Back in 2018, the disgraced biotech company Theranos sold its patent portfolio to Fortress Investment Group, a division of Softbank. Now two of those patents have wound up in the hands of a little-known firm called Labrador Diagnostics—and Labrador is suing a company called BioFire Diagnostics that makes medical testing equipment.

And not just any medical testing equipment: BioFire recently announced it had developed three tests for COVID-19 using its hardware—tests that are due out later this month. But Labrador is asking a Delaware federal court to block the company from using its technology—presumably including the new coronavirus tests.

As Stanford patent scholar Mark Lemley puts it, "this could be the most tone-deaf IP suit in history."

[Update: Facing an avalanche of bad publicity, Labrador announced on Tuesday that it would grant royalty-free licenses to companies developing COVID-19 tests. The company also claims it didn't know that BioFire was working on a coronavirus test when it filed its lawsuit last week. The company seems to be going forward with the lawsuit.]

Weaponizing Theranos patents

One of the peculiarities of the patent system is that you don't have to actually prove your technology works to get a patent on it. That explains why Theranos—which was famously unable to get its technology working—managed to get a number of patents anyway. These included Patent #8,283,155: "Point-of-care fluidic systems and uses thereof."

This patent describes a generic architecture for a machine that automates testing for the presence of substances in bodily fluids. In the system described by the patent, an operator inserts a "test device" (which contains both the bodily fluid to be tested and the reactants required to perform the test) into a "reader device." The reader device then triggers the necessary chemical reactions to perform the test and reports the results. Theranos' patent isn't limited to any specific bodily fluid, reactants, or testing protocol.

While Theranos never got a machine like this working, BioFire did. BioFire's product line includes the BioFire Filmarray, a machine that automates detection of a variety of pathogens. BioFire says that it has added the new coronavirus to the slate of pathogens its devices can detect, and it expects to make this capability available to customers later this month.

But Labrador Diagnostics argues that the FilmArray infringes on two of its Theranos patents. And as is common practice in this kind of lawsuit, Labrador isn't just asking for royalties. It's also asking the court to issue an injunction against further infringement of its patents. That would apparently mean shutting down sales or use of the BioFire Filmarray product line—including its forthcoming coronavirus tests.

Luckily for BioFire—and for patients in need of coronavirus tests—a landmark 2006 Supreme Court ruling raised the bar for granting injunctions in patent cases. Since then, it has been fairly rare for judges to grant this kind of injunction as opposed to just awarding a winning plaintiff cash damages at the end of a case.

Also, Labrador just filed its lawsuit last week. Given how slowly patent cases move through the courts, it will be many months before a judge makes even initial rulings. With luck, the coronavirus crisis will be long over before the courts rule on the merits of the lawsuit.