Turns out she has around 200 patents (with other people mostly).
So if her tech didn't work, then why didn't people figure it out sooner? Why did it take a journalist from WSJ to find the fraud?
How come some prominent physicist or biologist doing "competition research" didn't declare that the patents were based on bogus claims?
Patenting a completely ridiculous and impossible idea is quite straightforward if you know the system and have the money and reputation.
Journalists are notoriously bad at technical due diligence, but the fact is even trained scientists and engineers can be duped, particularly when access is limited.
Having been in a similar situation (not the federal one), where something looked fishy in a company I was involved in (and ended up being revealed as fishier than fish), I wouldn't be at all surprised if it comes out that the patents were fine, the ideas were fine, the talent had the skills, and it would have been less work on everybody's part to actually build it than to lie, cheat, and misrepresent it.
I have never been to or interviewed anywhere more paranoid/aggressively secretive than Theranos, and that includes military bases and classified government installations. This should be the moral of the story: investors should take as a red flag companies that work that hard to show you they're hiding their technology.
There are some really nutty patents out there.
It's quite common for companies to use a mix of patents and trade secrets to protect their technology. Filing for patent protection is a tradeoff - you gain the exclusive right to use that invention for 20 years, but the invention becomes public knowledge. In many cases, that tradeoff isn't worthwhile. The fact that a set of patents don't add up to a working process is quite normal.
or not even trying to.
She was able to defeat him by getting better lawyers. The book says she was paranoid, but also shows that this is kind of the environment she was in. This kind of abuse of the patent system is normalized within those vaunted halls of power and wealth. Big companies all have their portfolios of questionable patents and the lawyers sort it out in court. She wanted to build her portfolio just like anyone else in that situation. She was obsessed with Steve Jobs... people forget all the crazy patent lawsuits he was involved in, going back to the 80s.
I think the current policy is they are only patentable if there is a working unit that runs for at least a year when left alone in the patent office.
Poo poo for the men who were fished... don’t s*!t where you eat.
Seems like a sort of ponzi scheme where the 'financial instrument' is a 'technology vision'.
Would not be surprised if Holmes pay anything to the earlier investors, with the money of the new ones...
Her life's work, in her words, was 'redefining the paradigm of diagnosis' ( https://youtu.be/5tEeSHy1x98?t=1m19s )
Very 'Silicon Valey' lingo in her speech: 'Reinventing / Redefining / Reimagining XYZ'. With a portfolio of groundbreaking patents...
It's a warning against poisoning an environment on which you depend that has been applied to lots more than office romances, though that may be the most common use in some social circles today.
For startups marketing to investors can be a key goal of patents.
Here are some examples that predate that article:
This discussion from 2013 talks about Theranos doing full blood draws which they wouldn't need to do if their technology worked:
One of the compelling things the Blawg author did was note this passage in the New Yorker story 
> Holmes also pointed me to a pilot study published by Hematology Reports, an online-only peer-reviewed journal; she is listed as a co-author. The report, released in April, concluded that Theranos tests “correlated highly with values obtained” from standard lab tests.
He looked up that journal, which he had never heard of before, and found that it was an Italian company that charged $500 to publish. He found the Theranos study , which actually did contain specific scientific detail, but not the good kind:
> So, to summarize, the study to which Ms. Holmes referred that showed Theranos “correlated highly” with standard lab tests looked at one biomarker (C-reactive protein) in a grand total of six patients and was published in an online-only Italian journal.
> "A chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel."
2) Patents are really hard to read
3) The difference between something that looks plausibly like it might work when written down and something that actually works can be hundreds of millions of dollars of bugfixing.
There are a few patents that I've found informative and useful to read: Texas Instruments' calculator patents from the 1970s, the ENIAC patent, Astrolite, and Autotune. These are the rare patents where they actually explain things in detail, it reads like it was mostly written by an engineer rather than lawyers, and I know more after reading the patent than before. (Just want to give some recognition to the rare non-awful patent.)
Edit: I looked at a few of the Holmes patents. I'd put them in the awful category. Hundreds of pages of worthless discussion, followed by claims that are semi-incomprehensible, seem obvious, and have little to do with the earlier hundreds of pages. They have lots of nice graphs and diagrams though.
