A leading electronic data capture company, DSG, settled a suit brought by Datasci, a Maryland shell company that has been the beneficiary of an apparent blunder by the U.S. Patent and Trademark Office (USPTO). Terms of the agreement were not disclosed.

For readers new to the story, the USPTO inexplicably granted Datasci a patent for complex electronic systems in clinical trials that had been in use for many years before Datasci claimed to invent them. The venal and extortionate aspects of the U.S. legal system have seldom been more in evidence.

Three technology companies have now reluctantly settled with Datasci. Phase Forward lead the way, rewarding the first round of Datasci litigation with an $8.5 million payment. DataLabs followed and was soon acquired by ClinPhone. Now DSG has apparently decided that putting the matter behind it is the expedient thing to do.

The DSG news release says, in part, that “under the terms of the agreement, the patent infringement action against DSG is being dismissed. The remaining terms of the agreement between Datasci and DSG are confidential.”

Worried Clients

When reached by telephone, DSG’s typically cordial president and CEO, Tony Varano, declined to say much but a few pleasantries. The terms of the settlement forbid him to say if he’d paid anything to conclude the case, or how much. Of course Datasci would be unlikely to have walked away without a settlement. Varano did concede that the lawsuit had come to the notice of customers, some of whom had turned elsewhere out of concern the case could harm his firm.

Said Varano: “It’s out of the courts. That’s the key for me and for my clients. We are relieved that we don’t have this lawsuit hanging over our heads. It’s been critical to a lot of customers to have us resolve this as quickly as possible.”

Two companies in the industry are still facing legal action from Datasci. As public companies, both were obliged to disclose the suit. DataTrak has said little about its strategy; etrials has announced it would contest the suit. The DSG settlement puts more pressure on those two firms to bring their cases to a close.

It’s impossible to know whether any private EDC firms are currently squaring off against Datasci, or whether larger publicly traded software and consulting firms like IBM, SAP, Accenture or Oracle would be rather juicy or fairly unappetizing targets for Datasci as it pursues another victim.