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A medical open-source legal hell-hole

To open-source or not to open-source was never in question as far as Steve Shreeve, founding CEO and largest shareholder of Medsphere Systems Corp., was concerned. So, this summer, Steve, self-proclaimed open-source software leader, and his twin-brother Scott, released the company’s matured code on SourceForge under the GPL.

Their reward? They were then sued for $50 million by their company.

To be exact, they were hit by a $50 million, 12-count lawsuit charging them with misappropriation of trade secrets, breach of contract, breach of duty of loyalty, violations of the RICO (Racketeer Influenced and Corrupt Organization) Act, commission of computer crimes, intentional interference with contract relations, unfair competition, and still more complaints by their company.

The core of the dispute is software that has been built on “VistA” (Veterans Health Information Systems and Technology Architecture), the US Veterans Administration’s public domain EHR (Electronic Health Record) system. VistA has become the foundation for several proprietary and open-source medical record software suites.

One of these suites is Medsphere’s OpenVista. This program has no relationship to Microsoft’s Vista.

An OpenVista stack is made up of a minimum of Linux, GT.M (an open-source implementation of the MUMPS (Massachusetts General Hospital Utility Multi-Programming System) language, EsiObjects (a MUMPs objects extension), and VistA. The base OpenVista code, under the name WorldVista, is on SourceForge.

Scott Shreeve, a former emergency-room doctor, and his twin-brother Steve decided to build an open-source business around this code. They then created Medsphere.

In the beginning the plan was, according to Steve Shreeve, to “provide VistA configuration, deployment, support, and maintenance for domestic and international healthcare organizations. … We offer the system in either a hosted or in-house model and charge a monthly subscription for support and maintenance.”

In addition, when they founded the company in 2002, the brothers had said, “Medsphere is also the first healthcare information technology company to commit to open-source at the enterprise level — the code is freely available for enhancement, improvement, and modification.”

Then, through the spring of 2003, the brothers, in collaboration with the team called the “Hui 7” worked on and released OpenVista on SourceForge. This project was funded by the Pacific Telehealth and Technology Hui. The project was managed through Medsphere.

The result of this project was a version of the VA’s VistA software that successfully ran on GT.M on Linux. Once complete, this work was released under the GNU GPL (General Public License) and became known as Hui OpenVista version 2.5.

Steve Shreeve said that, “During 2004, Medsphere deployed VistA to seven hospitals in the State of Oklahoma, in conjunction with our friends at Hewlett-Packard. That project gave Medsphere the opportunity to develop a series of tools for rapidly deploying VistA systems. Those tools were part of Medsphere’s special tool chain that allowed us to rapidly and successfully deploy new customers. Those tools were not to be released as open source.”

Then, according to Steve, “During 2005, Medsphere began work on a new graphical user interface based on completely open source tools. We used Gtk# and Mono to build a truly cross-platform and internationalized graphical user interface for VistA, to replace the VA’s CPRS program. We chose this tool chain specifically because it would allow us to release the final product as open source. Any proprietary technologies that could be embedded were rejected, specifically so that the overall product could be released as open source software.”

By the 12th VistA community meeting in April of 2005, George Timson, one of VistA’s first architects and by 2005 a Medsphere developer, was ready to release a major upgrade to the FileMan DBMS used within VistA.

Steve then reports that Medsphere’s then CEO, Larry Augustin, the well-known open-source businessman, “was really pushing hard for us to release the OpenVista Client (internally known as “Kickstand”) on August 15, 2005.”

By this time, the company was taking flack from some open-source advocates that it wasn’t really an open-source company. In particular, Fred Trotter, a leading figure in open-source medical IT, was accusing Medsphere of being too proprietary with its code.

In a talk-back to an article about the company, Trotter wrote, “The larger VistA community (other than Medsphere) seems to be moving more and more towards fully GPL-libre software. It is possible that Medsphere will create a rift in the community and that the community will create incompatible code with the Medsphere version of VistA. If this happens then there could be a ‘code fork’ which, depending on the circumstance could be very problematic for both the community and Medsphere.”

Medsphere was well aware of these concerns. So, even though the “Kickstand” code was still not ready to go by mid-August 2005, the company released Timson’s Fileman improvements under the GPL with the name MSC FileMan (Medsphere Systems Corp. FileMan).

Trotter, though, in 2006 had been led by news reports to believe that Medsphere had, “in fact closed the source on [their] implementation of VistA.” Steve replied to Trotter’s email and assured him that the reporter had gotten it wrong and that “The new work that we have done on the graphical user interface is slated to be released once we have completed our testing work. There are at least two other major projects that we will also be releasing that will fundamentally change the way developers work with VistA and the way that new development can take place. We’re working to release a fully-cross platform and completely open source stack, from top-to-bottom towards the latter part of this year.”

Steve’s reply to Trotter was CC’d to Medsphere then- and current-CEO Ken Kizer. Afterwards, the Kizer explained to the Subcommittee on Health of the House Committee on Ways and Means that open-source was the best path for government IT spending. Kizer said, “Even in the absence of federal funding per se, I believe that the federal government’s policy should be to support and utilize open source software as the preferred option whenever possible because of its many advantages over proprietary software.”

