Boies Points to McDermott File Room in Patent Theft Suit

Boies Points to McDermott File Room in Patent Theft Suit Diego M. Radzinschi/The National Law Journal David Boies, Boies, Schiller and Flexner

SAN JOSE — David Boies didn’t pull any punches as he faced off against a pair of pro se litigants in an unusual patent trial.

The famed trial lawyer apologized for using foul language in his opening statement as he described how a pair of inventors allegedly preyed on startup CEO Elizabeth Holmes, writing her off as a “dumb-ass kid.” He also referenced videotaped testimony from a former McDermott Will & Emery partner who threatened to “fuck with her til she dies.”

When their turn came to speak, Richard Fuisz and his son, Joseph, did not back down from their comments about Theranos Inc.’s Holmes. Both men shed tears in freewheeling presentations.

“If I did call her a dumb-ass kid, I’ll admit to it,” Richard Fuisz said. “But I called her that because of the ignorant way certain things were done.”

Theranos, a medical testing company based in Palo Alto, claims that the Fuiszes stole its technology by swiping files from McDermott with the help of a family member who was then a partner at the firm. The company seeks to either invalidate the Fuiszes’ patent for bodily fluid analysis or name Holmes as the inventor.

Both McDermott and former partner John Fuisz deny any wrongdoing, and malpractice claims filed against them by Theranos have been dismissed. In their openings, Richard and Joseph Fuisz insisted that they are seasoned inventors who came up with their patent all on their own. They stressed that the case against them is rooted in circumstantial evidence.

But Boies accused the Fuiszes of systematically drafting patents that target other businesses, foreclosing the inventors from their creations. He introduced jurors to Theranos, which can run dozens of tests with a single drop of blood. The technology has the potential to revolutionize personalized medicine, he said.

“This is why the case and this patent are so important,” he said.

Holmes, who wore a black suit with her blonde hair pulled into a low bun, sat alongside her lawyers from Boies Schiller & Flexner in the courtroom of U.S. Magistrate Judge Paul Grewal. Although she is just 30, she has been honing her company’s technology for 12 years, Boies said. Holmes dropped out of Stanford University in 2003 to found Theranos, which counts former Secretary of State Henry Kissinger and former Sen. Sam Nunn among its board members.

Boies said the Fuiszes sought their patent as part of a plan to take down Holmes.

“Why did the Fuiszes think they could succeed?” he asked. “You will see from their internal documents that because of Elizabeth Holmes’ gender and age they thought that they could take advantage of her.”

The entrepreneur’s family had a long-standing friendship with the Fuiszes. Richard Fuisz told Holmes’ parents he could help her with her invention, but the offer was rebuffed, Boies said.

Holmes hired McDermott to manage her company’s intellectual property without realizing that John Fuisz—Richard’s son and Joseph’s brother—was a partner there, Boies said. The most logical explanation for Richard and Joseph Fuisz seeking a patent for such similar technology, Boies suggested, is that John Fuisz handed his father and brother details from Theranos’ legal files at McDermott.

“McDermott kept files in its central file room, to which John Fuisz had unlimited and unsupervised access,” Boies said. “He could go in whenever he wanted to.”

Boies contended that John Fuisz has tried to intimidate Holmes by threatening to “file patents and fuck with her til she dies.”

“That’s what he said in this litigation,” Boies said. “We’ve captured it on video.”

John Fuisz left McDermott in 2009 and founded the Fuisz-Kundu Group.

“Elizabeth falsely accused me of theft and has irreparably harmed my career and my ability to take care of my family,” he wrote in an email responding to a request for comment Thursday. “I had clients leave, and the accusations have been brought up in every case I have.”

When it was his turn to address the jury, Richard Fuisz, occasionally referencing a page of handwritten notes, scolded Boies for attacking his family.

“What you were told was untrue, and to be told that by a lawyer of his fame is very, very discouraging,” Richard Fuisz said.

Boies chuckled quietly as Richard Fuisz described him as “never a hero” but “somebody I thought much more highly of.”

Richard Fuisz leaned against the partition separating him from the jury and addressed jurors individually during an opening statement that touched on everything from his rural upbringing to his feelings about the Affordable Care Act.

He said his interest in blood analysis stems from his experience as a doctor, noting that he has delivered some 1,000 babies. He told jurors that he has been granted about 115 patents, including some for diagnostics.

Joseph Fuisz urged the jury to have patience with him and his father despite their simple presentations.

A graduate of Columbia Law School, Joseph Fuisz practiced briefly as a corporate lawyer at Sullivan & Cromwell before joining the family business. He stressed that he and his father are experienced inventors. “We’re very good at getting patents,” he said.

The Fuiszes were not entirely on their own. South Florida solo Rhonda Anderson is representing corporate defendant Fuisz Pharma and drove home the defense message, emphasizing the shortage of direct evidence in the case.

“You’re not going to see any evidence that John Fuisz went into the file room,” she said. “You’re going to see smoke and mirrors.”

Contact the reporter at jlove@alm.com.

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