Finjan loses part $40M in Reasonable Royalty Award in Blue Coat case at the Federal Circuit

Finjan v. Blue Coat at the Federal CircuitOn Wednesday, January 10th, the Court of Appeals for the Federal Circuit entered a decision in Finjan v. Blue Coat Systems which affirmed the lower court’s findings of Blue Coat’s infringement of three patents owned by cybersecurity firm Finjan. The Federal Circuit did vacate part of the district court’s damages award after siding with Blue Coat’s appeal of non-infringement of one of the four Finjan patents asserted at the district court.

Blue Coat’s appeal to the Federal Circuit follows a jury verdict entered August 2015 in the Northern District of California, which found that Blue Coat’s web security products, including WebPulse and ProxySG, infringed on the Finjan patents asserted in the case. The total reasonable royalty damages award entered in the district court was nearly $40 million, including $24 million for the infringement of U.S. Patent No. 6154844, titled System and Method for Attaching a Downloadable Security Profile to a Downloadable. The asserted Finjan patents also had the validity of all of its asserted claims upheld after Blue Coat failed to convince the jury that the claims were anticipated by prior art.

The Federal Circuit’s decision found no error with the district court’s determination of the validity of the ‘844 patent, including the lower court’s conclusion that the patent was valid under 35 U.S.C. § 101, the basic statute governing patentability. However, the Federal Circuit found that Blue Coat was entitled to a judgment on the merits (JMOL) ruling on non-infringement of U.S. Patent No. 6965968, entitled Policy-Based Caching. The appellate court decided that Finjan had not presented substantial evidence that Blue Coat’s ProxySG product actually stored in a policy index any determinations that access to digital content was allowable in light of a given security policy. This finding by the Federal Circuit reverses $7.8 million in damages related to infringement of the ‘968 patent which were awarded in district court. The Federal Circuit also agreed with Blue Coat that Finjan failed to apportion damages awarded for the ‘844 patent to the infringing functionality, cutting into the largest portion of Finjan’s damages award.

In a press release issued following the Federal Circuit’s decision, Finjan expressed a good deal of positivity regarding the outcome of the appeal. The company explained it was pleased with the Federal Circuit’s decision affirming validity of our asserted patents, and, notably, its recognition that the ‘844 behavior-based invention ‘was pioneered by Finjan,’” said Julie Mar-Spinola, chief IP officer (CIPO) of Finjan Holdings in the release. “Significantly, this Opinion should end any further challenges to the validity of the ‘844 Patent.”

The Federal Circuit’s decision also triggered the declaration of a mistrial in a different Northern California proceeding between the parties. In that trial, Finjan will be getting a new trial date on additional liability issues regarding two of its patents, including the ‘844 patent and another patent not at issue in the case Blue Coat appealed. A new jury trial for damages and willful infringement charges related to the original ‘844 infringement is scheduled for December of this year.


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