Family Gives Up Disputed Patent, Ending Trial With Boies' Client

Family Gives Up Disputed Patent, Ending Trial With Boies' Client Jason Doiy Theranos' lawyer David Boies of Boies, Schiller & Flexner

SAN FRANCISCO — A pair of pro se litigants surrendered a patent they allegedly snatched from law firm files, ending their splashy trial with famed litigator David Boies.

Two days into a San Jose jury trial, inventor Richard Fuisz and his son Joseph settled their suit with Boies, Schiller & Flexner client Theranos Inc., a high-profile medical testing startup. As part of the deal, the parties agreed the Fuiszes’ patent for bodily fluid analysis will be declared invalid. The Fuiszes were accused of filing the patent application with confidential Theranos documents handed to them by a former partner at McDermott, Will & Emery—an allegation the firm and the lawyer deny.

Boies said the settlement accomplished his client’s goal of disabling U.S. Patent No. 7,824,612 without the toll of a full trial.

“You always like to give a closing, but you can never be disappointed when you win,” Boies said.

Theranos and the Fuiszes said in a joint statement that no payments were made as part of the settlement. In one concession to the Fuiszes, Theranos agreed not to seek attorney fees, Boies said.

Joseph Fuisz said in an interview he and his father, who run Fuisz Pharma and several other businesses and also license and sell their patents, are eager to put the case behind them. The inventors wrote in court papers that they decided to let go of their lawyers and defend themselves after racking up more than $1 million in legal bills.

“Defending oneself pro se in a case with this kind of complexity was very difficult,” Joseph Fuisz said.

Palo Alto-based Theranos has turned heads in the Valley for its medical testing technology, which allows for dozens of tests to be run with just one drop of blood.

Shortly after dropping out of Stanford University to found the company in 2003, Theranos CEO Elizabeth Holmes hired McDermott Will to manage her intellectual property. Just one week after McDermott filed Holmes’ provisional application for a patent for bodily fluid analysis, Richard Fuisz wrote to his lawyer to file a similar patent, according to Theranos’ court papers.

Boies told jurors that the most likely explanation is that former McDermott partner John Fuisz—Richard’s son and Joseph’s brother—funneled Holmes’ confidential documents to his family. Both McDermott and John Fuisz deny any wrongdoing, and malpractice claims filed against them by Theranos have been dismissed. Richard and Joseph Fuisz stressed during their opening statements that there was no direct evidence of theft.

Theranos already has a handful of patents for its technology, and the settlement will bolster its intellectual property protection, Boies said. The Fuiszes hold other patents in bodily fluid analysis, and as part of the deal, they signed a covenant not to sue Theranos for patent infringement for five years, Boies said. But the settlement does not quell all litigation.

John Fuisz wanted Theranos to make a public statement that there was no evidence of theft. But no such statement has been made, and he said Monday he plans to sue Theranos and Holmes for making false allegations that have harmed his career. He added he may name his father and brother in the suit as well.

“It’s unfortunate that they chose side deals over justice,” John Fuisz wrote in an email. “I can’t be bought.”

John Fuisz left McDermott in 2009 to found the Fuisz-Kundu Group, an IP litigation boutique in Washington, D.C. He said Boies offered to refer him work and name him cocounsel on several cases if he agreed not to sue Theranos. Boies denied making any overtures.

“There’s absolutely no truth in that,” Boies said Monday.

Boies said he thought Richard and Joseph Fuisz were more open to resolving the dispute and handing over the patent after they saw the strength of the evidence presented to jurors last week.

“I think the handwriting was on the wall,” Boies said.

Contact the reporter at jlove@alm.com.

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