Softbank Troll Co. Owner of Theranos Patents Promises It Wont Contest Covid Testing

There is no conscience in some quarters, especially patent trolling, but public shaming does work. JL


Mike Masnick reports in Tech Dirt:

A Softbank-owned patent troll, Fortress Investment Group, through a shell subsidiary, Labrador Diagnostics (which does not do any diagnostics), using patents it bought from Theranos during its fire sale, sued BioFire Diagnostics/BioMerieux, one of the few companies making a Covid-19 diagnostics test, claiming patent infringement. It's great that after getting lots of shit for pandemic profiteering, it got the shell company to issue a press release "offering" (not promising) royalty-free licenses, but that doesn't clear up patent trolling off a sham company's questionable patents in the midst of a pandemic.

Yesterday I wrote up a fairly insane story about how a Softbank-owned patent troll, Fortress Investment Group, through a shell company subsidiary, Labrador Diagnostics (which, despite its name, does not seem to do any diagnostics), using patents that it had bought up from the sham medical testing company Theranos during its fire sale, had sued BioFire Diagnostics/BioMerieux, one of the few companies making a Covid-19 diagnostics test, claiming patent infringement. The patent infringement claims were on all of its diagnostics created using BioFire's FilmArray 2.0, FilmArray EZ, and FilmArray Torch devices -- and the company's Covid-19 tests were based on that technology. Even worse, the company asked the court to issue an injunction, blocking BioFire from using the tests. As we pointed out, this was not just tone deaf, but destructive and dangerous.

This morning, hours after our article went viral, Labrador Diagnostics issued a press release claiming that once it became aware that BioFire was working on Covid-19 tests, it had offered the company a royalty-free license on those tests (and only those tests):

-Labrador Diagnostics LLC (“Labrador”) today announced that it will offer to grant royalty-free licenses to third parties to use its patented diagnostics technology for use in tests directed to COVID-19. Labrador fully supports efforts to assess and ultimately end this pandemic and hopes that more tests will be created, disseminated, and used to quickly and effectively protect our communities through its offer of a royalty-free license during the current crisis.

On March 9, 2020, Labrador, an entity owned by investment funds managed by Fortress Investment Group LLC, filed a patent infringement lawsuit in the District of Delaware to protect its intellectual property. Labrador wants to make clear 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.

Two days after the lawsuit was filed on March 11, 2020, the defendants issued a press release announcing that they were developing tests for COVID-19. Labrador had no prior knowledge of these activities by the defendants. When Labrador learned of this, it promptly wrote to the defendants offering to grant them a royalty-free license for such tests.

There are still many open questions regarding all of this. It is unclear when Labrador actually sent this letter or what it actually says in the details. It's notable that it says that it "will offer to grant royalty-free licenses, rather than just flat out waiving any rights it might hold for such tests. The latter would suggest good faith. The former makes you wonder if there are conditions associated with the "offer" (such as needing to license the patents for other uses, or a recognition of the patents as valid or some such). Labrador and its lawyers at Irell & Manella could clear up this confusion by releasing the letter -- including the time stamp when it was actually sent.

Even this bit of last minute ass covering doesn't change the overall sketchiness of the original lawsuit. Again, we're talking about questionable patents from Theranos, a firm that was shown to be a sham, with technology that never worked. The patents themselves seem excessively, perhaps ridiculously, broad. Look over the claims in patent 8,283,155 and explain to me how that adds anything new or novel to diagnostic testing machines. Here's the 1st claim:

1. A two-way communication system for detecting an analyte in a bodily fluid from a subject, comprising:

a) a reader assembly comprising a programmable processor that is operably linked to a communication assembly;
b) an external device configured to transmit a protocol to the communication assembly;
c) a test device configured to be inserted into the reader assembly, said test device comprising:

i) a sample collection unit configured for collecting a sample of bodily fluid suspected to contain an analyte;
ii) an assay assembly containing reactants that react with said sample of bodily fluid based on the protocol transmitted from said external device to yield a detectable signal indicative of the presence and/or concentration of said analyte; and
iii) an identifier that is configured to provide the identity of said test device and is also configured to trigger the transmission of said protocol that is selected based on said identifier;

wherein the programmable processor of the reader assembly is configured to receive said protocol from said external device, wherein said protocol in turn effects (1) a reaction in said assay assembly for generating said signal, and (2) selection of a detection method for detecting said signal, and wherein said reader further comprises a detection assembly for detecting said signal which is transmitted via said communication assembly to said external device.

It basically seems to describe a mobile testing unit that can collect data from a sample, and send what it finds over a network to a computer system to analyze. I'm certainly not an expert in the field, but it seems to me that if you were to ask basically any one with any knowledge of how these things work "how would you build a mobile medical diagnostics tool" they'd more or less describe exactly this system. This is not some big breakthrough. This seems to be a broad an obvious idea that never should have received a patent in the first place.

So, sure, it's great that after Irell & Manella started getting lots of shit for this kind of gross pandemic profiteering, it suddenly got the shell company to issue a press release "offering" (not promising) royalty-free licenses, but that doesn't clear up what appears to be a fairly gross effort at patent trolling off of a sham company's questionable patents -- and doing so in the midst of a pandemic. While the company claims it didn't now that BioFire was working on a Covid-19 test, that's laughable. Pretty much everyone in the space seemed to expect BioFire to be among the diagnostics firms creating a test. Indeed, even the Wall Street Journal wrote about BioFire working on this a full week before the lawsuit was filed. On top of that, this lawsuit was filed when it was already blatantly clear that we were in the midst of a pandemic, where BioFire's diagnostics would be useful.

So, yes, it's great that after the terribleness of this decision became clear, the company made it public that it wouldn't seek to stop Covid-19 testing, but that doesn't excuse all of the other awful behavior at play here -- and, again, the company still has not revealed the details and conditions of its "offer."