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`NICOLA A. PISANO, CA Bar No. 151282
` NicolaPisano@eversheds-sutherland.com
`JOSE L. PATIÑO, CA Bar No. 149568
`
`JosePatino@eversheds-sutherland.com
`JUSTIN E. GRAY, CA Bar No. 282452
`
`JustinGray@eversheds-sutherland.com
`SCOTT A. PENNER, CA Bar No. 253716
` ScottPenner@eversheds-sutherland.com
`EVERSHEDS SUTHERLAND (US) LLP
`12255 EL CAMINO REAL, SUITE 100
`SAN DIEGO, CALIFORNIA 92130
`TELEPHONE:
`858.252.6502
`FACSIMILE:
`858.252.6503
`Attorneys for Defendants and Counter-Plaintiffs
`ESET, LLC and ESET, SPOL. S.R.O.
`
`FINJAN, INC.,
`
`Plaintiff,
`
`v.
`ESET, LLC, et al.,
`Defendants.
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
` Case No. 3:17-cv-0183-CAB-BGS
`ESET, LLC AND ESET, SPOL. S.R.O.’s
`STATUS UPDATE REGARDING THE
`’305 PATENT AND OTHER TRIAL
`ISSUES
`
`
`Judge: Hon. Cathy Ann Bencivengo
`
`
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`AND RELATED COUNTERCLAIMS.
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`Defendants ESET, LLC and ESET, spol. s.r.o. file this status update pursuant to
`this Court’s May 12, 2020 Order (D.I. 786).
`I.
`STATUS OF ’305 PATENT
`As a result of an ex parte reexamination, the Patent Office cancelled independent
`claims 1 and 13, along with dependent claims 2 and 5 of the ’305 patent. The Federal
`Circuit affirmed the cancellation of those claims. A second ex parte reexamination was
`filed by Sonicwall earlier this year that seeks cancellation of the remaining independent
`claim and several additional dependent claims, based on the same art used to cancel
`claims 1, 2, 5, and 13. The Sonicwall ex parte reexamination has already been instituted.
`A third ex parte reexamination was filed by ESET last month seeking cancellation of the
`remaining claims of the ’305 patent, again based on the same art. To date, two of the
`three independent claims of the ’305 patent already have been cancelled, the third
`independent claim—which is nearly identical to the other two—is the subject of an
`instituted ex parte reexamination. The remaining dependent claims also have been
`challenged by Sonicwall and ESET. In addition, ESET has until August 10, 2020 to seek
`a petition for a writ of certiorari on its IPR. Detailed information relating to the various
`post-grant proceedings is set forth below.
`To date, no discovery has been taken regarding the ’305 patent: no fact
`depositions regarding the alleged instrumentalities or potential prior art, no expert reports
`have been served regarding invalidity or infringement, and no expert depositions have
`been scheduled or taken. Prior art witnesses relevant to invalidity of the ’305 patent
`reside in Israel and England, while ESET’s witnesses relevant to the infringement
`allegations reside in Slovakia and Poland.
`ESET believes that a continued stay of the ’305 patent is warranted because: two
`of the independent claims have already been canceled by the Patent Office (and that
`decision affirmed on appeal by the Federal Circuit); the same prior art has been found
`sufficient to institute a new reexamination proceeding on the remaining independent
`claim; additional dependent claims are likely to be invalidated in connection with the
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`newly instituted reexamination proceeding; the remaining dependent claims are
`challenged in ESET’s pending ex parte reexamination request; taking international
`discovery on the ’305 patent issues would be costly and difficult in light of the ongoing
`global pandemic; and resolution of the existing patent claims may enable the parties to
`resolve the dispute on the ’305 patent without a further trial.
`A. ESET’s IPR and Appeal
`On July 1, 2016, Finjan filed suit against ESET alleging infringement of six U.S.
`patents. (D.I. 1.) On July 4, 2017, ESET filed an IPR seeking invalidation of all claims
`of the ’305 patent. (D.I. 224-4.) The Patent Trial and Appeal Board (“Board”) instituted
`ESET’s IPR on January 31, 2018. (D.I. 224-5.) On February 20, 2020, shortly after the
`Board instituted the IPR, ESET sought a stay of this case pending the outcome of the
`IPR. (D.I. 224-1.) The Court granted-in-part ESET’s request by severing the ’305 patent
`from the five remaining patents and staying all deadlines relating to the ’305 patent. (D.I.
