The ghost of Theranos is still haunting the biotech industry, even in the middle of a pandemic. A shell company called Labrador Diagnostics LLC, which says it holds the rights to two Theranos patents, sued a company making COVID-19 tests for patent infringement. The lawsuit asked the court to force the company, BioFire, to stop making its tests.

“This could be the most tone-deaf IP suit in history,” tweeted Mark Lemley, director of the Stanford Law School Program in Law, Science and Technology.

Bad: a biotech patent troll

Worse: seeking injunctions even though it's not in the market

Worse still: using patents it got from Theranos

Worst: trying to shut down is COVID-19 testing.

This could be the most tone-deaf IP suit in history.



Labrador Diagnostics v. BioFire (D Del) — Mark Lemley (@marklemley) March 16, 2020

The shell company is owned by Fortress Investment Group, which bought the Theranos patents in 2018. Fortress Investment Group happens to be backed by SoftBank, which said this fall that it would spend billions to bail out WeWork — before backpedaling on that deal this week.

Soon after TechDirt reported on the lawsuit, though, Labrador Diagnostics LLC said that it would allow third parties to use its patented technology to develop COVID-19 tests — though it’s unclear how valid its claims would have been. “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,” the company wrote in a press release.

Over 200,000 people have been sickened with COVID-19 worldwide, and over 8,000 people have died. Italy has the highest number of confirmed infections outside of China, and the US has struggled to ramp up testing to meet the increasing demand.

Correction 4:15PM ET: A previous version of this story referenced a story about a dispute over 3D-printed ventilator valves. That story has since been updated, and does not seem to involve legal action at this time.