The aff allows fraudulent patents to proliferate---that hurts innovation and turns case

The U.S. patent system gives inventors a 20-year exclusive right to their inventions to incentivize the creation of new technologies.

But what if you have a great idea for a new technology, but never actually create it, test it, or determine that it works? Is that patentable? Conversely, should the U.S. Patent and Trademark Office (PTO) grant patents covering imaginary, fraudulent and otherwise non-existent inventions? Probably not, but it happens with alarming frequency, and it is causing serious problems.

For example, on March 3, 2020, the Wall Street Journal reported that French manufacturer bioMérieux, among others, was developing a new fast-acting DNA-based diagnostic test for COVID-19.

Six days later, a patent holding company called Labrador Diagnostics sued bioMérieux and its Utah-based subsidiary BioFire Diagnostics for patent infringement. Labrador alleged that BioFire’s FilmArray® products, which analyze blood samples for hundreds of different respiratory, gastrointestinal and other pathogens including, most recently, the COVID-19 virus, infringe U.S. patents 8,283,155 and 10,533,994. In addition to unspecified monetary damages, Labrador sought an injunction to stop sales of the allegedly infringing products.

News of Labrador’s lawsuit sparked a wave of negative publicity that quickly persuaded its parent company Fortress to end the lawsuit and offer royalty-free licenses to anyone conducting COVID-19 testing.

Even more remarkable than Labrador’s poor judgment in targeting COVID-19 test suppliers in the midst of a global pandemic is the source of the patents that it asserted. Both patents were originally held by Theranos Inc., the infamous blood testing company founded by Stanford wunderkind Elizabeth Holmes in 2003.

At its peak, Theranos was valued at more than $9 billion; it promised a multifunctional, automated testing system that worked with no more than a pinprick of blood. But as John Carreyrou at the Wall Street Journal first reported in 2015, and compellingly portrayed in his 2018 book Bad Blood: Secrets and Lies in a Silicon Valley Startup, Theranos was perhaps “Silicon Valley’s greatest fraud.” Despite its high flying reputation and blue chip Board, the company had simply not produced the blood testing technology that it had advertised.

By 2017, Theranos was on the brink of collapse. At that point, Fortress loaned Theranos $100 million, secured in part by the company’s sizable patent portfolio. When Theranos finally ceased operations in March 2018, Fortress took possession of more than 700 Theranos patents worldwide.

Fortress, which is in the business of acquiring and asserting patents for profit, is sometimes referred to as a “patent troll,” though more formally classified as a “patent assertion entity” (PAE) or a “non-practicing entity” (NPE) – and, given its size, has recently earned the new honorific “Mega-NPE.” Fortress then transferred some Theranos patents to its tactical subsidiary Labrador, which seemingly began to assert them in 2020. Holmes, who is currently under federal indictment for multiple counts of criminal fraud, is the lead inventor on both patents asserted against bioMérieux and BioFire.

Assuming that the charges against Holmes and Theranos are proven, one might reasonably ask how a company that never developed its claimed technology, and went to great lengths to conceal its failures, could have obtained hundreds of patents protecting that non-existent technology.

Unfortunately, Theranos’s aspirational blood testing apparatus is not the only allegedly fraudulent technology to have been patented. For example, in 2014, the USPTO granted a patent to disgraced South Korean scientist Hwang Woo-suk, who was convicted of fraud for falsifying experimental results relating to the cloning of human stem cells – the very subject of his patent. In fact, there are patents covering any number of never-achieved, unworkable inventions from cold fusion to anti-gravity-driven spacecraft.

The problem of patents covering non-existent inventions does not end with applicants who are fraudulent or delusional. The PTO receives a far larger number of applications from inventors who are simply mistaken (or only mildly dishonest). These are patents based on scientific findings that have been formally retracted from the journals in which they were originally published. Professor Janet Freilich and Soomi Kim studied a large sample of patents based on retracted scientific papers and report (in a forthcoming article) that retraction of the underlying paper had little or no effect on the examination, issuance and later citation of those patents. This work supports prior research by Professor Freilich demonstrating, based on the methodological soundness of experiments reported in a large sample of patent documents that, in reality, “most [patented] inventions likely do not work.”