I second that. In a previous life, I had to read and understand a few dozens of patents. Imagine page after page of buzzwords, unjustified claims, approximate logic, vague and meaningless sentences, clearly designed to be write-only.
In my experience, reading cutting-edge research papers in domains with which I'm barely familiar is so much easier.
But that is a poorly-written patent. As a competitor you can just read it, do the same thing but substitute something equivalent for one part, and you've just stolen the research investment that led to it.
A good patent has to describe the broad category (the innovation). And suddenly you go from clearly describing an example to using weird high-level vocabulary.
> Seems rather sad state of our Patent system here in the US where a 19 year old with no prior technical background, who was a Chemical Engineering student, a sophomore no less (meaning barely finished or finishing General Ed. requirements and just starting Major courses), can write and file for a highly-technical patent involving radios, sensors, embedded devices, and the like...
> It's very doubtful she understood how any of that works, or would work in her product/patent. Underlying story seems it's absurd this was patent-able.
Separately, it's quite common for people to patent things that don't work or can't be directly implemented as stand-alone things at all. Indeed, defendants in patent litigation often point out the many early patents on "flying machines" as proof that the issuance of a patent is not proof that it would lead to a working thing.
You have to understand that most tech news places question the substance of most press releases. Especially if they are medical.
For example, no-one questions AirBnB's core buisness model: listing holiday lets. There is literally nothing+ new about airBnB. Uber is the same, its a taxi service that is subsidising users.
Babylon health is another example, which has yet to really break mainstream news.
They have run trails for replacing NHS 111, They make a lot of noise about using AI and other such bollocks, but actually its a decision tree with a nice natural language system infront.
What they don't say in the blurb is that its less effective than the current telephone system. Parts of it are deemed unsafe by their own medical staff, and there is no rigid medical testing to prove it's safety.
None of this matters yet because its an app, and it has "AI".
Holmes and Theranos rode the perfect wave built by the media being thirsty for a young, smart (blonde) female. It's so obvious when you look at it in hindsight.
Hilariously, even after the total collapse this topic is often taboo.
I can't help but feel for sorry for the young women out there creating actually useful innovations.
What media wave had happened at that point? From what I've seen, serious media coverage appeared in 2013, when they left "stealth mode" with the promise of the droplet testing, almost a decade after the initial investment.
The idea is very compelling. Who wouldn't want it to be true/possible? And it's obvious to anyone how valuable such a thing would be.
Young woman founder/CEO (& paper billionaire as a result).
Dropout from Stanford.
On the cover of magazines.
Big names on the board.
Association with Bill Clinton, etc.
My point is that if sex appeal was the core factor in her success, we would have significantly more female founders because almost all investors are men. It’s more likely to me that she was a amazing self promoter who didn’t let reality get in her way, similar to Steve Jobs.
Kissinger, who is ninety-one, told me that Holmes “has a sort of ethereal quality—that is to say, she looks like nineteen. And you say to yourself, ‘How is she ever going to run this?’ ” She does so, he said, “by intellectual dominance; she knows the subject.”
Board members are clearly charmed by Holmes. She is a careful listener, and she is unnervingly serene; employees say that they can’t remember an instance when she raised her voice. “She has sometimes been called another Steve Jobs, but I think that’s an inadequate comparison,” Perry, who knew Jobs, said. “She has a social consciousness that Steve never had. He was a genius; she’s one with a big heart.”
The United States had a working requirement only between 1832
and 1836, and only for foreigners.
So for the most part, if you can think it, you can patent it.
Lots of companies patent complete bunk, and I’ve never seen anyone get called on it. It seems like investors don’t really read them.
I have also seen companies patent things that won’t work and that they have no intention of working on - with the rationale that it will confuse competitors.
Given what we know about Theranos it’s entirely plausible that some of their patents were intended as “smokescreens”.
That said, microfluidics (where you use minimal sample sizes and minimal reagents and such) is a real and growing thing, and I assume that she was just trying to ride that wave. But it turns out that this doesn't work so well for blood samples.
