Milliman, Inc. v. Gradient AI Corp. et al. (21-cv-10865)

  • May 21, 2021

Milliman, Milliman Solutions and Vigilytics sued Gradient AI and two former Milliman and current Gradient AI employees, accusing them of infringing patents on health insurance underwriting software, misappropriating Milliman’s trade secrets, and violating their confidentiality agreements with Milliman.  Milliman, an actuarial consulting firm, licensed six patents from co-Plaintiff Vigilytics that claim computer systems that de-identify individuals’ health information to allow use of the data without the need for consent from the subjects.  Milliman uses this technology to offer advanced risk modeling and predictive analyses to insurance companies.  

According to the complaint, Stanford Smith led the predictive analytics practice at Milliman for six years before leaving in 2018 to form Gradient, and Samuel Pettus was a Milliman business development manager before becoming  Gradient’s Sales Director in the Health market.  Millliman says that Smith and Milliman agreed that Smith would purchase and spin off Milliman’s “gradient AI” software platform for use in the workers’ compensation field, but that Smith modified the platform, using proprietary information they surreptitiously obtained while working for Milliman to directly compete with Milliman in the health insurance field.  It further alleges that the two conspired to obtain trade secret information that they would not normally be available to them while employed at Milliman, and that Smith had emailed himself protected Milliman information and data relating to Milliman’s health insurance-based platform.   Milliman says that, as aa result of Gradient AI’s direct competition and undercutting of Milliman’s pricing, it has lost several existing and prospective customers and has been forced to lower its own fees. 

Milliman asserts patent infringement, trade secret misappropriation under both the Defend Trade Secrets Act and the Massachusetts Uniform Trade Secrets Act and violation of Ch. 93A. 

The case is before Judge Norton.

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