Five Finjan Patents Invalidated as Indefinite Despite “Convenient” Testimony from Plaintiff’s Expert

March 26, 2021

Finjan Holdings, Inc. has seen a new setback in its Southern District of California lawsuit against ESET (3:17-cv-00183), roughly a year after the first wave of the COVID-19 pandemic ended a trial in the case three days in. On March 23, District Judge Cathy Ann Bencivengo invalidated five of the six anti-malware patents-in-suit, ruling that “convenient” yet unsupported testimony from the plaintiff’s expert on the meaning of the term “downloadable” failed to overcome the defendant’s argument that the patents’ claims are indefinite. That ruling follows another notable decision against Finjan in January, when Northern District of California Judge William Alsup largely granted Juniper Networks’s request for attorney fees due to the NPE’s litigation conduct in a case that he deemed a “fiasco”.

Finjan, which was acquired by Fortress Investment Group LLC in July 2020, sued ESET in January 2017, accusing the company of infringing six patents (6,154,844; 6,804,780; 7,975,305; 8,079,086; 9,189,621; 9,219,755) through the provision of various cybersecurity products. Five of those six patents (all but the ‘305 patent) include the contested term “Downloadables”—the capitalization of which “signal[ed that] it is a specifically defined term”, as later observed by Judge Bencivengo. Significantly, the term also appears in other Finjan patents, though as Judge Bencivengo further noted in her March 23 order, courts have defined it at varying levels of specificity. For instance, one court construed the term as used in the related 6,092,194 patent as “an executable application program which is downloaded from a source computer and run on a destination computer”. However, Judge Bencivengo faulted subsequent courts for incorporating that definition by reference for other patents without accounting for narrowing language in those patents—including one ruling that incorporated the aforementioned “broader” language from the ‘194 patent for another (6,480,962), even though the latter explicitly requires that the “executable application program” be “small”. Judge Bencivengo’s November 2017 construction of that term, in contrast, inserted that qualifier—defining “Downloadables” as “a small executable or interpretable application program which is downloaded from a source computer and run on a destination computer” (emphasis added).

The inclusion of the term “small” would ultimately trigger the just-resolved dispute over indefiniteness. In April 2019, ESET moved for summary judgment of invalidity on that basis, arguing that a person with ordinary skill in the art as of January 27, 1997, the filing date of the related 6,167,520 patent, would not have known “what would constitute ‘small’ with respect to ‘executable programs from a source computer that run on the destination computer’”. The company cited alleged inconsistencies in Finjan’s expert testimony on the subject, arguing that the NPE had failed to provide objective boundaries for the upper limit of “small”—boundaries that were not reflected in the intrinsic record, asserted ESET. Finjan, for its part, pointed to example programs in the patent disclosure that would allegedly provide adequate notice to such a person of skill. Concluding that the record at that point was “conflicted” on this issue, the court denied ESET’s motion in November 2019 without prejudice to refile.

The parties then revisited the definition of “small” when the case went to trial in March 2020, with Finjan’s expert Eric Cole testifying that “an application would be understood to be small if it ‘did not require installation’ and opined that ‘small’ depends not on size but on the function”. Under his definition, a “small executable is an application that does not require installation[,] is ‘self-contained’[,] and is ‘just running automatically’[, . . .] which is ‘typical if you go to any website nowadays,’ whereas an executable that is not small ‘requires installation’ and has ‘a lot of shared libraries and [DLLs] and other programs’ in order to run”. On the trial’s fourth day, however, Judge Bencivengo declared a mistrial in light of the pandemic with the agreement of counsel—though, crucially, after Cole finished his testimony.

Based on that testimony, the court subsequently permitted ESET to renew its summary judgment motion, with the defendant arguing in August 2020 that Cole’s testimony failed to fix any of the defects it had identified—leaving “Downloadables . . . hopelessly indefinite”. Indeed, the company noted that “size does not matter when determining what constitutes ‘small’ because a two terabyte Downloadable would meet his ‘construction’ of the term ‘small’” (emphasis in original).

Judge Bencivengo agreed with ESET in her March 23 order granting the defendant’s motion, faulting Finjan for “present[ing] an explanation how a skilled artisan would interpret ‘small’ that was neither disclosed in his previous declaration to the Court . . . or anchored to the specification or prosecution history”. She underscored that the NPE “never offered evidence of a reasonable range for the size of a small executable or interpretable application program as understood by a skilled artisan in 1997 based on examples provided in the patent specification”, as it would have needed to do in order to overcome ESET’s indefiniteness argument. “It may be convenient to support Finjan’s infringement contentions against ESET’s accused devices, but Finjan’s new explanation does [not] provide clear notice of what constitutes a ‘small executable or interpretable application program’”, held Judge Bencivengo. While Finjan suggested that Cole would replace his completed testimony at a subsequent trial, Judge Bencivengo countered that he would not get a second bite at the apple, ruling that “a subsequent trial is not an opportunity for Dr. Cole to change his opinions or supplement them with support he did not provide on the record at the first trial”.

That same day, the court set a status conference for the following week, advising the parties that they “shall be prepared to discuss a path forward for this case and whether they prefer to stay the case while Finjan appeals the Courts invalidity order”. No such appeal has yet been docketed as of the publication date of this article.

As noted above, this ruling is not the first time that Finjan’s litigation has hit a speedbump this year. On January 9, Judge Alsup ruled that much of the NPE’s case against Juniper had been “exceptional” under Octane, due in part to Finjan’s attempt to switch out its infringement theory on the eve of trial—a misstep that led Judge Alsup to throw out its entire damages case. That decision has set the stage for an award of attorney fees against Finjan for its litigation conduct, which Judge Alsup repeatedly decried as having “wasted a great deal of everyone’s time and energy”. A special master has since been appointed to recommend the appropriate fee award in a report due May 20, with objections due on June 10.

Further details on Judge Alsup’s attorney fee decision in that case can be found here: “Judge Alsup Tees Up Fee Award Against Finjan, Calling Case Against Juniper a ‘Fiasco’” (January 2021).

Judge Alsup also recently dealt Finjan another blow in that case with respect to confidentiality, following the NPE’s attempt to “seal references to its patent valuation and licensing activity” that he had included in a December 2018 Daubert order—an attempt that Judge Alsup rebuffed, and that the Federal Circuit also rejected. On February 10, Judge Alsup once again denied Finjan’s request to withhold that information, holding that the NPE had “offer[ed] no compelling interest that outweighs the public’s own compelling interest in disclosure” (emphasis in original)—citing his own prior ruling against another Fortress NPE, Uniloc 2017 LLC, on a similar sealing dispute.

For more on Judge Alsup’s ruling against Uniloc 2017, and for details on a related battle over its standing to sue in litigation against Apple and other defendants, see “Uniloc Ordered to Unseal Licensing Info as Ruling on Standing Triggers New Dismissals” (December 2020).