Artificial Intelligence

Judge rules in favor of MedWhat and Arturo Devesa against Stanford University’s Stanford-StartX Fund

Market Trends

In MedWhat-Stanford's continuing lawsuit, a critical court battle occurred on September 27, 2018 in San Francisco.

Application For Right To Attach Order And Writ Of Attachment filed by Stanford University's Stanford-StartX Fund and two Chinese VC firms against Silicon Valley tech startup MedWhat.com,Inc. and its CEO Arturo Devesa, was DENIED WITHOUT PREJUDICE by the Supreme Court of California in San Francisco.

Judge ruled "the amounts Plaintiffs are seeking are subject to an offset by the cross-complaint the parties are disputing. (See CCP ?483.015(b)(2).)

Stanford University's Stanford-StartX Fund attempted to freeze MedWhat's bank accounts in a July 2018 Attachment application after their initial lawsuit in April 2018 against MedWhat. Both have sued each other for fraud.

MedWhat filed a Cross-complain in June 2018 against all Plaintiffs asking millions of dollars in damages from Cross-Defendants. That offset Plaintiffs attachment attempt against MedWhat's assets.

"Any exigency argument by plaintiffs is undercut because this lawsuit was filed more than six months ago, based on facts plaintiffs say they have known for at least nine months" Court ruled.

According to court records, Application For Right To Attach Order And Writ Of Attachment was filed by venture capitalists:

Ignacio Vilela, managing partner at Startcaps Ventures

Sabrina Liang, Director of School and Department Funds, at the Stanford University endowment Stanford Management Company

Susan Weinstein, Assistant Vice President for Business Development at Stanford University, reporting to the Vice President for Business Affairs and Chief Financial Officer

Ling Yang, managing partner at British Virgin Islands-based Regent Capital Ventures with offices in Beijing, China

Ben Harburg, managing partner at Cayman Islands-based Magic Stone Investment with offices in Beijing, China

Important to underline that according to court records, TechCrunch, and Crunchbase, two of the venture capital firms trying to freeze MedWhat's bank accounts, Stanford University's Stanford-StartX Fund and Magic Stone Invest, are also investors in MedWhat's direct competition Sensely. Judge did not say whether or not his decision not to freeze MedWhat's bank accounts was influenced by Stanford and Magic Stone being investors in MedWhat's direct competition.

Plaintiffs contested ruling in hearing at court but judge denied again the petition.

MedWhat claims the impropriety about Stanford University's purpose of Application For Right To Attach Order And Writ Of Attachment was that after MedWhat ignored plaintiffs Demand Letter in December 2017, plaintiffs thought once they filed a complain in May 2017 that MedWhat would scare easily and talk to plaintiffs and give to their demands. After Plaintiffs saw MedWhat filed instead a Cross-complain with their Answer with serious allegations against Stanford University and University staff, that's when Plaintiifs decided to file an Order of Attachment to freeze Medwhat's assets and prevent MedWhat to mount a Defense and Crosscomplain.

According to StartX's website and court records, the Stanford-StartX Fund LLC. was created by StartX, Stanford University, and Stanford Hospital & Clinics with the social mission to help support the entrepreneurial endeavors of Stanford students, faculty, alumni and staff. StartX and Stanford-StartX Fund mission in their website state "We're determined, focused and innovative, guided by our principle of putting founders first, and driven by our mission to advance the personal development of founders"

According to MedWhat's website, the startup is a medical artificial intelligence company developing Virtual Medical Assistant chatbots for Hospitals and healthcare organizations. MedWhat participated in Stanford University's StartX accelerator in 2013. Stanford is an investor in MedWhat through the Stanford-StartX Fund LLC.

MedWhat's CEO, Arturo Devesa, was a research scholar at Stanford University Medical School from 2016-2017 according to court records. Devesa was developing an AI virtual medical assistant for Stanford University Hospital & Clinics with Stanford doctors and professors before lawsuit.

For more information on the lawsuit visit https://webapps.sftc.org Case Number CGC18565596

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