- A company that bought patents from failed blood-testing startup Theranos has filed a lawsuit claiming that a health startup that recently launched three COVID-19 tests is infringing on those patents.
- The company behind the lawsuit, Fortress Investment Group, said that it didn’t know that the defendant, BioFire Diagnostics, was working on COVID-19 tests when it filed the suit.
- Fortress now says it will offer royalty-free licenses to companies using its patented technology to fight COVID-19 — but it’s continuing with its lawsuit against BioFire.
- Fortress, which is owned by Japanese mega-hedge fund SoftBank, was sued by Apple and Intel in November for allegedly stockpiling patents for the sole purpose of litigation.
- Visit Business Insider’s homepage for more stories.
When the blood-testing startup Theranos shut down, and its founder, Elizabeth Holmes, faced wire fraud charges, an investment group bought the tanking company’s patents.
Now, that investment group is using those patents to sue a health startup — and that health startup is working on tests for COVID-19, the disease caused by the coronavirus.
Fortress Investment Group’s Labrador Diagnostics has sued the health startup BioFire, claiming that the company’s FilmArray technology infringes on 2 patents that it holds. The plaintiff also filed an injunction demanding that BioFire stop using the technology. The lawsuit was first reported by TechDirt.
BioFire announced last week that it was launching 3 COVID-19 tests using the technology in question, which would be halted if the court grants the plaintiff’s injunction. Injunctions in patent cases are rare.
But Fortress says it was not aware that BioFire was working on COVID-19 tests when it filed the lawsuit, noting that BioFire announced the tests 2 days after the lawsuit was filed. Fortress also announced that 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 indicated that it still claims ownership of the technology.
A Fortress spokesperson redirected Business Insider’s questions to its press release.
“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,” the release said.
Fortress, which is backed by SoftBank, has faced criticism in the past for frequently filing patent-infringement lawsuits through its firms. Apple and Intel sued Fortress in November, alleging that the company violated antitrust laws by stockpiling patents for the sole purpose of demanding billions of dollars from tech companies.
Fortress has defended its practice, saying it backs startups and claims rights to their patents as collateral.
The defendant, BioFire Diagnostics, has marketed technology for diagnosing infectious diseases since 2013. The company raised more than $70 million in 2 funding rounds before merging with bioMerieux, according to Crunchbase.
There is little evidence of Labrador Diagnostics’ existence before the lawsuit was filed this month. State records show the LLC was formed in Delaware on March 6.
A representative for BioFire did not immediately respond to requests for comment.