The dispute focuses on alleged modifications to Philips ultrasound systems. (Philips Photo)

Seattle-area medical device repair company Summit Imaging is denying accusations of hacking and stolen trade secrets in a court battle with healthcare giant Philips.

In recent court filings, Summit Imaging asks a federal judge in Seattle to dismiss all claims made by Philips in a lawsuit filed in October. Philips alleged that Summit built software designed to hack into its ultrasound machines and other devices as a way to get around stringent access controls regulating how the hardware can be used.

Summit disputes the characterization of its repair method as “hacking,” and denies that it distributes or makes copies of modified Philips ultrasound systems. The 14-year-old company, based in Woodinville, Wash., accuses Philips of engaging in anti-competitive and exclusionary conduct, as well as misusing copyrights.

“Philips has recognized that consumers’ preference for Summit’s services in the market for repair and maintenance services of Philips Ultrasound Machines will negatively impact Philips’ ability to generate revenue in this market,” Summit says in a court filing.

The suit alleges that Summit touts its approach as a legal way to sidestep restrictions that companies such as Philips put on their devices, as part of Summit’s sale of software to hospitals, healthcare networks, clinics, manufacturers and others. Philips alleges that Summit is not authorized “to tamper with the proprietary software to enable features without Philips’ permission,” according to the lawsuit (embedded below).

“Summit’s hacking and tampering modifies Philips’ copyright protected software to create ultrasound systems in configurations Philips has never sold or supported,” the lawsuit reads. “These modifications give Summit and its customers unlawful access to Philips proprietary software, trade secrets, and enables Summit and/or its customers to force compatibility and interoperability between Philips medical imaging devices and related hardware devices.”

Summit Imaging CEO Lawrence Nguyen. (Summit Imaging Photo)

The legal battle is part of an ongoing debate over “Right to Repair” in the healthcare industry, which has parallels to rules around consumer electronics repair guidelines. More than 300 healthcare professionals signed a letter last month asking state lawmakers to remove barriers to repairing medical equipment.

“Keeping equipment working under the stress of the COVID-19 pandemic is a matter of life and death,” said Nathan Proctor, the Right to Repair campaign director for the U.S. Public Interest Research Group, in a statement. “This is no time to squeeze hospitals into paying extra for proprietary repairs.”

Philips accuses Summit of misappropriating trade secrets, false advertising, modifying copyrighted materials and copyright infringement, among other claims. The Netherlands-based conglomerate is seeking the return of its trade secrets, financial damages, and an order barring Summit from using tools that allegedly skirt its hardware controls.

Summit CEO Lawrence Nguyen, a veteran of companies including AT&T and Microsoft, launched the company in 2006.

“For 13 years, Summit Imaging has been a trusted and valued partner of thousands of North American healthcare providers,” Nguyen said in a statement to GeekWire. “The patented technology and other intellectual property we have developed over many years are specifically focused on providing exceptional customer satisfaction and improving patient outcomes.

“Properly leveraging technology to enable healthcare providers to deliver their medical services in a financially viable form should be the goal of every service provider in this industry,” he added. “Disturbing companies like Summit Imaging is anti-competitive and adverse to the needs of healthcare providers and the patients they seek to serve.”

Summit employs 38 people. It has not raised outside funding. Its chairman is Enrique Godreau, a longtime Seattle entrepreneur and investor who co-founded Voyager Capital in 1996.

“Since 2006, Larry and his team have built a self-funded, capital-efficient, customer-focused business that has been profitable since its inception and focused on helping healthcare providers gain greater control over their medical imaging equipment,” Godreau said in a statement.

Philips, with a market value of more than $40 billion, is an influential player in the development, manufacturing, and sale of medical imaging equipment to hospitals and medical centers. The company’s healthcare division has an office in Bothell, Wash., just a few miles away from Summit. The Seattle region has been a longtime hotbed for ultrasound innovation.

“We can confirm that Philips filed a suit in the U.S. against Summit Imaging Inc. and Lawrence R. Nguyen for circumventing technical measures, modifying copyright management information, misappropriation of trade secrets, false advertising and unfair competition,” a Philips spokesperson said in a statement. “Regarding the counter claims, we believe none are of merit. At Philips we respect fair competition and intellectual property rights of others and believe that other companies should abide by the same standards.”

U.S. District Court Judge James Robart in Seattle has given Philips until July 8 to respond to Summit’s counterclaims.

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