Incidentally, the book does contain a lot of discussion about patents. Holmes offended a longtime family friend, Richard Fuisz -- who, incidentally, was a former CIA agent -- around 2005-2006. He was mad Holmes and her family never consulted with him about the Threanos idea, so he wrote his own patent (made public on Jan 3, 2008) that he described as "the Theranos killer". It turned into a big legal battle that caught the eye of a Fortune writer, who ended up writing the first big magazine cover story on Holmes/Theranos:
The whole subplot is quite remarkable. Fuisz's battle with Theranos led to some damaging testimony in deposition. Fuisz's son became determined to take down Theranos and from what I can tell, had a big (but mostly unknown) part in the unraveling of Theranos. He found in a Google search a blog post  (now taken down) that made serious accusations about Theranos after the New Yorker cover story.
Joe Fuisz, Richard's son, ended up contacting the blog author and telling him about the Fuisz vs. Holmes fight . This blog author ended up contacting a WSJ reporter that he had previously worked with, John Carreyrou.
So rather than science/engineering directly leading to Threanos's downfall, it seems a personal spat played a bigger part. And ironically, this spat involved a guy who wanted to out-patent-troll Elizabeth Holmes.
An excerpt from the book about what started Richard Fuisz's feud:
Richard Fuisz was a vain and prideful man. The thought that the daughter of longtime friends and former neighbors would launch a company in his area of expertise and that they wouldn’t ask for his help or even consult him deeply offended him. As he would put it years later in an email, “The fact that the Holmes family was so willing to partake of our hospitality (New York apartment, dinners, etc.) made it particularly bitter to me that they would not ask for advice. Essentially the message was, ‘I’ll drink your wine but I won’t ask you for advice in the very field that paid for the wine.’ ”
Carreyrou, John. Bad Blood: Secrets and Lies in a Silicon Valley Startup (p. 71). Knopf Doubleday Publishing Group. Kindle Edition.
 edit: Here's an archive snapshot of the now taken down blog post: http://archive.is/BGtRJ
Carreyrou gives a lot of credit to the author for giving the tip that turned Carreyrou's interest toward Theranos. Strangely, there's not mention of why the blog suddenly shut down. If you google around, you'll see it closed up a few weeks after Carreyrou's first big Theranos story.
 edit: via a comment on the oldest HN post (Sept. 2013) about Theranos, I found a link an online summary of the patent dispute:
"Small Scale Patent Acquisition and Publication for the Purposes of Misleading Investors and Customers on the Feasibility of Large Scale Research and Development Efforts"
There timing was excellent too. I actually remember thinking a few years ago that all one would need to do to design something like the theranos product is run enough blood samples through a good mass spec and load the date into map reduce. But based on research since then "enough" turns out to be a whole lot.
And there are also scientists who think that ideas like that are ridiculous and biomarkers for certain diseases (like early stage cancer) will never be findable in blood. And many of them are vocal about the fact. But since there are experts on both sides that isn't a clear indictment of the idea.
It is also worth noting that the "crisis of reproducibility" is bad enough in bio that I wouldn't haven been surprised if Theranos had very promising early results that didn't pan out. Thats happened to a lot of people.
Personally I fully believe we'll see a Theranos like product in the next 20 years around the time protein sequencing and mass spectrometry tech gets cheap enough to do studies with on ~millions of people instead of ~thousands.
I was surprised to learn that from a patent attorney, but it seems to be common knowledge, e.g. . Upon reflection, that's the only way it can work. A generalist patent examiner could never understand all the inventions given the volume of applications they must handle.
I have no idea about these patents, but it's certainly possible that those particular patents describe functional subcomponents/processes of an overall system that doesn't work.
> How come some prominent physicist or biologist doing "competition research" didn't declare that the patents were based on bogus claims?
I'm not sure what "competition research" means. In any case, approximately 0% of prominent scientists read patents. Patents are written both for and by lawyers/courts.
1) entrenched competitors that want to protect market share.
2) hedge funds that start OTC trading and are shorting.
3) insiders that want to vaporize the company as part of a bizarre money laundering scheme. (Most likely, although very bizarre, option imo.)
4) the rare journalist that does investigative research.
5) the rare VC that does dd.
So something changed to interest one of these groups. Prominent physicists and biologists couldn’t care less what private companies are doing.
Unless, of course, they are sniffing around looking for funding. Consider for example the current NIH/alcohol kerfuffle.
However, the real reason is that patents are bogus, and more or less all they assert is that this person or company filed the paperwork first. The Patent Office has not even close to the amount of staff they would need to actually verify that the patents they grant are working.
