Federal Circuit: Courts Cannot Change a Patent’s Scope Based on References to Family Members

November 4, 2022

The Federal Circuit has overturned a Southern District of California ruling that invalidated five Finjan, Inc. patents asserted against ESET as indefinite. In a November 1 precedential decision, the appellate court held that District Judge Cathy Ann Bencivengo erred in construing a common claim term to include a limitation present only in certain family members that had been incorporated by reference into the challenged patents. The Federal Circuit explained that while a patent incorporated by reference can provide context when construing shared language, it cannot be used to change the scope of the claimed invention in the “host” patent.

Finjan, which via parent Finjan Holdings, Inc. was acquired by Fortress Investment Group LLC in July 2020, sued ESET in the Northern District of California in July 2016 (3:16-cv-03731); the following January, the court granted the defendant’s motion to transfer the case on convenience grounds to the state’s Southern District (3:17-cv-00183). The complaint accused 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.

The Prior Back-and-Forth Over Claim Construction

Five of those six patents (all but the ‘305 patent) include the contested term “Downloadables”, which has been defined at varying levels of specificity by various courts. In the ESET case, a key part of the debate over that term’s proper construction was whether to incorporate narrowing language from certain related patents—specifically, the requirement that an “executable application program” comprising a portion of such a “Downloadable” be “small”, as required by the nonasserted 6,167,520 and 6,480,962 patents. The ‘844 and ‘780 patents do not include the term “small” in their definition of “Downloadable”, but both incorporate the ‘520 patent by reference. Three other asserted patents (‘086, ‘621, and ‘755) do not provide their own definitions of “Downloadable” but incorporate by reference the ‘962 patent (which does include the “small” limitation) and the ‘780 patent (which does not). Judge Bencivengo’s November 2017 construction of that term 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), arguing that the “somewhat differing definitions” found across the relevant patents “can be reconciled”.

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 the relevant date would not have known “what would constitute ‘small’” in this context, arguing that Finjan expert Eric Cole had failed to provide objective boundaries for the upper limit of “small” with support in the intrinsic record. 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 revisited the definition of “small” when the case went to trial in March 2020, during which Cole testified for Finjan that “small” should be defined based on the “function” of a “Downloadable” rather than its size—specifically, describing a “small executable [as] an application that does not require installation[,] is ‘self-contained’[,] and is ‘just running automatically’”. On the trial’s fourth day, however, Judge Bencivengo declared a mistrial in light of the COVID-19 pandemic with the agreement of counsel—though, crucially, after Cole finished his testimony.

ESET then successfully sought leave to renew its motion for summary judgment of indefiniteness based on Cole’s proposed construction. In that motion, filed in August 2020, the defendant asserted that Cole’s testimony failed to fix any of the defects it had identified—leaving “Downloadables . . . hopelessly indefinite”. The company argued 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, who further barred Cole from getting a “second bite at the apple” by replacing his testimony at a second trial. (An amended order issued about one week later fixed an apparent typographical error, as the original holding stated that “Finjan’s new explanation does provide clear notice” (emphasis added).) Judge Bencivengo then declined to revisit that holding in May 2021, and Finjan appealed the following month—challenging both the court’s claim construction and the resulting invalidity ruling (2021-2093).

The Federal Circuit’s Decision on Appeal

Ruling on appeal on November 1, the Federal Circuit agreed with Finjan that Judge Bencivengo had erred in her construction of the term “Downloadables” by incorporating the term “small”. The issue stemmed from the principle that when a first patent is incorporated by reference into a second patent, or “host” patent, the invention claimed in the first patent does not become part of or otherwise change the invention claimed in the second. Rather, the court explained, the first patent’s disclosures serve to inform the construction of claim terms that are also found in the host patent. However, it is “erroneous to assume that the scope of the invention is the same such that disclaimers of scope necessarily apply across patents” (citing Circuit Judge Jimmie V. Reyna’s concurrence in X2Y Attenuators v. ITC).

