Finjan Drops IP Retrial Against Symantec Unit, Signals Deal
Share us on: By Bonnie Eslinger
Law360, San Jose (February 13, 2018, 8:48 PM EST) -- Finjan Inc. announced Monday it had vacated a California federal patent infringement retrial set to start that day against a Symantec Corp. unit, saying it reached confidential settlement terms with its cybersecurity rival and expects by the month’s end to finalize a “definitive agreement.”
Finjan filed a complaint in 2015 against Blue Coat Systems, which was later acquired by Symantec, alleging the company didn't get a license before using intellectual property protected by its six patents covering appliances and software for protecting computers from hostile files downloaded from the internet.
If the trial had gone forward, it would have been the third time the case had been introduced to a jury, as Finjan's claims against Blue Coat already went to trial in 2017.
In November, a prior jury found that Blue Coat infringed two of Finjan’s patents and awarded $490,000, but found no infringement on two others and was hung on two more.
The latter two patents were brought back to trial last month. However, two days after opening statements, the judge overseeing the case called a mistrial on Jan. 10 as a result of a Federal Circuit decision issued that morning that struck damages in a related case.
U.S. District Judge Beth Labson Freeman told the parties the appellate court’s opinion in the other case affected many of the issues already discussed in the trial that was before the court, in particular the monetary damages Finjan claimed were due for the infringement of its patents.
The court called for a retrial on the two remaining patents at stake in the case, U.S. Patent Nos. 8,677,494 and 6,154,844, and the trial was slated to start Monday.
The ‘844 patent was also at issue in a prior patent infringement case Finjan won against Blue Coat that went to trial in 2015 and resulted in a $39.5 million damages award.
Blue Coat appealed that verdict and the Federal Circuit found in its Jan. 10 opinion that substantial evidence supported the jury’s finding of infringement of the ’844 patent and another patent, U.S. Patent No. 7,418,731.
But the federal appeals court disagreed with the directions Finjan presented to the jury on how a reasonable royalty for the ‘844 patent should be assessed, finding the company failed to propose damages based only on the function of Blue Coat’s product that used its patented invention. The 2015 jury had awarded $24 million for infringement of that patent alone.
The Federal Circuit also took issue with an $8-per-user royalty rate Finjan asserted was proper for use of the ‘844 patent, which Blue Coat argued had no basis.
In its ruling, the federal appellate court also reversed the jury’s 2015 finding of infringement for another of Finjan’s asserted patents, U.S. Patent No. 6,965,968, for which the jury had awarded $7.75 million in damages.
In the instant case, Finjan argued that despite the 2015 jury verdict finding that Blue Coat infringed its patents, Blue Coat developed a new line of products that also incorporated Finjan’s security technology.
The court had also scheduled a second retrial in December to cover the damages concern for the ‘844 patent from the 2015 trial, remanded by the Federal Circuit, along with any damages if infringement was found in the case currently before the court.
The statement by Finjan on Monday does not say if the settlement covers the damages for the previous trial. A representative for the company told Law360 she couldn’t address that question at this point.
Symantec representatives could not immediately be reached Tuesday to comment on the deal announced by Finjan.
The patents-in-suit in the first Finjan v. Blue Coat case that went to the Federal Circuit are U.S. Patent Nos. 6,154,844; 6,804,780; 6,965,968; 7,058,822; 7,418,731; and 7,647,633.
The patents-in-suit in the instant action are U.S. Patent Nos. 8,225,408; 8,677,494; 9,189,621; 6,154,844; 6,965,968; and 7,418,731.
Finjan is represented by Paul J. Andre, Lisa Kobialka, James Hannah and Hannah Lee of Kramer Levin Naftalis & Frankel LLP.
Blue Coat is represented by Stefani E. Shanberg, Nathan B. Sabri, Robin L. Brewer, Eugene Marder, Madeleine E. Greene, Michael J. Guo and Alex N. Hadduck of Morrison & Foerster LLP, and Mark A. Lemley, Daralyn J. Durie and Stephen J. Elkind of Durie Tangri LLP.
The instant action and the related case, respectively, are Finjan Inc. v. Blue Coat Systems Inc., case numbers 5:15-cv-03295 and 5:13-cv-03999, both in the U.S. District Court for the Northern District of California.
The appellate case is Finjan Inc. v. Blue Coat Systems Inc., case number 16-2520, in the U.S. Court of Appeals for the Federal Circuit.
--Additional reporting by Dorothy Atkins, Ryan Davis and Y. Peter Kang. Editing by Breda Lund.
