Fortress Investment Group, a patent aggregator/investment firm, owns patents allegedly infringed by bioMérieux SA (among others) over the previous six years. In a lawsuit filed on March 9, 2020, Fortress, though its wholly-owned entity Labrador Diagnostics, is claiming bioMériux’s testing process is infringing U.S. Pat. Nos. 8,283,155 and 10,533,994. Two days after Fortress filed the lawsuit, bioMérieux announced that it was using the allegedly infringing processes to create new COVID-19 tests. This led to a large public outcry against Fortress, who then released the patents to be used for free by anyone involved with COVID-19 testing. In a statement, Fortress said that the litigation against bioMérieux SA “focuses on activities over the past six years that are not in any way related to COVID-19 testing.”

Who is Fortress?

Fortress, originally a private equity firm, was acquired by SoftBank in 2017. Fortress now holds a diverse range of assets, including patents, and with respect to the ‘155 and ‘994 patents, patents that were previously owned by Theranos. Theranos has been in the news regularly since 2013, initially as a revolutionary blood-testing company and more recently related to defrauding their investors via, among other claims, the development of faulty testing devices and modifying test results. Fortress provided Theranos with a $100M investment in 2017, secured by Theranos’ patents. When Theranos ceased operations in 2018, ownership of the patents was legally transferred to Fortress.

Is Fortress merely trying to claim back some of the $100 million investment it made into Theranos’ patents by suing bioMérieux SA for the last six years of unauthorized usage of its patented technology? Or is the right question to ask whether Fortress should be able to enforce the (allegedly fraudulent) Theranos patents against a potential infringer? Additionally, should a company that may have infringed another company’s protected invention be released from liability for its past acts if it is now developing technology to help mitigate the effects of a global pandemic? 

Making it a COVID Issue

In the announcement issued two days after Fortress filed suit against bioMérieux SA, bioMérieux stated that it was launching three coronavirus tests in response to the COVID-19 pandemic. This announcement failed to address the issue that the company was allegedly using the same or similar tests for six years before the COVID-19 pandemic. Without addressing the six years of infringing activity, it appears that bioMérieux’s announcement was primarily designed to harvest the public’s goodwill on their behalf and against Fortress. This worked, as the announcement ignited the court of public opinion against Fortress for trying to enforce its patents against a company that was trying to help the world test for COVID-19.  

After being made aware of bioMérieux’s COVID-19 research, Fortress made it clear that it is not seeking any damages for the use of the patents as related to bioMérieux SA’s COVID-19 testing. Fortress has, in fact, stated those patents may be used for free during this pandemic.

Related: China Seeks Patent on US COVID-19 Drug

So, What’s The Problem?

Here, it’s layered. First, we have a company (Fortress) trying to profit off of potentially fraudulently-obtained patents.  Furthermore, this company is no longer making any medical testing devices and is now just suing companies who do make these devices.  To top it off, these potentially infringing devices may help save lives. However, on the other side, we also have a company (bioMérieux) that could be using another company’s property without legally paying for the right to do so and have done so for six years. Furthermore, this company has not yet sought invalidation of the patents at the USPTO. And, although this company helps save people’s lives, they are also trying to legally benefit from a global pandemic by focusing the public view on their help in preventing the spread of the virus, regardless of their potential willful infringement. 

Putting aside the Theranos issue for a moment and regardless of whether Fortress produces any actual medical testing devices, being unable to assert issued patents against a potential infringer due to the infringer seeking to mitigate the effects of a global pandemic could lower the incentive to develop new medical devices.  It remains to be seen whether this case, among others, will deter startup medical device companies from developing new devices that can help during times of crisis if the companies can’t obtain damages for infringing activity unrelated to a pandemic. 

Donating the Fortress patents to the public was not only the right call from a public relations perspective but also from a legal perspective. For pandemic-related activities, there are avenues the government can legally take to ensure the public is provided with the care they need. One such option is issuing a compulsory license on the patented item. For example, during the 2001 anthrax attacks, the US government threatened to issue a compulsory license for the antibiotic drug ciprofloxacin if the patent owner, Bayer, didn’t lower the price to the government. Bayer lowered the price and the government backed down on the threat.

Related: AI and the Next Frontier in Healthcare and Patent Law

Setting Precedents

Fortress correctly gave their patented technology away, for free, to help during a national crisis. This helped mitigate some of the blowback that occurred from asserting their patents against bioMérieux.  However, given the COVID-19 pandemic, the timing of their lawsuit still appears tone-deaf. I suspect SoftBank/Fortress/Labrador doesn’t have much motivation to garner public support since (a) Labrador doesn’t sell anything so they won’t see a drop in sales and (b) they know that the chance of a continued public relations blowback against Fortress/Softbank is unlikely to affect their share price.