In this context, the Federal Circuit held that Judge Bencivengo had erred by treating the differing definitions across the asserted patent family as competing, and in turn, by applying the “most restricted definition of the term” to the patents-in-suit. Those definitions are not competing, held the Federal Circuit, but instead reflect the removal of restrictive language in the later-issuing patents—language that cannot be reinserted by virtue of the earlier patent’s incorporation by reference: “The use of a restrictive term in an earlier application does not reinstate that term in a later patent that purposely deletes the term, even if the earlier patent is incorporated by reference”. As a result, definitions that both do and do not include the “small” limitation “can exist in harmony within the patent family” without applying the narrower construction across the board.

The Federal Circuit then illustrated this distinction by comparing the key limitations of the ‘520 patent—which, again, contains the term “small”—to those in suit, which do not. Per the court, the ‘520 patent “represents a subset of the patent family claiming an invention capable of downloading only small executable or interpretable application programs” because the patent’s disclosure “focuses on applets as small executable or interpretable application programs” (emphasis added), and because various claim limitations apply specifically to “applets”. On the other hand, the court noted that the ‘844 and ‘780 patents define “Downloadable” as “an executable application program, which is downloaded from a source computer and run on the destination computer”. The court found that “[t]his definition is not limited to ‘small’ executable application programs” because the patents disclose examples that include Java applets, ActiveX controls, JavaScript scripts, and VisualBasic scripts, thereby “expanding upon” the applets contemplated in the ‘520 patent. For this reason, the Federal Circuit held that “‘Downloadable’ should not be construed to include the term ‘small’” as used in the ‘844 and ‘780 patents.

The Federal Circuit also found that this same reasoning extends to the remaining patents-in-suit (‘086, ‘621, and ‘755), which as noted above lack their own definition for “Downloadable” but incorporate one patent that includes the ‘520 patent’s “small limitation” (‘962) and one that does not (‘780). Similar to its holding for the ‘844 and ‘780 patents, the court concluded that the term “Downloadable” as used in the ‘086, ‘621, and ‘755 patents “should not be restricted to ‘small’ executable application programs” because they incorporate examples of “Downloadables” that expand beyond applets—including the ones listed for the other two patents plus “Trojan horses” and “multiple compressed programs such as zip or meta files”.

The Federal Circuit then concluded by construing the term “Downloadable” to mean “an executable or interpretable application program, which is downloaded from a source computer and run on the destination computer”, as used in the ‘844, ‘780, ‘086, ‘621, and ‘755 patents, reversing Judge Bencivengo’s narrower construction. As a result, the court overturned her order granting summary judgment due to indefiniteness and remanded for further proceedings.

The impact of the Federal Circuit’s ruling could soon spill over into another Finjan case. In July 2021, the NPE and defendant Rapid7 (1:18-cv-01519) jointly agreed to stay that lawsuit pending the outcome of the ESET appeal, since the seven patents at issue include both the ‘086 patent addressed in that appeal and another Finjan patent (8,677,494) that the defendant argues is also invalid for the same reason. The parties are due to file a status update within ten days of the completion of any appellate review, meaning that the Rapid7 case could soon resume unless ESET opts to pursue a Supreme Court appeal. Also affected by the ESET litigation, albeit prior to the appeal, was Finjan’s suit against Cisco (5:17-cv-00072), as noted in RPX’s prior coverage: In May 2021, shortly after Judge Bencivengo declined to revisit her indefiniteness order for ESET, Finjan and Cisco agreed that claims as to three of the patents that had been invalidated in the ESET case should be severed and stayed pending the outcome of that appeal—leaving just two weeks before a trial scheduled for the following month over the two remaining patents. The court never entered an order addressing the parties’ stipulation, as they would jointly move to dismiss the case shortly thereafter in light of a disclosed settlement.

For more on the ESET litigation, see “Five Finjan Patents Invalidated as Indefinite Despite ‘Convenient’ Testimony from Plaintiff’s Expert” (March 2021). Further background on another Finjan setback currently on appeal—an attorney fee ruling in its troubled case against Juniper Networks—can also be found here: “Judge Alsup Tees Up Fee Award Against Finjan, Calling Case Against Juniper a ‘Fiasco’” (January 2021).