Fortress Drops Ex-Theranos IP Suit To Let Test Co. Fight Virus

By Tiffany Hu
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Law360 (June 29, 2020, 8:53 PM EDT) -- Fortress, the company that bought blood-testing patents developed by now-defunct Theranos, has dropped an infringement suit against a French biotech outfit working on a COVID-19 test, saying it wants "to allow the defendants to focus their resources on combating the coronavirus."

The dismissal notice filed Sunday by Fortress Investment Group LLC's Labrador Diagnostics LLP ends a lawsuit Labrador brought in March against medical testing company BioMerieux over the patents once owned by Theranos and issued to its embattled founder, Elizabeth Holmes.

Soon after the suit was filed, BioMerieux announced that it was working on COVID-19 tests, prompting headlines that accused Labrador of being a so-called "patent troll" for trying to shut down coronavirus tests during a pandemic.

In Sunday's notice, Labrador maintained that the lawsuit was "never about COVID-19," but that it was dropping the case to "allow the defendants to focus their resources on combating the coronavirus and addressing the public health crisis."

"There is no mention of COVID-19 or SARS-CoV-2 anywhere in the complaint," the notice states. "The lawsuit was based on the defendants' past infringement."

The case has been dismissed without prejudice, which means it can be refiled at a later date.

Counsel for Labrador and a BioMerieux representative did not immediately respond to requests for comment Monday.

Holmes, the former CEO of Theranos, is facing wire fraud and conspiracy charges in California federal court alleging she and another executive defrauded patients and investors into believing the now-shuttered company had developed revolutionary blood-testing technology that could run multiple tests on a single drop of blood.

Softbank-owned Fortress, which bought up Theranos' blood-testing patents, accused Biomeriux and its Delaware-incorporated subsidiary BioFire Diagnostics LLC of infringing the patents in the March lawsuit.

After the public outcry, Fortress then offered to license the patents for free to BioMerieux and anyone else working on coronavirus tests, but it said in Sunday's filing that BioMerieux declined that offer.

The company said at the time it extended the officer that it was unaware Biomeriux was involved in developing tests, and that the litigation "focuses on activities over the past six years that are not in any way related to COVID-19 testing."

It added, "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 patents-in-suit are U.S. Patent Nos. 8,283,155 and 10,533,994.

Labrador is represented by Brian E. Farnan and Michael J. Farnan of Farnan LLP.

The defendants are represented by Jack B. Blumenfeld of Morris Nichols Arsht & Tunnell LLP.

The case is Labrador Diagnostics LLC v. BioFire Diagnostics LLC et al., case number 1:20-cv-00348, in the U.S. District Court for the District of Delaware.

--Additional reporting by Craig Clough and Dorothy Atkins. Editing by Jill Coffey.

For a reprint of this article, please contact reprints@law360.com.

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