Posts Tagged: "Finjan v. Blue Coat Systems"

Obtaining a U.S. software patent is still harder than it was five years ago, but studying these “lighthouse” cases can improve one’s chances of success. While the Federal Circuit’s decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) and the USPTO’s guidance to patent examiners on the Berkheimer decision have recently improved the landscape for software patents, the following cases contain critical lessons for drafters that can further ensure claims are patent eligible.

Last week, in Ancora Technologies v HTC America, the Federal Circuit reversed a lower court’s invalidity ruling under 35 USC §101 by concluding that Ancora’s claimed subject matter was concrete—not abstract—because it assigned specific functions to specific parts of a computer to improve computer security… This case is yet another in a string of post-Alice cases suggesting that patents should be drafted with an emphasis on the technical problem and technical solution delivered by the claims.

Patent damages law is one of the most complex areas in patent law and it is constantly evolving. Attorneys and courts often confuse the principles and get the law wrong. Further, even without the backdrop of constantly evolving and complex damages law, proving damages at trial is one of the hardest aspects of patent litigation. And properly apportioning damages can be one of the most difficult aspects of damages law to get right. The Federal Circuit’s two recent decisions in Exmark Man. Co. v. Briggs & Stratton Power Prods. Grp., No. 2016-2197, __ F.3d __ (Fed. Cir. Jan. 12, 2018) and Finjan, Inc. v. Blue Coat Sys., Inc., No. 2016-2520, __ F.3d __ (Fed. Cir. Jan. 10, 2018) shed light on calculating damages for multi-component products. Together, these cases show that the royalty rate must be apportioned based on the incremental value the novel elements add to conventional elements of a claim, while the royalty base must be apportioned based on the incremental value the patented features add to the accused product.

According to the Federal Circuit, The claims simply do not simply recite an abstract result. Because the claims recite specific steps that accomplish a desired result, the the claims were found to be directed to a non-abstract improvement in computer functionality, not an abstract concept of computer security. Nevertheless, the Federal Circuit said the jury verdict of infringement relative to the ’968 patent should be set aside because there is no evidence that the accused product includes a feature claimed in the patent. Several errors were identified with respect to the royalty calculation of the ‘844 patent, which the Federal Circuit remanded to the trial court for further consideration. For the ’731 and ’633 patents, Finjan’s expert did apportion the revenues comprising the royalty base between infringing and non-infringing functionality of Proxy SG. The jury’s damages awards for infringement of these two patents were affirmed.

In Finjan, Inc. v. Blue Coat Systems, Inc., the United States Court of Appeals for the Federal Circuit recently affirmed-in-part, reversed-in-part, and remanded the case to the district court. Notably, however, the Federal Circuit found no error in the district court’s subject matter eligibility determination, meaning the claims of Finjan’s ‘844 patent were patent eligible under 35 U.S.C. 101. Perhaps more remarkable, the claims of the ‘844 patent relate to virus-screening and were determined to be not abstract. Still more remarkable, the author of this Federal Circuit decision was Judge Dyk, who is not know as a zealous advocate for software patent eligibility.