I.C. companies, UI professor face federal lawsuit

IOWA CITY - A doctor who lives in the Middle East alleges in a federal lawsuit that he is owed more than $75,000 in unpaid revenue and royalties from the sale of a technology he says he helped create with an Iowa City-based company.

The lawsuit was filed Friday in U.S. District Court, Southern District, in Davenport, by Dr. Fawzy Amer Deghedy, a citizen and resident of Egypt. Deghedy is a laparoscopic surgeon employed with the Saudi German Hospital Group in Jeddah, Saudi Arabia, since 1998.

Named as defendants in the suit are Viztek, Inc., Cyber-Anatomy Corporation and Karim Abdel-Malek, a University of Iowa engineering professor who is a majority shareholder and part owner of Viztek and of Cyber-Anatomy, both Iowa City-based companies.

Viztek, formed in 2001, is creator and distributor of “turnkey” visualization and virtual reality systems. Cyber-Anatomy Corporation, formed in 2007, creates and sells 3D learning systems.

In the lawsuit, Deghedy said he attempted to find a company to help him in developing a comprehensive 3D anatomical system of the entire human body, to be used for teaching dissections to medical students when cadavers are not available or cannot be used. Deghedy approached Viztek and described his idea, according to the suit. Abdel-Malek said Viztek had the capabilities to assist him in developing that system for his hospital, and they agreed Viztek also would market and develop the system to third-parties for profit, the lawsuit says.

Deghedy alleges in the suit the company failed to pay him his share of revenues and royalties from sale of the Cyber-Anatomy system to third parties, and he is suing for breach of contract.

Abdel-Malek said Wednesday he was surprised to hear of the lawsuit and surprised that he was named personally in it. Abdel-Malek said there was a contract, but it was broken by Deghedy and the hospital and not by Viztek.

“In the end, the company did not” break it, he said. “They broke the contract we had with them.”

It's unfortunate the suit comes at a time of growth and recognition for the Iowa City company, Abdel-Malek said. Cyber-Anatomy just received two Prometheus Awards from the Technology Association of Iowa: the Innovation in Teaching award and the Outstanding Startup Company of the Year.

“The company is creating jobs,” Abdel-Malek said.