`251.)
`
`On January 24, 2019, the Board issued a final written decision that the claims of
`the ’305 patent were not unpatentable over the prior art identified in ESET’s IPR. On
`April 1, 2019, ESET filed a notice of appeal with the Federal Circuit raising, inter alia,
`constitutional issues that affected the proceeding. On April 9, 2020, notwithstanding
`ESET’s arguments that it had been denied due process throughout the conduct of the IPR,
`the Federal Circuit sua sponte cancelled oral argument in light of the ongoing COVID-19
`public health emergency. On May 11, 2020 the Federal Circuit issued a Rule 36
`affirmance. On July 2, 2020, the mandate from the Federal Circuit issued. Given the
`Board’s arbitrary and capricious handling of the IPR, ESET continues to consider
`whether to petition the Supreme Court for a writ of certiorari. ESET has until August 10,
`2020 to file such a petition.
`B.
`Proofpoint Ex Parte Reexamination
`On December 11, 2015 Proofpoint filed a request for an ex parte reexamination of
`claims 1, 2, 5, and 13 the ’305 patent. (See Reexamination Request 90/013,660.) On
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`January 19, 2016, reexamination was ordered for all requested claims. On August 24,
`2016, the Examiner issued a final rejection of all challenged claims. On November 22,
`2016, Finjan filed a notice of appeal to the Board. Following briefing and oral argument,
`on July 2, 2018 the Board affirmed the unpatentability of the cancelled claims. On
`September 4, 2018, Finjan appealed the Board’s decision to the Federal Circuit. On
`October 28, 2019, the Federal Circuit affirmed the Board’s decision, affirming
`cancelation of all the challenged claims. On January 29, 2020, the Patent Office issued a
`Reexamination certificate, cancelling claims 1, 2, 5, and 13 of the ’305 patent. Thus, two
`of the three independent claims in the ’305 patent have been cancelled.
`C.
`Sonicwall’s Ex Parte Reexamination
`On March 19, 2020, following the issuance of the reexamination certificate issued
`as a result of the Proofpoint ex parte reexamination, Sonicwall filed a request for ex parte
`reexamination of dependent claims 6, 9, 11, 12, 17, and independent claim 25 of the ’305
`patent. (See Reexamination Request 90/014,447.) The Sonicwall petition relies on the
`same art as the Proofpoint ex parte reexamination. On May 7, 2020, the Patent Office
`ordered reexamination of all the claims of the ’305 patent that Sonicwall had requested.
`No further action has yet taken place in that proceeding. Claim 25, the only remaining
`independent claim, is nearly identical to previously cancelled independent claims 1 and
`13.
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`D. ESET’s Ex Parte Reexamination
`On June 19, 2020, ESET filed an ex parte reexamination of all remaining claims of
`the ’305 patent. (See Reexamination Request 90/014,535.) ESET’s petition relies on the
`same art as that cited in the Proofpoint and Sonicwall requests. On June 29, 2020, Finjan
`filed a petition with the Patent Office to terminate ESET’s ex parte reexamination as
`allegedly estopped under 35 U.S.C. § 315(e). On June 30, 2020, the Patent Office
`confirmed the ex parte reexamination was properly filed and assigned the case to the
`same examiner handling the Sonicwall ex parte reexamination. On July 13, 2020, ESET
`filed a response to Finjan’s petition explaining why the ex parte petition was not barred
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`by 35 U.S.C. § 315(e) and Finjan’s improper petition should be dismissed.1
`II. OTHER PRE-TRIAL RELATED MATTERS
`A. Renewal of ESET’s Request for Partial Summary Judgment Regarding
`the Priority Date of the ’844 Patent
`On April 23, 2019, ESET moved for partial summary judgment that the ’844 patent
`was not entitled to claim priority to the provisional application. (D.I. 483-1 at 3-7). On
`October 16, 2019, this Court ruled on the pending summary judgment motions and stated
`“The Court…was prepared to adopt the IPR decision that the inventors of the ‘844 patent
`were not in possession of the subject matter of the challenged claims of that patent any
`time prior to the December 22, 1997 filing date of the 08/995,648 application. [Doc. No.
