Medsphere settlement reached

Medsphere, the open source hospital software company which sued its founders for releasing the code, has settled the suit.

No details were announced.

Medsphere was founded by Steve and Scott Shreeve to produce an open source version of the Veterans Administration's VistA system, which was originally published in the public domain.

The problem was that the VA system lacked crucial billing and insurance modules, without which it was a hard sell. After open source veteran Larry Augustin left his CEO post, new managers decided they needed to be a more proprietary operation.

This may not have been communicated to the brothers, or they may just not have agreed with it. When the release went out the company tried to pull it back, and filed its lawsuit.

Since then Medsphere has been trying to get back on the good side of the open source community, releasing a version of the software under the GPL in February that pleased analysts. More recently it hired Michael Doyle as new CEO, from a SaaS-based medical billing outfit.

Now, with this settlement, the past seems to have been put behind the company. ZDNet is hoping to interview Mr. Doyle about Medsphere's future outlook next week.