Workgroup Tech. Partners, Inc. v. Anthem, Inc.
| Decision Date | 03 February 2016 |
| Docket Number | 2:15-cv-00002-JAW |
| Parties | WORKGROUP TECHNOLOGY PARTNERS, INC., Plaintiff, v. ANTHEM, INC., Defendant. |
| Court | U.S. District Court — District of Maine |
A license to use is not a license to steal.
On January 5, 2015, Workgroup Technology Partners, Inc. (Workgroup) filed a complaint against WellPoint, Inc. (WellPoint). Compl. (Injunctive Relief Sought) (ECF No. 1) (Compl.). Workgroup alleges, among other things, that WellPoint carried out a "fraudulent scheme" and "misappropriate[d] valuable and proprietary intellectual property and trade secrets belonging to Workgroup." Id. ¶ 1. On March 6, 2015, WellPoint filed a consented-to motion to change its party name to Anthem, Inc. (Anthem), and the Court granted the motion on March 9, 2015. Consented-to Mot. to Change Party Name (ECF No. 14); Order (ECF No. 17).
On March 6, 2015, Anthem filed a motion to dismiss. Def. WellPoint, Inc.'s Mot. to Dismiss the Compl. (ECF No. 15) (Def.'s Mot.). Workgroup responded in opposition on March 27, 2015. Pl. Workgroup Tech. Partners, Inc.'s Obj. to Def. Anthem, Inc.'s Mot. to Dismiss (ECF No. 20) (Pl.'s Opp'n). On April 10, 2015, Anthem replied. Def. Anthem, Inc.'s Reply in Supp. of its Mot. to Dismiss the Compl. (ECF No. 23) (Def.'s Reply). On May 18, 2015, Workgroup filed a surreply. Pl. Workgroup Tech. Partners, Inc.'s Surreply to Def. Anthem, Inc.'s Reply in Supp. of its Mot. to Dismiss (ECF No. 30) (Pl.'s Surreply). Anthem responded on May 27, 2015. Anthem's Resp. to Pl.'s Surreply to Anthem's Mot. to Dismiss (ECF No. 31) (Def.'s Resp. to Pl.'s Surreply).
Workgroup is a Maine corporation with its office and principal place of business in Westbrook, Maine. Compl. ¶ 6. Workgroup is an information technology company, which, among other things, develops and licenses software applications to clients in the health insurance industry. Id. ¶ 7. Anthem is an Indiana corporation with its office and principal place of business in Indianapolis, Indiana. Id. ¶ 8. Anthem is in the business of providing and administering health insurance plans. Id. ¶ 9.
Workgroup develops, owns, and licenses business application software that automates a range of business processes, including claims recovery and subrogation for health insurance companies. Id. ¶ 12. This includes software known as iAutomateRecovery CaseManager ("iAutomate"). Id. ¶ 13. This software automates the process of analyzing health insurance claims data and pursues subrogation recovery opportunities against third parties. Id.
iAutomate functions on two server computers: (1) the iAutomate database server, which receives and processes large volumes of raw insurance claim data supplied by Workgroup's licensee and then analyzes the data using complex algorithms to identify potential subrogation recovery opportunities, and (2) an application server, which runs web-based application software that processes data generated by the database server in a user interface with a logical workflow and various tools that help licensed users analyze, manage, and pursue a large volume of subrogation claims. Id. ¶ 14. The database housed on the server ("Database Structure"), and the Claims Data Manager ("CDM"), which is a large package of algorithms and codes that sorts and analyzes raw insurance claims data, generates new analytical results ("Resulting Analytical Outputs") from the raw data and analyzes these outputs to identify potential subrogation recovery opportunities. Id. ¶ 15. The iAutomate web-based application software ("Application Attributes") individually and collectively facilitate iAutomate licensees' efficient analysis, management, and pursuit of subrogation recovery opportunities identified by the database server. Id. ¶ 17. Together, the database and application servers allow licensed iAutomate users to analyze and manage massive volumes of raw claims data and thereby maximize their subrogation recoveries. Id. ¶ 18.
Workgroup designed, developed, and refined iAutomate, including the Database Structure, CDM, Resulting Analytical Outputs, and Application Attributes, over more than fifteen years. Id. ¶ 19. The Database Structure, CDM, Resulting Analytical Outputs, and Application Attributes independently and collectively constitute valuable and proprietary intellectual property and trade secrets belonging to Workgroup. Id. ¶ 21.
