[Ip-health] Theranos: How a broken patent system sustained its decade-long deception | Ars Technica

James Love james.love at keionline.org
Tue Mar 5 08:47:04 PST 2019


https://arstechnica.com/tech-policy/2019/03/theranos-how-a-broken-patent-system-sustained-its-decade-long-deception/

by DANIEL NAZER, EFF
March 4, 2019


This is a long article, and wroth reading from the web site, in its
entirety.

Here are a few excepts..

...........

In April 2015, while Theranos was still enjoying mostly fawning press
coverage, Business Insider published an article quoting some skeptical
scientists. The article noted that “technical details about Theranos’
seemingly revolutionary tests are hard to come by.” Notably, Theranos had
hundreds of patents by that point. Yet a scientist looking to understand
how Theranos actually conducted its test wouldn’t learn anything useful
from a typical Theranos patent. This is because companies can submit rough
outlines of their processes, leaving out the key details, and still get
patents. Recent legal reforms have only made this easier.

Business Insider wrote that if Theranos had come up with a “killer
application” for microfluidics, “that may explain its reluctance to show
the patented details that make its technology unique.” This sentence
shouldn’t make sense, because patents are public by nature. So “patented
details” should be public.

The sentence only makes sense when you realize that the patent bargain is
utterly broken. The people who work within the patent system realize it.
That’s why no one raised red flags when Theranos received hundreds of
patents without telling the scientific community how its machines actually
worked.

Don’t worry about the future

In September 2015, just a few weeks before The Wall Street Journal would
bring the curtain crashing down on Theranos, Elizabeth Holmes was on stage
with President Bill Clinton. The former president asked Holmes how old she
was when she founded Theranos. She answered that she was 19. Clinton turned
to the audience, mustered his folksiest cadence, and said, “Don’t worry
about the future—we’re in good hands.”

What is the future for Theranos’ patents? Remarkably, the company lasted
for almost three years after John Carreyrou’s exposé. Toward the end, the
company stayed alive thanks to a loan from Fortress Investment Group LLC.
That $100 million loan was guaranteed by Theranos’ patents. Fortress is
owned by Softbank and has made other large patent deals, including a
shadowy loan agreement with infamous patent enforcer Uniloc. It seems hard
to believe that Fortress did not expect Theranos to default when it made
its loan. Indeed, Theranos defaulted less than a year later and is
transferring its patent portfolio to Fortress.
. . .


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