Finjan, Inc. v. Blue Coat Systems, Inc.
879 F.3d 1299
| Fed. Cir. | 2018Background
- Finjan sued Blue Coat alleging infringement of four malware-detection patents (’844, ’731, ’968, ’633); a jury awarded ~$39.5M ($24M ’844; $6M ’731; $7.75M ’968; $1,666,700 ’633).
- District court held the ’844 patent §101-eligible after a bench trial and denied Blue Coat’s post-trial JMOL/new-trial motions; Blue Coat appealed on §101, infringement, and damages issues.
- The ’844 claims cover scanning a downloadable with a behavior-based analysis, generating a granular “security profile” identifying suspicious code, and linking that profile to the downloadable.
- The ’731 claims recite gateway scanning that creates security profiles listing computer commands performed by a file and comparing them to user policies; the ’968 claim requires a policy index storing allowability of cached content relative to multiple policies.
- At trial Finjan presented evidence that Blue Coat’s WebPulse/DRTR and Proxy SG products produced security-profile-like data and cached evaluations; parties disputed whether those implementations met the claims and whether damages were properly apportioned and supported.
Issues
| Issue | Plaintiff's Argument (Finjan) | Defendant's Argument (Blue Coat) | Held |
|---|---|---|---|
| §101 eligibility of the ’844 patent | Claim is a specific software improvement: behavior-based scanning + attaching a detailed security profile; improves computer functionality | Claims are abstract or claim a result without sufficient implementation details | Court: ’844 is patent-eligible at Alice step one — claims directed to a non-abstract improvement in computer functionality |
| Infringement of the ’844 patent | WebPulse/DRTR links security profiles to downloadables before end-users access them, satisfying the "before web server makes available to web clients" limitation | WebPulse only analyzes files already publicly available on the Internet, so it does not link before publication | Court: Substantial evidence supports jury verdict of infringement of ’844 (jury instruction/claim construction controlled) |
| Infringement of the ’731 patent | Proxy SG creates Cookie2 files with fields (integers) identifying occurrences of commands, satisfying the claim’s "list of computer commands" | Cookie2 merely flags command types rather than listing commands as required | Court: Substantial evidence supports jury verdict of infringement of ’731 (Cookie2 fields can satisfy "list of commands") |
| Infringement of the ’968 patent (policy index) | The accused Proxy SG stores evaluations tying cached content to policies (thus implementing a policy index) | Proxy SG stores evaluations of individual rule conditions but not final allowability determinations per policy, so it does not implement the claimed policy index | Court: JMOL granted for Blue Coat — Finjan failed to prove Proxy SG stores final allowability determinations for a plurality of policies (no substantial evidence) |
| Damages for the ’844 patent (apportionment & rate) | Used DRTR-derived user base (4% of traffic × users) and an $8-per-user royalty to compute lump-sum damages | Apportionment and the $8/user rate are unsupported; DRTR contains non-infringing features; $8 figure untethered to comparable licenses | Court: Vacated damages for ’844 — Finjan failed to apportion to infringing functionality and $8/user rate lacked substantial evidentiary support; remanded for damages proceedings or new trial |
| Damages for the ’731 and ’633 patents | Finjan apportioned revenues by dividing system functions (from Blue Coat’s diagram) and applied rates accordingly | Blue Coat challenged equal-value assumptions for diagram boxes | Court: Affirmed damages for ’731 and ’633 — jury award supported by expert apportionment and substantial evidence |
Key Cases Cited
- Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) (framework for §101, two-step Alice/Mayo test)
- Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) (§101 — inventive concept inquiry)
- Diamond v. Diehr, 450 U.S. 175 (1981) (patent eligibility principles re: claiming an application vs. a result)
- Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013) (§101 exclusions discussion)
- Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) (software claims directed to improved computer functionality can be §101-eligible)
- McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299 (Fed. Cir. 2016) (deference/standard for §101 review)
- Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016) (virus screening and intermediary scanning may be abstract when conventional)
- Affinity Labs of Tex. LLC v. DIRECTV, LLC, 838 F.3d 1253 (Fed. Cir. 2016) (claims invalid where there is no implementation detail)
- Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229 (Fed. Cir. 2016) (claims invalid for claiming a result without particular software implementation)
- Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed. Cir. 2015) (patent ineligibility where mechanism not described)
- Ericsson, Inc. v. D–Link Sys., Inc., 773 F.3d 1201 (Fed. Cir. 2014) (reasonable royalty must reflect value of infringing feature)
- VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308 (Fed. Cir. 2014) (apportionment still required when smallest technical component contains unpatented features)
- LaserDynamics, Inc. v. Quanta Comput., Inc., 694 F.3d 51 (Fed. Cir. 2012) (comparability of licenses required for reasonable royalty evidence)
- Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) (need factual basis linking prior licenses to hypothetical negotiation)
- Garretson v. Clark, 111 U.S. 120 (1884) (patentee’s burden to apportion damages between patented and unpatented features)