Finjan patent lawsuit against Symantec back on track after patents escape IPR

By Gene Quinn
April 12, 2016

judge-gavel-courtFinjan Holdings, Inc. (NASDAQ: FNJN), the parent of wholly-owned subsidiary Finjan, Inc., announced several weeks ago that the Patent Trial and Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO) issued the final rulings on attempts by Symantec Corporation’s (NASDAQ: SYMC) to invalidate 8 different Finjan’s patents through inter partes review (“IPR”). In total, Symantec filed 11 separate IPR petitions, which collectively asserted 31 separate invalidity grounds. Finjan prevailed in 10 cases outright, with the PTAB refusing to institute IPR. In the 11th case the PTAB did institute an IPR, but only as to 1 of 4 asserted grounds. In total, Finjan went 30 for 31 on asserted invalidity grounds, and 10 for 11 on institution overall.

This IPR battle unsuccessfully waged by Symantec against Finjan’s patents began after Finjan filed a patent infringement lawsuit in the United States Federal District Court for the Northern District of California. It is worth noting that Finjan, founded in 1997, developed and patented the cybersecurity technology that makes up its patent portfolio today. Since the sale of its hardware and software operations Finjan’s primary source of revenue has come from the licensing and enforcement of its patent rights and, therefore, some may say that the Finjan of today is a non-practicing entity. However, calling Finjan an NPE is not really accurate. Finjan Holdings, the public parent, operates a number of investments and operating businesses, including an investment in JVP Cyber Labs, their advisory services business CybeRisk Security Solutions and Finjan Mobile, which is a subsidiary.

Even if you were to lump Finjan incorrectly into the NPE category, as many do try and do, they defy classification on yet another important level — where they choose to litigate when necessary. Unlike many non-practicing entities who only file patent infringement lawsuits in the Eastern District of Texas, when they must sue Finjan frequently sues in the Northern District of California, as they did here. This sets them apart from your typical non-practicing entity or NPE.

The Northern District of California is where Finjan is headquartered, and it is also frequently where the defendants that they are suing are located. Frankly, I’m not sure what this means, but if Finjan’s patents are strong enough to survive IPR at the PTAB and the company is confident enough to fight the case in the Northern District of California that should likely convey something about the relative strength of these patents and likely strength of the infringement case. Finjan obviously doesn’t believe they need any gimmicks to prevail, and are perfectly fine fighting these disputes where they are most convenient to everyone. Not your average NPE indeed!

The patent lawsuit brought by Finjan against Symantec was filed in July of 2014 and alleged infringement of eight U.S. patents. The Finjan patents at issue in the lawsuit, which were also the same patents challenged by Symantec at the PTAB, are:

U.S. Patent No. 6,154,844, which is titled System and method for attaching a downloadable security profile to a downloadable, and which relates generally to computer networks, and more particularly provides a system and method for attaching a downloadable security profile to a downloadable to facilitate the protection of computers and networks from a hostile downloadable.

U.S. Patent Nos. 7,613,926, which is entitled Method and system for protecting a computer and a network from hostile downloadables, and generally relates to computer networks, and more particularly provides a system and methods for protecting network-connectable devices from undesirable downloadable operation.

U.S. Patent No. 7,756,996, which is entitled Embedding management data within HTTP messages, and relates to the efficient delivery of management data between a network management server and multiple client computers.

U.S. Patent No. 7,757,289, which is entitled System and method for inspecting dynamically generated executable code, and relates to computer security generally and more specifically to protection against malicious code such as computer viruses.

U.S. Patent No. 7,930,299, which is entitled System and method for appending security information to search engine results, and relates to a system and method for combining operation of a search engine with operation of a content security filter in order to provide security assessments for web pages and media content located by the search engine.

U.S. Patent No. 8,015,182, which like the ‘299 patent is entitled System and method for appending security information to search engine results, and similarly relates to a system and method for combining operation of a search engine with operation of a content security filter. Both the ‘299 and ‘182 patents share a common priority claim to a provisional patent application filed on November 30, 2015.

U.S. Patent No. 8,141,154, which is entitled System and method for inspecting dynamically generated executable code, and similarly to the ‘289 patent relates to protection against malicious code such as computer viruses.

U.S. Patent No. 8,677,494, which is entitled Malicious mobile code runtime monitoring system and methods, and generally to computer networks, but more particularly provides a system and methods for protecting network-connectable devices from undesirable downloadable operation.

The final summary of Symantec IPR challenges against the aforementioned Finjan Patents is as follows:

Only the claims 1, 2, 5, 6, 10, 11, 14, and 15 of the ’494 patent were instituted for IPR as likely being invalid under 35 U.S.C. § 103. The other patents, having escaped IPR, should be practically bulletproof in patent infringement litigation. Although the estoppel provisions of 35 U.S.C. 315(e) only apply to a final written decision, the likelihood that the district court will view these patents as stronger and less likely to seriously consider a validity challenge rises dramatically.

