Nomi Health, a prominent healthcare provider, finds itself entangled in a legal battle and is facing a substantial damages payout of more than $7 million due to allegations of copyright infringement concerning a COVID-19 testing app. The dispute, detailed in a recent report by The Salt Lake Tribune, originated with a lawsuit filed against Nomi Health in 2022 by OSGHD, a software developer based in Texas.
Initially, Nomi had licensed a software platform from OSGHD that facilitated data collection, reporting, result aggregation, and scheduling. The licensed software was used to support the logistical aspects of COVID-19 testing centers established by Nomi in 2020.
OSGHD’s claims assert that Nomi, dissatisfied with the agreed-upon per-test fee, embarked on a covert scheme to develop a copycat software application named ‘Project Tiger’ with the help of another developer named Domo. Allegedly, Nomi illicitly granted Domo access to its application, which Domo then utilized to create a replica of the software. OSGHD contends that Nomi strung them along until a substantial portion of their application was replicated before terminating the contract in April 2022.
The contract between Nomi and OSGHD stipulated that Nomi could develop its application, as long as no part of it relied on OSGHD’s software. OSGHD discovered evidence of the purported scheme by coming across ‘Project Tiger’ documents and even a recorded three-day demonstration for Domo developers while they still had access to Nomi’s system.
Nomi’s COVID-19 testing business reportedly generated substantial revenue over two years through state contracts, thanks in part to OSGHD’s software support.
In response, Nomi counterclaimed that OSGHD had overcharged significantly for software usage and that the software didn’t fully meet their requirements. Nomi stated that due to persistent problems with the application, a significant increase in license fees, and the ongoing need for COVID-19 testing, they decided to develop their software.
However, Nomi subsequently admitted to liability for the contract breach in June. Consequently, the company was ordered to pay over $7 million in damages and legal fees to OSGHD. Nomi has expressed disagreement with this decision and intends to appeal, according to a statement from Debbie Giambruno, in-house general counsel at Nomi Health.
Furthermore, Nomi is facing federal copyright infringement allegations, which could lead to more substantial damages based on the company’s profits. Nomi’s counterclaims assert that OSGHD’s claims are vague and that aspects of the user interface layout aren’t protected under copyright law since they prioritize functionality. Nomi also refuted OSGHD’s claims of fraudulent inducement and “string-along fraud,” asserting that neither Nomi nor Domo had access to OSGHD’s app source code.
Despite the ongoing litigation, Nomi Health remains steadfast in its mission to transform the U.S. healthcare system by simplifying processes, reducing costs, and enhancing access to care.
Founded in 2019 and based in Utah, Nomi Health operates as a direct healthcare purchasing and delivery ecosystem with a focus on cost reduction. The company secured $110 million in funding from investors in late 2021 and boasts over 800 customers across 15 states, according to its website. Its COVID-19 efforts, including administering vaccinations and tests, have drawn both government contract scrutiny and questions regarding testing accuracy.
