Last week 13-year-old wearable health tracking device company BodyMedia formally served Basis Science, a startup working to bring its wearable tracking device to market, with a lawsuit that claims Basis' offering infringes on six patents held by BodyMedia in more than 100 ways. Basis filed its response and counterclaims within days.
I had a chance to discuss the suit with the CEO of BodyMedia, Christine Robins and the CEO of Basis Science, Jef Holove in phone interviews last week. Basis believes the timing of the lawsuit was curious and an attempt to hinder its product's launch, that the patents BodyMedia claims it infringes will not hold up in court, and that while it believes its device does not infringe on those patents it doesn't believe BodyMedia can know that anyway since its product has not yet launched.
In the lawsuit BodyMedia explains that it bases much of its understanding of Basis forthcoming Basis Band device on press interviews and an on-site demo that Basis employees did for BodyMedia representatives at the CES (Consumer Electronics Show) event in Las Vegas earlier this year.
"From our perspective we had a really good CES with good momentum and buzz," Holove told MobiHealthNews in an interview. "They were just down the aisle from us at CES. They announced the suit involving six different patents. Our original take was it seems curious that they would announce a suit like this before we even launched a product. They don't have any firsthand knowledge of our product, what we are doing, or even the inner workings of our system. Felt to us that the basis of the suit was largely assumptions. On top of that, because we are still in development, our product continues to evolve. So it's pretty hard to understand the foundation of their assumptions. Because of that, and the timing of it, it felt to us like this is really aimed at trying to hinder us from launching into the marketplace. For us, that is really the most disappointing aspect of this."
BodyMedia's Chris Robins says there was nothing unusual about the timing of the lawsuit.
"The [lawsuit] was formally filed on February 2nd. They were aware of it on February 2nd. The court allows a certain amount of time until we have to to formally serve them papers. It has been in the court docket and the public domain since then. It is their responsibility to contact us if they would like to discuss it. This was just a formality. There is a period of time from when you file to when you serve them. We were with within the confines of the law in terms of timing," Robins said.
The most striking thing about my conversations with both CEOs was the common claim that the other should have contacted them before things got to this point.
"If they had a legitimate concern about intellectual property but still had in mind that it was good for the marketplace for new innovation to come, for consumers to have more choice, for there to be new products and solutions in the market," Basis' Holove said. "If they really felt that way, then they could have come to us and expressed their curiosities or concerns and we could have put their minds to rest. They haven't approached us for any conversations about this, which makes us feel like the suit is really aimed at trying to hinder our launch, in a space that we believe desperately needs new tools to help people live healthier lives."
BodyMedia's Robins explained that her company highly values intellectual property. In its most recent round of $13 million in funding, just announced this past week, the company notes plans to continue to build out its R&D and IP. When asked, Robins said that this lawsuit was the first time the company had formally filed a legal lawsuit against another company.
As for Holove's claim that the patents are invalid because there is so much prior art -- pre-existing products, literature, and patents, Robins says that is "an expected response." "Obviously we have a US patent office that has a process and we have spent years and millions of dollars prosecuting our patents... [Basis] is entitled to their opinion, but we have gone through the process with the patent office and the patent office has played their role."
Robins also noted that there are a lot of new competitors in the market, but she views that trend as a good thing.
"The market has finally caught up to be accepting of these types of technologies," she said. "There are a lot of competitors. Competition, I view, as very good. Look at my background. I have competed against some of the biggest companies in the world. That is not a concern -- this isn't a competitive thing. Competition is good [since] it brings awareness and credibility to the category. I think about two plus years ago when I joined BodyMedia we were educating people about the category in general and why it could add value to their business. Now, when we talk to buyers and partners, they are educated about what's going on in the space. So the conversation is about how we are different, how we add value to their business model that is unique from everybody else. I love that... Going back to this lawsuit. This is not about competition. That's the challenge, the fun part of being in business."
Holove disagrees that the suit is not about competition:
"The news everyday is filled with the gravity of the health situation in the US. I think we need more innovation not less. It is moves like this that stifle innovations in this market," he said. "Ultimately companies like our should be all about what is good for the consumer, for the user, what's good for this greater issue? If this case results in us and other companies being more free and their patents being invalidated then it will certainly lead to more innovation, new products, and more consumer choice and tools [for consumers] to get healthy."
My last question for Holove was whether this lawsuit had hindered his product's launch, since that was its aim from his perspective.
"Well, I guess what I have to say to that is, clearly an issue like this is time consuming, distracting, and unfortunately, it takes a lot of money, which is always a consideration for a startup, but no, ultimately, it will not prevent us from launching," he said. "We are too far along now and we feel too strongly about what we are doing. Yes, it is unfortunate that it takes us away from focusing on what we'd like to be focusing on, which is refining the product... It is still our first priority to launch something that is unique and meaningful in this space. We have learned a lot from the testing and feedback we have gotten so far and that will shape the experience that we will launch very much for the better. It will not be simply be what everyone else is doing in this space in terms of charts and graphs."
We'll be sure to follow the case as it unfolds.
