, sell or import

the invention defined by the claims of the Patents.

51. Hospital Systems has been and will continue to suffer damages as a result of

Defendant Seppi’s infringing acts unless and until enjoined.

COUNT ONE
PATENT INFRINGEMENT

52. Plaintiff Hospital Systems realleges and incorporates herein paragraphs 1-51.

53. Defendants have infringed the Patents.

54. Defendants have indirectly infringed the Patents by inducing the infringement of

the Patents and contributing to the infringement of the Patents.

55. Upon information and belief, Defendants have jointly infringed the Patents.

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 56. Defendants’ aforementioned acts have caused damage to Hospital Systems and

will continue to do so unless and until enjoined.

VI. REQUEST FOR RELIEF

WHEREFORE, Plaintiff Hospital Systems respectfully requests that the Court:

A. Permanently enjoin each Defendant, its agents, servants and

employees, and all those in privity with each Defendant or in
active concert and participation with any of the Defendants, from
engaging in acts of infringement of the Patents;

B. Award Plaintiff Hospital Systems past and future damages together

with interest to compensate for the infringement by Defendants of
the Patents in accordance with 35 U.S.C. §284, and increase such
award by up to three times the amount found or assessed in
accordance with 35 U.S.C. §284;

C. Declare this case exceptional pursuant to 35 U.S.C. §285; and

D. Award Plaintiff Hospital Systems its costs, disbursements,

attorneys’ fees, pre and post-judgment interest and such further and
additional relief as is deemed appropriate by this Court.

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 Respectfully submitted,

________________________
Eric M. Albritton
Texas State Bar No. 00790215
Adam A. Biggs
Texas State Bar No. 24051753
Debra Coleman
Texas State Bar No. 24059595
Matthew C. Harris
Texas State Bar No. 24059904
ALBRITTON LAW FIRM
P.O. Box 2649
Longview, Texas 75606
Telephone: (903) 757-8449
Telecopier: (903) 758-7397
ema@emafirm.com
aab@emafirm.com
drc@emafirm.com
mch@emafirm.com

Andrew G. DiNovo
Texas State Bar No. 00790594
Adam G. Price
Texas State Bar No. 24027750
DiNovo Price Ellwanger & Hardy LLP
7000 N. MoPac Expressway, Suite 350
Austin, Texas 78731
Telephone: (512) 539-2626
Telecopier: (512) 539-2627

Counsel for Plaintiff

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