On or about December 14, 2003, Anthem entered into a software license ("2003 Software License") with Sextant HealthCost Solutions (SHCS) for a subrogation claim identification software platform known as CaseMate, a predecessor to iAutomate.2 Id. ¶ 22. In March 2008, Anthem and Workgroup entered into a supplement to the 2003 Software License ("2008 Supplement"). Id. ¶ 24. The 2008 Supplement provided that Workgroup licensed iAutomate to Anthem and agreed, among other things, to maintain and service the iAutomate database server and application server on behalf of Anthem. Id. Furthermore, as provided under the 2008 Supplement, Anthem acquired only a right to use iAutomate for Anthem's "normal business purposes." Id. ¶ 25.
Also under the terms of the 2008 Supplement, Anthem is required to maintain certain "Supplier Material" belonging to Workgroup "in strict confidence," and to "usesuch information solely in the course of performing its obligations hereunder, and to make no disclosure of such information except in accordance with the terms of this Agreement." Id. ¶ 27. "Supplier Material" is defined under the 2008 Supplement as all proprietary and/or intellectual property of Workgroup, including, without limitation, web designs, trade secrets, know-how, "software, algorithms, programming techniques, business rules, business methods, inventions, . . . processes, technology and designs," and the 2008 Supplement identifies "Supplier Material" as representing "Confidential Information." Id. ¶¶ 28-29. Workgroup says that the Database Structure, CDM, Resulting Analytical Outputs, and Application Attributes independently and collectively constitute Supplier Material and Confidential Information under the 2008 Supplement. Id. ¶ 31.
According to Workgroup, in approximately 2012, Anthem replaced iAutomate with its own "in-house" subrogation claim identification and recovery solution, a legacy product owned by Anthem known as "Subro 2000." Id. ¶ 32. However, Workgroup believes that because Subro 2000 was written in an outdated program known as "visual basic," or "VB," Anthem needed to rewrite it in a newer programming language, ".NET," in order to be able to use and receive maintenance for the program. Id. ¶¶ 33-34. In addition, Anthem had to "migrate" all raw claims data (except for Resulting Analytical Outputs) housed on the iAutomate database server over to a database server associated with the rewritten Subro 2000 application.Id. ¶ 35. Anthem did not inform Workgroup of the decision to replace iAutomate with Subro 2000 when the decision was made. Id. ¶ 36.
Workgroup alleges that, when compared with iAutomate, Subro 2000 lacked the functionality, scalability, and ability to efficiently process massive volumes of claims data, and therefore, merely rewriting Subro 2000 from VB to .NET programming language would not, in and of itself, address the shortcomings of Subro 2000 relative to iAutomate's unique capabilities. Id. ¶¶ 37, 39. Instead, according to Workgroup, Anthem devised a scheme to misappropriate the valuable and proprietary intellectual property and trade secrets in iAutomate that made it superior to Subro 2000, including the Database Structure, CDM, Resulting Analytical Outputs, and Application Attributes, and to build them into the rewritten .NET version of Subro 2000. Id. ¶ 40. Workgroup alleges that such action on the part of Anthem was not use for "normal business purposes" as contemplated under the 2008 Supplement. Id. ¶ 41. To carry out this scheme, Workgroup claims that Anthem hired Cognizant Technology Solutions (Cognizant), a Workgroup competitor, to "reverse engineer" the valuable and proprietary intellectual property and trade secrets in iAutomate, which Anthem wanted to misappropriate, and then incorporate into a .NET version of Subro 2000. Id. ¶ 42.
Workgroup alleges that Anthem concealed its "scheme" by leading Workgroup to believe that Anthem intended to continue using iAutomate as its principalsubrogation claim identification and recovery solution while secretly giving Cognizant access to all the elements of iAutomate that Anthem wanted to misappropriate and incorporate into the .NET version of Subro 2000. Id. ¶ 44. In approximately April 2013, Anthem issued a request for proposals ("RFP") for a possible replacement to iAutomate. Id. ¶ 45. Before issuing the RFP, Anthem assured Workgroup that the RFP was a mere formality and that Anthem intended to use iAutomate as its principal subrogation claim identification and recovery solution. Id. ¶ 46. Workgroup says that at the time of the RFP, however, Anthem did not tell Workgroup it had hired Cognizant to write a .NET version of Subro 2000 using intellectual property and trade secrets belonging to Workgroup. Id. ¶ 48.
As a licensee, Anthem had the ability to create user accounts that gave users access to the iAutomate web-based application software for "normal business purposes." Id. ¶ 49. On May 20, 2013, Anthem created eight user accounts for Cognizant software engineers, some of whom are based in India, giving them unlimited access to the web-based application; Anthem did not inform Workgroup of this. Id. ¶¶ 50-51.
On May 22, 2013, during a monthly meeting between Anthem...
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