The PTAB applies a broader claim construction (i.e., broadest reasonable interpretation) than does the district courts (i.e., the Phillips standard), which makes it easier to invalidate claims at the PTAB. The PTAB also refuses to presume patents are valid, which district court must do (see 35 U.S.C. 282 and i4i v. Microsoft). Those two factors combined with the PTAB’s historical willingness to institute IPR and invalidate claims mean Finjan will argue that if even the PTAB didn’t think there was chance the claims were invalid there could not be any viable chance that the district court would come to a contrary conclusion apply more strict standards. This argument has proven quite persuasive when it has been used in patent litigation up to this point. That should mean that the Finjan dispute with Symantec will become a question about whether Symantec is really infringing, that is assuming Symantec does not decide to settle and take a license.

In any event, the case is already moving forward. The stay put in place by Judge Haywood Gilliam pending institution decisions in the eight aforementioned IPR petitions has already been lifted. There was a case management conference last week, and the parties have been ordered by Judge Gilliam to submit a joint case calendar by April 15, 2016.

UPDATED April 13, 2016 at 10:05am to correct Finjan’s founding date and to reference several of Finjan’s investments and operating businesses.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 6 Comments comments.

  1. Moocow April 12, 2016 1:52 pm

    Time will tell whether your prediction about the bullet-proofing of these patents is right. Denials of IPR institution have meant precious little in the past. Petitioners can just re-file their unsuccessful petitions, using the previous denial as a how-to guide, until they get it right. Litigation time bar? No problem – just arrange for a trusted proxy to file further IPR petitions. If an IPR is finally instituted, the PTAB will happily grant your untimely petition and join you to the ongoing proceeding. There’s no end to it.

  2. alex s April 12, 2016 2:45 pm

    I know there is anger over IPRs – but isn’t this exactly why they were created? To streamline litigation on the merits (defined as whether there is infringement and damages, if so)?

    If anything, the estoppel provisions could be broadened to include those argument raised in a denied petitions (with a sub-exception (1) for those grounds viewed as redundant or (2) statutorily mandate that the PTAB must affirmatively state ya or nay on each ground instead of the redundancy path, therefore creating a complete prior art bar for those items).

    In the rare cases where there are non-prior art patentability/enforceability issues, yeah, the overall time average may increase. But those are rare, right? So District Courts can address the important things (infringement and $ damages).

    Before anyone gets all excited – I understand the problems with (1) any constitutional / property right violations of the IPR process; (2) any process problems by over zealous PTAB panels; and (3) USPTO process selection problems (choosing non-reviewability or BRI).

  3. Gene Quinn April 13, 2016 9:46 am

    Moocow-

    You are most certainly correct to raise the issue of continuous IPR challenges. That type of harassing filing of IPRs is a very real problem, and one that absolutely has to be fixed if we are going to continue to have a patent system. Commercially valuable patents simply cannot be subject to never ending challenges.

    When I was talking about these patents being bulletproof I was mostly referring to this particularly litigation. I can’t for the life of me see a district court judge taking a validity challenge at all serious in the pending litigation that was stayed specifically so Symantec could take what was supposed to be its best shot at the PTAB.

    As for the PTAB granting untimely petitions, I don’t know about that. All I’ll observe is that they have denied timely petitions and motions so if they are granting untimely petitions and motions the PTAB is even far more of a kangaroo court than I feared.

    -Gene

  4. Curious April 13, 2016 10:07 am

    To streamline litigation on the merits (defined as whether there is infringement and damages, if so)?
    Uh no. First, the IPR process can hardly be described as “streamlined” — if by streamlined you mean substantially less expensive. Anon likes to quote Einstein’s “Everything Should Be Made as Simple as Possible, But Not Simpler.” In this instance, the IPR process is “simpler” — it denies certain protections previously granted to patent holders (part of their “bundle of rights” from obtaining a patent) in order to “streamline” the process.

    IPRs are a corporate giveaway — it allows large infringers to grind small entities with less staying power into the ground.

  5. angry dude April 13, 2016 10:49 am

    I am wondering when Finjan actually sees any money in the bank for their patent enforcement efforts ? In 3 years, 5 years, 10 years.. or maybe never ?

    Just how much patience investors should have to give a typical small NPE any money to enforce its patents, even highest quality patents ?

  6. Post Script April 13, 2016 3:02 pm

    Gene @3,

    I think what moocow is referring to was Apple’s ability to circumvent the time bar IPR filings in its case against VirnetX by requesting joinder of their petitions with IPR petitions filed by Mangrove Partners.

    PTAB denied Apple’s IPR petitions (and those of its proxies) due to the 1 year statute of limitations. However, Mangrove shorted VirnetX stock and then filed IPR petitions. Apple requested joinder, which the PTAB granted, despite the initial 1 year statute of limitations.