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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`FINJAN, INC.,
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`v.
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`Plaintiff,
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` Case No.: 17-cv-00183-CAB-BGS
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`ORDER ON MOTION TO SAY
`[Doc. No. 224]
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`ESET, LLC and ESET SPOL. S.R.O.,
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`Defendants.
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`The motion before the Court is a motion to stay litigation while the patents at issue
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`are subject to review under the Inter Partes Review (IPR) procedures of the U.S. Patent
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`Office. The Court finds the motion suitable for determination on the papers submitted and
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`without oral argument in accordance with Civil Local Rule 7.1(d)(1). For the reasons set
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`forth below, the motion is denied in part and granted in part.
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`I.
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`Background
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`Plaintiff Finjan, Inc. (“Finjan”), filed the initial complaint in this matter on July 1,
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`2016 [Doc No. 1] against Defendants ESET, LLC and Eset Spol. S.R.O., (collectively
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`“Defendants” or “Eset”) alleging infringement of United States Patent Nos. 6,154,844 (the
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`“’844 Patent”); 6,804,780 (the “’780 Patent”); 7,975,305 (the “’305 Patent”); 8,079,086
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`(the “’086 Patent”); 9,189,621 (the “’621 Patent”); and 9,219,755 (the “’755 Patent”). In
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`Case 3:17-cv-00183-CAB-BGS Document 251 Filed 05/07/18 PageID.10812 Page 2 of 4
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`April 2017, Eset filed its answers, asserting twelve affirmative defenses and sixteen
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`counterclaims. [Doc. Nos. 118, 119.]
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`The litigation has proceeded through the regular rounds of motion practice, including
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`motions to dismiss, motions to transfer and an earlier motion to stay. On September 25-
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`26, 2017 a claim construction hearing was held and a Preliminary Claim Construction
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`Order issued. [Doc. Nos. 172, 174, 178-1.] The Court requested and received
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`supplemental briefing on certain constructions. [Doc. Nos. 178-1, 181, 182, 183, 186, 187,
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`190, 191.] On November 14, 2017, a Claim Construction Order issued. [Doc. No. 195.]
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`Additionally, Finjan filed a Motion for Reconsideration of the Claim Construction
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`Order. [Doc. No. 188.] Defendants filed a response in opposition [Doc. No. 194.] and
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`Plaintiff filed its reply. [Doc. No. 196.] Finjan sought reconsideration on the grounds that
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`the Court had not given appropriate deference to six decisions from three other district
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`court judges regarding the term “before a web server makes the Downloadable available to
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`web clients” in claims 1 and 15 of the ’844 patent. [Doc. No. 188-1.] The motion was
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`denied at the February 26, 2018 case management conference. [Doc. No. 225.]
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`On February 20, 2018, Defendants filed the motion to stay the litigation pending
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`final resolution of ESET’s IPR petition on the sole unexpired patent in suit, the ’305 Patent.
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`[Doc. No. 224.] Finjan opposed the motion. [Doc. No. 232.] Defendants filed a reply.
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`[Doc. No. 238.] In addition, Finjan filed a Notice of Supplemental Authority Regarding
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`Pending Motion to Stay. [Doc. No. 240.]
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`II. Legal Standard
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`Courts have inherent power to manage their dockets and stay proceedings. Factors
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`to be considered are: (1) whether a stay will simplify the issues in question and trial of the
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`case; (2) whether discovery is complete and whether a trial date has been set; and (3)
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`whether a stay would unduly prejudice or present a clear tactical disadvantage to the
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`nonmoving. TAS Energy, Inc. v. San Diego Gas & Elec. Co., 2014 WL 794215, at *3 (S.D.
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`Cal. Feb. 26, 2014), citing Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107, 1111
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`(N.D. Cal. 2006).
