Finjan, Inc. v. Blue Coat Systems, Inc., Case No. 13-cv-03999 (11.20.15 Judge Beth Freeman)

It looks like the battle between non-practicing entity Finjan and defendant Blue Coat Systems is coming to an end, at least in the Northern District. Since the last time we posted about this case (here and here), the jury has found Blue Coast Systems infringed five of the asserted patents and awarded nearly $40M in damages. The Court was then asked to decide some non-jury legal issues, including priority dates of some of the asserted patents, whether prosecution history estoppel barred doctrine of equivalents, patent eligibility under 35 U.S.C. § 101, and laches. The Court concluded that Finjan’s infringement theories were not barred by prosecution history estoppel and that the challenged patent is not an abstract idea. So the patents remain valid and the jury verdict of infringement appears to remain intact.

Given all the recent attention paid to software patents post-Alice, the Court’s conclusion with respect to Section 101 was particularly interesting. The ’844 Patent claims a system and methods of “network protection wherein an inspector reviews a piece of downloadable-information for suspicious code or behavior.” The inspector “generates a profile characterizing the areas of suspicion and then attaches that profile to the downloadable-information.” While conceding that the specification indicates that the invention claimed in the ’844 Patent was specifically directed to recognizing computer viruses in downloadable information, Blue Coast Systems nonetheless argued that claim 1 of the ’844 Patent is directed to an abstract idea of “receiving” information, “generating” information (the profile), and then “linking” the downloadable and generated information. Finjan disagreed, stating that its claimed invention is not abstract because it is “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer,” i.e., inventing a technique for protecting computer networks. Finjan relied heavily on the considerations set forth in the published “2014 Interim Guidance on Patent Subject Matter Eligibility” from the Patent Office” as support for its positions. Judge Freeman ultimately agreed with Finjan, finding the Patent Office’s guidance to be persuasive (even though the Court admitted it is not binding).

Specifically, Finjan cited to a hypothetical claim from the Patent Office’s guidance which is similar to Finjan’s patent claim and in which the Patent Office concluded that such a claim is not an abstract idea. The Patent Office analyzed a hypothetical claim covering “Isolating and Removing Malicious Code from Electronic Messages” and concluded that such a claim is not directed to an abstract idea because it relates to software technology for isolation and extraction of malicious code contained in an electronic communication.   Likewise, Judge Freeman concluded, claim 1 of the ’844 Patent is directed towards performing steps leading to identifying malicious code to create a new data file containing a security profile. This claim is “rooted in computer technology as its covers the identification of suspicious code which do not have significance outside the realm of computer technology.” Accordingly, the Court held that the ’844 Patent is not directed to an abstract idea.

This goes to show that despite the significant shift that has occurred since the Alice decision, all hope is not lost for plaintiffs asserting patents in the software space. There is a growing body of authority that a patent plaintiff can draw upon when arguing patent eligibility under section 101, including the Patent Office’s own guidance. Even though these published guidelines are not binding, on the Courts, they offer persuasive evidence of where the boundaries between patent eligible and patent ineligible subject matter lie – enough guidance, at least, for the Northern District of California to deem the analysis outcome determinative.