Wednesday, March 18, 2020

The Timebomb of the Theranos Patents Goes Off

Theranos, the blood testing company founded by Elizabeth Holmes, was a fraud. It never built anything that really worked. Along the way toward its inevitable and much deserved collapse, however, it accumulated hundreds of patents. As far as I am concerned, this points to the problem with our patent system, which awards patents for the ideas of things to people who have no idea how to actually create that thing. For example, Richard Feynman held a patent on nuclear-powered aircraft simply by offering the idea that it ought to be possible.

When Theranos went bankrupt its patents were bought up by Fortress Investment Group, which is a major patent troll. People warned at the time that this might lead to trouble down the road, since some of the Theranos patents are broad enough to cover all sorts of medical testing.

Now that fear has been realized, as Mike Masnick explains:
Honestly, I wasn't sure how to begin this story or how to fit all the insanity into the title. It's a story involving patents, patent trolling, Covid-19, Theranos, and even the company that brought us all WeWork: SoftBank. Oh, and also Irell & Manella, the same law firm that once claimed it could represent a monkey in a copyright infringement dispute. You see, Irell & Manella has now filed one of the most utterly bullshit patent infringement lawsuits you'll ever see. They are representing "Labrador Diagnostics LLC" a patent troll which does not seem to exist other than to file this lawsuit, and which claims to hold the rights to two patents (US Patents 8,283,155 and 10,533,994) which, you'll note, were originally granted to Elizabeth Holmes and Theranos -- the firm that shut down in scandal over medical testing equipment that appears to have been oversold and never actually worked. Holmes is still facing federal charges of wire fraud over the whole Theranos debacle. . . .

So, this SoftBank-owned patent troll, Fortress, bought up Theranos patents, and then set up this shell company, "Labrador Diagnostics," which decided that right in the midst of the Covid-19 pandemic it was going to sue one of the companies making Covid-19 tests, saying that its test violates those Theranos patents, and literally demanding that the court bar the firm from making those Covid-19 tests. The company they're suing, BioFire, recently launched three Covid-19 tests built off of the company's FilmArray technology. And that's what "Labrador" (read: SoftBank) is now suing over. . . .

The lawyers filing this lawsuit on behalf of "Labrador" should remember what they've done -- filing a bullshit patent trolling lawsuit, on behalf of a shell company for a notorious giant patent troll, using patents from a sham company, and using them to try to block the use of Covid-19 diagnostic tests in the middle of a pandemic. I wonder how they sleep at night.
Via Marginal Revolutions


G. Verloren said...

Our patent system, like any number of other major institutions we rely on, needs to be torn down and rebuilt from scratch, or barring that then at least subjected to massive, comprehensive reforms spearheaded by the world' foremost experts.

..which is why nothing will meaningfully change, and we'll just keep plodding along kludging together jury-rigged "solutions" as major systemic failures occur.

The longer we keep putting off fixing things, the harder it gets to fix them. Eventually, something will break irrevocably. But that's a problem for the children of tomorrow, or so the policians and corporate interests tell us...

JustPeachy said...

There's never a shortage of vultures.

Apparently some Italian medicos figured out how to 3D print a ventilator valve that they were critically short on... and now the company that makes it and sells it for $11k a pop wants to sue them: