PTAB Says It Can't 'De-Institute' Review Post-SAS
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Law360 (August 13, 2018, 6:14 PM EDT) -- The Patent Trial and Appeal Board has denied Finjan Inc.’s bid to “de-institute” inter partes review on its computer security systems patent, after the board chose to review all challenged arguments following the U.S. Supreme Court's recent SAS Institute decision.
The PTAB had previously agreed to review all challenged claims — but not all arguments for unpatentability — raised by ESET LLC in its July 2017 petition for inter partes review of Finjan’s patent. But soon after the high court’s decision in SAS Institute Inc. v. Iancu in April that the PTAB must decide the validity of every challenged claim in AIA reviews, ending its practice of choosing to review only some claims, the board modified its decision to include all of ESET’s arguments.
And despite Finjan’s June request for a rehearing of the board’s decision, arguing the entire case should be tossed and it was being forced to defend against “harassing challenges,” the PTAB on Friday stood its ground.
“[T]he panel ‘is not aware of a single case where a partially-instituted IPR was de-instituted post-SAS, as requested by patent owner,’” the board wrote, adding that it was “sympathetic” to Finjan’s concerns. “If now faced with the petition in the first instance, and understanding that we have only a ‘binary choice,’ it may well be appropriate to deny the petition in its entirety.”
The patent at issue, U.S. Patent No. 7,975,305 B2, covers an antivirus security system that scans and analyzes content within a computer, according to filings.
Finjan in July 2016 had accused ESET of infringing several security systems patents, requesting “no less than $40 million” in damages at trial. ESET had subsequently requested of the ‘305 patent in July 2017, alleging that it was anticipated and obvious in light of prior art known as Chandnani, and obvious over a combination of Chandnani and another reference known as Freund.
In January, the PTAB had instituted review of all claims of the ‘305 patent on the former ground raised by ESET, while denying review on the latter. In doing so, the board had found that a patent examiner had already considered Freund “extensively” during prosecution, such that it was be unproductive to consider the arguments again.
However, after the high court’s SAS ruling, the PTAB changed its decision to include the previously denied Freund grounds. Finjan then asked for a rehearing, contending that contrary to the U.S. Patent and Trademark Office’s guidance on how the SAS ruling should be applied, the decision did not require the PTAB to review all arguments raised in ESET’s petition for inter partes review.
But the board disagreed, saying that it had been instructed to consider the agency’s guidance “with the weight of office policy,” and that it was precluded from terminating the partially instituted review of the ‘305 patent, as Finjan had asked for.
“[A]bsent agreement by the parties to narrow the issues, binding legal authority precludes us from proceeding on the Chandnani grounds separate from the Freund-based grounds,” the board said.
Counsel for both parties did not immediately respond to requests for comment Monday.
The patent-in-suit is U.S. Patent No. 7,975,305 B2.
Finjan is represented by James Hannah and Jeffrey H. Price of Kramer Levin Naftalis & Frankel LLP.
ESET is represented by Nicole A. Pisano, Christopher C. Bolten and Scott Penner of Foley & Lardner LLP.
The case is ESET LLC et al. v. Finjan Inc., case number IPR2017-01738, before the Patent Trial and Appeal Board.
--Additional reporting by Ryan Davis. Editing by Breda Lund.
