ArsTechnica published an excellent piece on how the United States’ “broken” patent system permitted Theranos to obtain hundreds of patents for technology that did not work and did not meet the “enablement” requirement of 35 U.S.C. section 112. According to author Daniel Nazer, the USPTO did virtually nothing to ensure that Theranos’ technology had been reduced to practice or that its disclosures would enable others to use the technology. Based on the strength of its patent portolio, Theranos was able to solicit hundreds of millions in investments from venture capitalists and patent enforcement entities.
The Theranos saga stands as a stark reminder to businesses that the mere fact that a patent exists is meaningless absent proven technology behind it. In other words, it is the technology that is the asset – not the patent. Businesses should keep in mind that patents exist to simply stake out a “claim” for the technology. Like a claim for a gold mine, a patent claim is worthless if there is no underlying value.