> IN APRIL, Theranos informed Ian that he had been subpoenaed to testify in the Fuisz case. The prospect of being deposed made him nervous. He and Rochelle discussed the lawsuit several times. Rochelle had once done work as a patent attorney, so Ian asked her to review Theranos’s patent portfolio in the hope that she could give him some advice. While doing so, she noticed that Elizabeth’s name was on all the company’s patents, often in first place in the list of inventors. When Ian told her that Elizabeth’s scientific contribution had been negligible, Rochelle warned him that the patents could be invalidated if this was ever exposed. That only served to make him more agitated.
Gibbons was the Theranos chief scientist who committed suicide in 2013:
- CEO ego.
- Although patents by employees are assigned to the company and unequivocally owned by the company, many early stage (and especially paranoid) CEOs worry about the optics of having many named inventors leaving the company. If you're Google, IBM, etc with 100K employees filing 10K patents per year no one cares if X number of those employees in listed filings leave the company. If you're a relatively small, early stage company with a few hundred patents losing just a few key employees named on filings raises red flags for investors, journalists, etc as they could represent a substantial portion of your "inventors"/IP/brain trust, etc and thus, your valuation. Of course this kind of action is very transparent but with her own "reality distortion field" I wouldn't be surprised if anyone who reviewed these thought she was actually responsible for some portion of the invention.
- Some companies have a very broad policy for who to include as a named inventor. She could have been part of a single conversation/meeting/etc and required listing.
- CEO ego. Not a typo, I listed this twice because in this as in many of these cases, ego is likely 90% of the reason she's listed on these. Frankly this kind of behavior is insulting to the other named inventors that actually did the work, but what recourse do they have? Is battling the CEO to get her name off a filing worth leaving your job for?
(Inactive) patent attorney here. Your impression is correct (for the U.S.; I can't speak to other places): ALL "co-inventors" MUST be listed as inventors, and ONLY they may be listed. A "co-inventor" is someone who contributes to the "conception," i.e., the complete mental picture, of the subject matter of at least one claim in the patent application. 
In particular, it seems that the microfluidics stuff needs new inventions to make it work in practice. So presumably those aren't described in the patents. Although it wouldn't be the first time that management overlooked solutions provided by their own researchers.
> The specification [of the patent] shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same
It's the raison d'etre of patents. A time-limited monopoly in exchange for full documentation of the invention for the long term public good.
If the method would work in general, then yes, the inventor with the patent can wield them against anyone who implements that method - even if the inventor wasn't able to build the apparatus due to expense or difficulty; that's part of the original goal of patents, so that the inventor can fundraise for building the device without the funders just building it themselves after being convinced that it will work.
If the method is bullshit and can't be used to achieve the intended goal, then the patent can't be used against someone who succeeds, since they would succeed with a substantially different method that's not covered by the patent.
Whoever ends up liquidating Theranos will be in a position to make a call with licensing and enforcement, assuming, of course, they don't let the patents lapse (which is probably a shorter timeframe than a complicated bankruptcy will take).
Letting the patents lapse is a deliberate strategy sometimes (it's more a defensive rather than offensive approach, to block other actors from blocking you from your own technology).
It's also an alternative to peer-reviewed journals for "publishing" your ideas.
Their philosophy can best be summarized as, "Rubber-stamp 'em all and let the courts sort 'em out." We all get to pay for that.
Or Magic Leap https://en.wikipedia.org/wiki/Magic_Leap
> In December 2017, UK IT news site, The Register, reported that Magic Leap is a vaporware company that "has received nearly $2bn in funding over four years, values itself at $6bn, and has yet to produce anything but fake technology."
> On March 7, 2018, Magic Leap raised $461 million in Series D funding led by the Public Investment Fund of Saudi Arabia, the country's sovereign wealth fund.
Half a billion dollars for vaporware?
But there are lots of fun ways to spend your money: https://en.wikipedia.org/wiki/Cal_3
> Cal 3 is a state ballot initiative to split the U.S. state of California into three states. It was launched in August 2017 by Silicon Valley venture capitalist Tim Draper.
Reminds me of my favorite ever Richard Pryor joke: "Cocaine is Nature's way of telling you, 'You have too much money.'"