Residency Software Developer Sues Doctor Who Helped Launch a Competing Product

The graduate medical education (GME) software company Thalamus filed a lawsuit against its competitor Liaison International and ob/gyn leader Maya Hammoud, MD, MBA, over alleged anticompetitive conduct.

Thalamus brought the suit in July, claiming that the defendants “engaged in a coordinated effort to unfairly compete in the residency application market through anticompetitive means.” Specifically, it alleges that Hammoud violated a non-disclosure agreement signed when she was evaluating its technology for a different project — before she helped launch a competing product.

“We believe deeply in competition, and we welcome innovation that improves the residency application experience for programs and applicants alike. But there is a fundamental difference between competing on the merits and the conduct alleged in our complaint,” Jason Reminick, MD, MBA, MS, founder and CEO of Thalamus, told MedPage Today in a statement.

Neither Hammoud nor Liaison responded to MedPage Today‘s request for comment.

For years, Thalamus was the only major player in the GME software market. The company has a long-standing partnership with the Association of American Medical Colleges (AAMC), providing various residency application software products for the Electronic Residency Application Service (ERAS). Last year, AAMC bought an equity stake in Thalamus and is now the company’s biggest investor.

But then, for the 2024-25 application cycle, ob/gyn peeled away from ERAS and went with Liaison’s product ResidencyCAS, and emergency medicine followed suit the next year. Leaked AAMC emails revealed internal panic over a potential ERAS exodus; ERAS is the AAMC’s biggest source of revenue.

Reminick noted that some ob/gyn, emergency medicine, ophthalmology, and plastic surgery programs have continued to use Thalamus even though they have largely switched over to ResidencyCAS and another competitor, SF Match.

The lawsuit alleges that in preparation for the 2020-21 application cycle, Thalamus partnered with Hammoud, the American Medical Association (AMA), and the Association of Professors of Gynecology & Obstetrics (APGO) on a pilot project for which Hammoud was the principal investigator and had full access to Thalamus’s products.

The agreement had strict terms on how information about Thalamus obtained through the project could be used. Notably, it prohibited its use “as part of an effort to build any product or service with features similar to or competitive with those offered by Thalamus,” the complaint stated.

In October 2022, Thalamus and Liaison entered into a non-disclosure agreement, and Liaison leaders said they did not plan to enter the GME space and didn’t have any similar products. A year later, however, ob/gyn announced its switch to ResidencyCAS.

A physician recently brought a separate antitrust suit against the AAMC. Bryan Carmody, MD, MPH, of Eastern Virginia Medical School in Norfolk, who runs a popular blog on medical education, told MedPage Today that in these two lawsuits, Thalamus and AAMC have to position themselves quite differently.

In the antitrust suit, AAMC is characterized as having a near monopoly on the residency application market with ERAS, with Thalamus painted as a competitor that AAMC neutralized by investing in.

“But in this suit, Thalamus presents itself as the underdog whose business can be harmed when a well-financed platform prices aggressively and bundles services,” Carmody said. “I’m sure opposing counsel will be following these suits closely and taking careful note of the language and vocabulary that the AAMC and Thalamus use to describe their business arrangements.”

AAMC said it’s aware of the Thalamus lawsuit but declined to comment.

Christopher Robertson, JD, PhD, professor of health law at Boston University, told MedPage Today that “the underlying case is a real-but-vanilla commercial dispute” which he said is routine for companies navigating nondisclosure agreements.

He also noted that this case raises the issue of governance, like “specialty societies with undisclosed financial stakes steering a market whose costs fall on people with no voice in it.”

Louise Perkins King, MD, JD, assistant professor of obstetrics, gynecology, and reproductive biology at Harvard Medical School, told MedPage Today that the significant profit motive and potential in the residency and fellowship applications market gives her pause.

“Our learners devote huge amounts of their lives and go into heavy debt to become clinicians,” she said. While a mostly lucrative career, becoming a doctor is still a tough road and she said it may make more sense for programs, rather than applicants, to bear the cost of residency applications.

“There should be no profit associated with a system that seeks to create equity in the residency and fellowship match process,” King argued, further suggesting that legislation may be needed to ensure the system is not for profit.