Updated Remember Theranos? The blood-testing company worth billions whose CEO Elizabeth Holmes became a celebrity right up until the point when it became clear its revolutionary testing machines didn’t actually work as described?
Well, Theranos is dead, and Holmes is still dealing with the legal repercussions, but her vampire company has come alive again – and in the very worst way: its reincarnation is suing another medical testing company for patent infringement.
It gets worse. While Theranos’ patents, obtained by an outfit called Fortress Investment Group in 2018, do not relate to a testing machine that actually works, they are being used to sue a manufacturer whose medical-testing machine not only works but is being used to detect the presence of the COVID-19 coronavirus.
That’s right: a private-equity-turned-investment group is using patents it picked up from a collapsed testing company – which imploded because its tech didn’t work – to sue a company whose machines actually do work and which is on the front-line of tackling the worst pandemic that the world has known for 100 years.
The lawsuit [PDF] comes by a company called Labrador Diagnostics, which is a part of Fortress, which is itself a part of investment monster Softbank. It’s worth noting that Apple and Intel sued Fortress late last year for stockpiling patents with sole aim of suing other companies.
“Labrador is informed and believes, and on that basis alleges, that Defendants individually and collectively have infringed and, unless enjoined will continue to infringe, one or more claims of the '155 [US 8,283,155] Patent, in violation of 35 U.S.C. § 271, by, among other things, making, using, offering to sell, and selling within the United States, and/or supplying or causing to be supplied in or from the United States, without authority or license, the Accused Products for use in an infringing manner,” the lawsuit reads.
The other patent in question is US 10,533,994.
It’s dense legal language designed solely to extract money out of a legitimate business. And while Labrador Diagnostics may sound like a legitimate testing company, there is no evidence that it exists on anything but paper. It was created as a limited liability company in Delaware literally this month. Within three days of it existing, it sued the testing equipment maker in question: BioFire.
BioFire, meanwhile, is a real company with real people doing actual work. The technology that “Labrador” claims is infringing its patent – which it calls FilmArray technology – is being used to develop three much-needed tests for COVID-19.
America: We'll send citizens cash checks amid coronavirus financial hardship. UK: We'll offer £330bn in biz loansREAD MORE
Since the lawsuit was filed in America on March 9, Labrador/Fortress has claimed it had no idea BioFire was working on COVID-19 tests; although that claim is questionable given that on March 3 there was an article in the Wall Street Journal specifically identifying BioFire and the fact it was working in two diagnostic tests for the coronavirus.
Faced with a wave of extremely critical commentary from the diagnostics industry, the IP industry, and now the press, Labrador/Fortress put out a statement on Tuesday in which it said it would “offer to grant royalty-free licenses to third parties to use its patented diagnostics technology for use in tests directed to COVID-19.”
But it continues to claim that the “lawsuit was not directed to testing for COVID-19. The lawsuit focuses on activities over the past six years that are not in any way related to COVID-19 testing.” It also claims that as soon as it learned of BioFire’s COVID-19 testing it “promptly wrote to the defendants offering to grant them a royalty-free license for such tests.”
In other words, we'll give you a free license for COVID-19 testing machines, but the lawsuit against BioFire's tech in general is still going ahead.
And more depressing news
And if all that wasn’t enough, a potential legal dust-up could delay vital medical treatment in COVID-19-slammed Italy. Technician Christian Fracassi was able to 3D print a valve for ventilator machines after the vendor said it was unable to provide enough replacements due to demand.
The valves apparently cost many thousands of dollars apiece. Fracassi was able to reproduce it in plastic using 3D printing for just $1 a go, and get the machines working again. The 3D-printed version is not going to last very long, and may need to be swiftly replaced and discarded, but it will work long enough to keep someone alive until a replacement is delivered. And, according to local reports, his swift actions have already saved 10 people.
However, there is a fear the valve manufacturer could sue for intellectual property infringement, and has refused to provide its blueprints. The matter is in the hands of lawyers.
“I am holding my hands because in a world where money matters more than someone’s health, nothing else can be done,” Fracassi said, according to UK paper Metro. ®
As noted by tech journalist Mike Masnick, the law firm representing Labrador is Irell & Manella, the same legal eagles who represented the monkey in that obnoxious macaque selfie copyright battle.
Updated to add
Fracassi says, contrary to earlier reporting, he was not threatened by the valve's manufacturer with infringement, and disputed that the original part cost more than $10,000. Instead, we're told, the valve maker refused to hand over the blueprints for the component, and it was feared a lawsuit might follow.
The manufacturer also said in a statement it did not intend to pursue legal action, and will continue supplying hospitals with necessary parts.