When another article appeared that confused the matter of whether Medsphere was an open-source company or not, Timson replied,”For those interested, I just want to note that Medsphere’s product is NOT proprietary. (‘OpenVista’ would not be a very appropriate name for a proprietary product!) We’ve installed CUSTOMIZED versions of Vista at several hospitals, and these customized suites of software include proprietary components from a few third-party vendors like Sea Island Systems and Informatix Laboratories Corporation. The basic CPS/VistA product we install and support is open source.”

So, in the late spring of 2006, the company’s founders declared that Medsphere would continue to open-source its products, the CEO told Congress that he favored open-source software, and perhaps Medsphere’s most well known VistA developer assured the public that Medsphere’s chief product was open source.

The Shreeve brothers subsequently released the next two programs’ source code, Jumps, which enabled Java developers to work with OpenVista, and Kickstand, an OpenVistA client, on SourceForge on June 9 under the GPL.

Then, the roof fell in.

Kizer claimed that the code release had come as an “unwelcome and startling surprise.” On June 26, the company, led by Kizer, sued the co-founders for $50 million in the Orange County Superior Court of California. The core of these lawsuits is that the Shreeves did not inform Kizer that they were releasing the source code.

It certainly appeared that Medsphere was, if not already there, well on its way toward open-sourcing its software. That, at least, is what the Shreeves thought when they went ahead. According to Kizer, in an open letter to Medsphere employees, the company’s “general stance on open source has been consistent over time.”

Why would the Shreeve brothers go against the wishes of their own CEO? According to one anonymous source, “Steve intentionally posted the source code to sabotage the company.” No reason was given, though, as to how this release could have hurt Medsphere, or why Steve Shreeve would have wanted to hurt his own company.

More to the point, the Shreeves argue that the CEO did know. According to email transcripts published by Trotter, Steve Shreeve had expressly told both Trotter and Kizer that “The new work that we have done on the graphical user interface [presumably Kickstand] is slated to be released once we have completed our testing work. There are at least two other major projects that we will also be releasing that will fundamentally change the way developers work with VistA and the way that new development can take place. We’re working to release a fully-cross platform and completely open source stack, from top-to-bottom towards the latter part of this year.”

Kizer replied to this note detailing the company’s open-source plans with an email message with an attachment of his Congressional testimony supporting open-source. Thus, Trotter reasons, Kizer clearly knew that the Shreeve were going to be releasing the code.

Other sources close to the matter have suggested that when Kizer became CEO, he and the brothers disagreed on what path the company should take. This sounds plausible, but Scott Shreeve said of Kizer, while Kizer was the Medsphere board chairman, that, “Ken is one of my personal heroes and mentors. As we learned about VistA and the VA, it became apparent that he was the visionary and thought leader behind their intelligent use of healthcare IT as the enabler of massive quality improvement initiatives.”

In mid-August, at LinuxWorld, the Shreeve twins tried to speak with Augustin and other open-source figures to find a way out of the lawsuit. In addition, Trotter now stepped forward with open-source luminary, Eric S. Raymond, “to see if together we could approach Medsphere and attempt to broker a peaceful resolution.”

According to Kizer in an Oct. 10 email note, “Medsphere, in cooperation with the Shreeve brothers and their legal counsel, jointly retained the services of a professional mediator more than two months ago.”

So far, all these efforts to mediate a solution have come to nothing.

Additionally, Raymond has found Medsphere’s apparent about-face on open-sourcing the code more than a little distressing. In a note to Kizer, Raymond wrote, “Fred is correct that Medsphere’s renegation of an open-source release performed by its officers in conformance with public previous promises could become a dangerous precedent. If allowed to stand, it would mean that the open-source community could never trust a corporate partner again.”

“Accordingly, the open-source community needs, and deserves, a detailed explanation of the reasons behind this extraordinary maneuver. On behalf of the community, I am now requiring that explanation.”

To date, there has been no such explanation.

The war of words has only grown hotter. Trotter now accuses Medsphere of betraying the open-source community. Steve Shreeve in his blog argues that Augustin isn’t really pro-open-source. How can Augustin be, Steve said, while he’s defending the GPL on one hand and “concurrently filing a $50 million dollar lawsuit against his own company for releasing code under the very GPL license that he is espousing?”

Augustin simply replies that Medsphere mess is “an internal matter that, unfortunately, may need to be handled by the courts.”

The Shreeves filed a cross-complaint against Medsphere in the Orange County Superior Court of California on Nov. 8. In this counter-suit by the brothers, they name not only Medsphere, but Kizer, Augustin, and Dave Crowder, a financial backer of Medsphere and a member of the Medsphere board.

The main case itself is now slowly moving through the court system. On Dec. 20, Judge Charles Margines denied a motion< by Medsphere to find Steve Shreeve in contempt of court concerning his return to Medsphere of company equipment and documents.

The judge dryly noted that “The parties have a choice — they can ‘run up their client’s tabs’ by seeking judicial intervention in this dispute, or they can meet and confer and reach another stipulation.”

At this point, it appears that the court costs will continue to run up for both Medsphere and the Shreeve brothers. Medsphere continues to insist that the Shreeves had no right to open-source the code without the express, informed permission of the CEO, while the brothers continue to claim that they did have the right to do so and that everyone, including the CEO, had been kept in the loop.

In any case, the once open-source code is no longer available, and there’s no telling when, if ever, it will be re-released.


A version of this story was first published on Linux-Watch.

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