Markets

Teladoc Is Suing Amwell for Patent Infringement

Two prominent companies in the burgeoning telehealth segment are at odds and will likely face each other in court. Teladoc (NYSE: TDOC) is suing American Well (NYSE: AMWL) for patent infringement over a digital scope and stethoscope the latter sells.

Earlier this week it came to light that Teladoc formally accused American Well (also known as Amwell) in a letter sent by its lawyers to Amwell management in mid-September. Teladoc believes that patents it obtained when it acquired healthcare tech specialist InTouch Technologies were infringed upon by two Amwell products, the Horus HD Digital Scope System and the Thinklabs One Digital Stethoscope.

Stethoscope and gavel on desk with caduceus ornament and books.

Image source: Getty Images.

All told, Teladoc is accusing Amwell of violating nine of its patents. In the letter, Teladoc demanded that Amwell immediately cease and desist selling and using the offending products, and respond to its accusations by Sept. 18.

It is not known if or when Amwell sent a formal response. It has not issued an official statement on the matter, although it referred to the letter in the registration statement it filed with the Securities and Exchange Commission prior to its IPO last month. The company wrote that "we believe that these claims lack merit and, if Teladoc attempts to bring these claims to court, we intend to defend against them vigorously."

Amwell pointed out that sales from the products in dispute comprised less than 5% of its 2019 revenue.

That might not be a comforting thought for investors; on Wednesday, they traded Amwell's stock down by 2.9%, a steeper fall than the S&P 500 index suffered on the day.

10 stocks we like better than Teladoc Health
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Teladoc Health wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TDOC AMWL

Latest Markets Videos

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More