Davie Boies, Boies, Schiller & Flexner ()
SAN FRANCISCO — Their resources spent after years of litigation, a pair of inventors accused of patenting an idea swiped from law firm files have let go of their attorneys to run their own defense.
Their courtroom adversary is someone even a tested trial lawyer might find intimidating: David Boies.
Richard Fuisz and his son, Joseph, are confronting the famous litigator, as well as tawdry allegations of theft and betrayal, in a trial that kicked off in San Jose federal court this week. Boies’ client, Theranos Inc., a high-profile medical testing startup, claims that the Fuiszes copied its invention for a cutting-edge personalized medicine system with the help of a family member working at McDermott, Will & Emery.
Joseph Fuisz, a Columbia Law School graduate, said in an interview that the accusations against his family are “preposterous,” but played up the David vs. Goliath feel of his predicament.
“We do have some severe structural imbalances as it were in terms of the advocacy horsepower,” he said. “On a level playing field … I would not be concerned about this case.”
Theranos’ patent applications were prosecuted by McDermott, where John Fuisz—Richard’s son and Joseph’s older brother—was once a partner.
The Palo Alto startup alleges that John Fuisz funneled confidential documents to Richard and Joseph that allowed them to obtain a patent that is a shameless copy of Theranos’ technology.
Both the firm and John Fuisz deny any wrongdoing and note that malpractice claims against them were tossed out. “Obviously, the misappropriation or theft theory is entirely without basis,” says Joseph Fuisz. “The plaintiff essentially relies on innuendo and paid expert reports.”
Theranos seeks to either invalidate the patent or substitute its founder, Elizabeth Holmes, as the inventor, in addition to recouping any revenue generated by the patent.
Jury selection in Theranos v. Fuisz, 11-5236, began Wednesday in U.S. Magistrate Judge Paul Grewal’s courtroom, and opening statements are expected on Thursday morning.
Richard and Joseph Fuisz filed a motion to go pro se in December, writing that they had already blown through more than $1 million defending the case and could not afford to spend more. The pair—who run various businesses such as Fuisz Pharma and also license and sell their patents—had been represented by Banie & Ishimoto of Campbell, Calif.
In a declaration accompanying the motion, Joseph Fuisz accused Theranos of trying to drag out the case and drive up the costs by refusing to limit discovery, spurning mediation and trying to delay the trial.
“My resources are finite,” wrote Joseph Fuisz, who lives in Surfside, Fla. “It’s not realistic for me—as a cost and economic matter—to employ counsel to defend this case.”
Boies declined to comment through a firm spokeswoman.
Theranos and Holmes, the company’s 30-year-old CEO, have captured interest in the Valley and beyond, nabbing a September feature in The Wall Street Journal. With just one drop of blood, the company can run dozens of tests.
Holmes, who dropped out of Stanford University to found Theranos in 2003, had ties to the Fuisz family before the discord erupted. She and her parents lived near the Fuiszes until she was 3, and the families remained in touch. Richard Fuisz, a prolific inventor, offered to help Holmes with Theranos, according to the company’s court papers, but wasn’t taken up on the offer.
Holmes hired McDermott to help manage Theranos’ intellectual property in 2003, apparently without realizing that John Fuisz was an IP litigation partner there. She now alleges that John passed her confidential files on to his family. Both electronic and hard copies of Theranos documents would have been accessible to any McDermott partner, according to the company’s trial brief.
In 2005, one week after McDermott lawyers filed a provisional patent application for Theranos covering bodily fluid analyzers, Richard Fuisz asked his lawyer to prepare a patent related to the same technology, the company alleges. Richard and Joseph Fuisz were eventually issued U.S. Patent No. 7,824,612, on which the court fight centers.
John Fuisz, who left McDermott in 2009, never represented Theranos. McDermott’s general counsel, Alan Rutkoff, said in a statement that its procedures conform to “the highest ethical standards.”
“Under McDermott policy, the secrecy of all confidential client information is maintained forever,” he said.
John Fuisz, who is expected to be called as a witness at trial, provided a statement denying any wrongdoing. After leaving McDermott, he founded the Fuisz-Kundu Group, a Washington, D.C.-based IP litigation boutique.
U.S. District Judge Yvonne Gonzalez Rogers, who oversaw the case before Grewal, dismissed legal malpractice claims against John Fuisz in 2012 on statute-of-limitations grounds. Theranos then sued McDermott for malpractice in Washington, D.C., in 2013, but a judge dismissed the case because it did not plead sufficient facts.
Ruling in September, Grewal agreed that Theranos had turned up virtually no direct evidence that the family made off with the company’s materials. But he rejected the Fuiszes’ motion for summary judgment, concluding that the question must be put before a jury.
“The case law surrounding both correction of inventorship and unjust enrichment claims is clear: circumstantial evidence can be enough to support a verdict,” Grewal wrote in the order.
At trial, Theranos plans to call experts to testify that it is highly unlikely that Richard and Joseph Fuisz patented the same ideas contemplated by Theranos without glimpsing the company’s secret documents. Boies also points out that when Richard reached out to his attorney about filing the ’612 patent, he had not done any work related to diagnostics for more than 20 years.
But Joseph Fuisz says his adversaries haven’t accounted for his father’s far-reaching curiosity. Richard has about 115 patents issued in his name, not to mention many more applications that were not granted, including one he drafted in the 1990s for a precursor to Bitcoin currency.
“He’s no Thomas Edison,” Joseph Fuisz said. “But you’re talking about a guy who has invented all sorts of medical devices, diagnostic devices, web browser functionalities—just extraordinary breadth.”
Since Theranos sued them in 2011, Joseph and Richard Fuisz have been issued 16 patents.
Before joining the family business 15 years ago, Joseph Fuisz was an associate at Sullivan & Cromwell. But he is quick to note he practiced corporate law, not litigation.
“In truth, I’ve never so much as defended a traffic ticket in my life,” he said. “A lot of things are just so foreign to me.”
Joseph said he has received little outside help with his case, noting a protective order prevents him from sharing most details with anyone outside the litigation. That, he said, “makes it a particularly lonely thing to proceed pro se.”
Nevertheless, he appears to have learned the lingo, echoing common refrains in IP litigation as he sums up the case against him.
But on Wednesday, Boies introduced a new wrinkle in the case, asserting in a letter to Grewal that there is no David vs. Goliath dynamic at work. According to the letter, Boies has learned the Fuiszes intend to have a Florida lawyer appear for Fuisz Pharma, the corporate defendant in the case, who they’d previously said wouldn’t participate.
Joseph said he and his father are combating Theranos to reclaim their reputations. He declined to say exactly how much the fight has cost them.
“I’m afraid my wife will read the article,” he said.
Contact the reporter at email@example.com.