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`Case 3:17-cv-00183-CAB-BGS Document 251 Filed 05/07/18 PageID.10813 Page 3 of 4
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`III. Discussion
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`With regard to timing, the pleadings are finalized. Discovery is ongoing, with
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`completion of document discovery anticipated on June 22, 2018, fact discovery closing on
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`August 3, 2018 and expert discovery ending on September 28, 2018. [Doc. No. 214.]
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`There has been a hearing on claim construction, [Doc. Nos. 172, 174], the issuance of a
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`claim construction order [Doc. No. 195], and a trial date of February 4, 2019, has been set.
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`[Doc. No. 214.]
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`Whether the stay would simplify the issues for trial is disputed. Defendants contend
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`that following the IPR on all claims of the ’305 patent, the Patent Trial and Appeal Board
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`(“PTAB”) will “invalidate those claims, thus significantly streamlining this litigation” and,
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`as a result, the damages discovery and analysis will also be simplified. [Doc. No. 224-1 at
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`10.] Relatedly, Eset asserts that should the ’305 claims survive IPR, the Board’s decision
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`would engender a narrowing of the prior art available for invalidity defenses. [Id.] Finjan
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`counters that the ’305 patent will likely be confirmed at the conclusion of the IPR
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`proceeding. [Doc. No. 232. at 14-15.] The fact that the ’305 patent is currently in IPR
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`weighs in favor of staying litigation of this specific patent.
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`Further, Defendants assert a stay of the entire case is warranted because of: (1) the
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`September 22, 2017, petition for IPR filed by Cisco Systems Inc., challengingly the validity
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`of claims 1, 4, 5, 7, 8, 11, 15, 16, 21, and 43 of the ’844 patent; (2) the ongoing IPR initiated
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`by Blue Coat Systems LLC, on March 1, 2017, challenging the validity of claims 1, and 6
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`– 10 of the ’621 patent and; (3) the ongoing IPR initiated by Blue Coat Systems LLC, on
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`July 15, 2016, challenging the validity of the claims 1, 5, 10, 13, and 15 of the ’621 patent.
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`Defendants posit that these third party actions provide additional grounds for staying the
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`entire action because these decisions could affect the claims in this litigation. [Doc. No.
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`224-1 at 10-12.] Yet interestingly, while Defendants point to these instituted IPRs as
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`grounds for a stay they have categorically stated on the record that they will not be bound
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`by any determinations that they consider adverse to their position. The Court is not
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`persuaded that these third party actions provide grounds for issuance of a stay. Further, as
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`Case 3:17-cv-00183-CAB-BGS Document 251 Filed 05/07/18 PageID.10814 Page 4 of 4
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`Finjan have demonstrated, the ’086 patent IPR has been terminated, the ’621 patent IPR
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`will be terminated shortly, and the PTAB denied Cisco Systems’ petition to institute IPO
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`on the ’844 patent on April 3, 2018. [Doc. Nos. 232 at 9-11; 240.] Therefore, “as it stands,
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`there is only one instituted IPR for only one of the six Asserted Patents.” [Doc. No. 232 at
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`8.]
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`Finally, although the parties dispute whether Finjan will suffer undue prejudice or a
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`clear tactical disadvantage beyond the delay inherent in the stay, the Court concludes that
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`it would. Finjan’s efforts to develop and bring new products and services to market as well
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`as license the patents-in-suit will be negatively impacted by a stay.
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`At this time, the Court does not consider holding up litigation on five other patents
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`while it awaits a determination from PTAB on the only other remaining patent at issue in
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`the case to be a judicious use of its or the parties’ time and resources. The Court considers
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`the most efficient route for this litigation is for it to proceed on all but the ‘305 patent. As
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`to the ’305 patent, any other pending and further proceeding related to the ’305 patent are
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`STAYED until the issuance of the Board’s decision. Consequently, Defendants’ motion
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`to stay is denied in part and granted in part. [Doc. No. 224.]
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`IT IS SO ORDERED.
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`Dated: May 7, 2018
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`17-cv-00183-CAB-BGS
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