`483-20, at 21-25; Doc. No. 697, at 51.] The parties represented that there had been
`further developments in the Patent Office regarding that determination. The matter
`therefore remains under submission pending updates from the parties.” (D.I. 699 at 4.)
`On April 7, 2020, the PTAB issued a final written decision regarding the validity
`of the ’844 patent. IPR2019-00026, Paper 46. While the Board determined that the
`claims were not unpatentable in view of the art presented in that IPR petition, the Board
`“concluded that the challenged claims were not entitled to a priority date any earlier than
`the December 22, 1997, filing date of the application for the ’844 patent, and accordingly,
`we also concluded that Abadi, which issued from an application filed December 1, 1997,
`is prior art.” Id. at 21.
`This Court stated that it was prepared to grant ESET’s motion regarding the
`priority date for the ’844 patent but put its decision on hold pending the Board’s
`determination in the IPR. The Board determined, as this Court was prepared to do and as
`ESET’s summary judgment motion explained, that the ’844 patent is not entitled to claim
`priority to the provisional application. ESET requests that the Court now grant its motion
`
`1 A copy of ESET’s filing is attached as Exhibit 1 to the Declaration of Scott A. Penner
`in Support of ESET, LLC and ESET, SPOL. S.R.O.’s Status Update Regarding the ’305
`Patent and Other Trial Issues, concurrently filed herewith.
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`and find that the ’844 patent is not entitled to a priority date any earlier than December
`22, 1997, the filing date of the application for the ’844 patent.
`B. Renewal of ESET’s Request for Summary Judgment Regarding
`Indefiniteness of the Term Downloadable
`On April 23, 2019, ESET moved for summary judgment that the patents-in-suit
`were invalid due to indefiniteness of the term “Downloadable.” (D.I. 478). On October
`16, 2019, this Court denied ESET’s motion “without prejudice to ESET demonstrating
`this invalidity defense at trial.”
`At trial, Dr. Cole testified that the term “small” meant “an executable that doesn't
`require installation when it runs on your system.” See, e.g., 2020-03-12 Trial Transcript
`(Day 3) at 396:2-5. Yet Dr. Cole admitted that his “definition” of the term would include
`files up to at least 2-terabytes in size. Id. at 464:17-22. Computers in 1996, when the
`patents were written, generally had a hard drive capacity of 2 gigabytes. Id. at 410:8-16.
`Therefore, according to Dr. Cole’s own testimony a “small” file would be one that was
`100x LARGER than the size of the entire hard drive on computers at the time of the
`alleged invention.
`Beyond the absurdity that the definition of “small” could be “larger than your hard
`drive” (in fact Dr. Cole’s definition means there is no actual size limit), the record
`demonstrates that Dr. Cole’s testimony is entirely divorced from the patent specifications,
`ignores the analysis that this Court performed when properly construing the term, and is
`at odds with the deposition testimony of Finjan’s other experts.
`Moreover, this Court’s definition of “small” comes directly from the ’962
`specification which states: “A Downloadable is a small executable or interpretable
`application program which is downloaded from a source computer and run on a
`destination computer.” Nothing in the specification suggests that whether something is
`“executable” depends upon whether or not it is installed. Dr. Cole reads into the term
`Downloadable a limitation (i.e. the requirement for installation) that has no support in the
`Court’s construction or the specification. And Dr. Cole’s “installed” definition differs
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`from his deposition testimony.
`At his deposition, Dr. Cole was asked if “Internet Explorer” could be considered a
`Downloadable. Rather than saying “no because Internet Explorer is installed,” Dr. Cole
`testified “if you were downloading a new version of it, I guess it could be...it would
`depend on the context.” 2019-03-19 Deposition of Cole at 166:7-14. And further, when
`asked “What context would I have to be looking at in order to know if it [the word small]
`can be used?” Dr. Cole pointedly did not testify that it had anything to do with whether
`the file was installed. Instead, he testified that the context was “Just on what you’re
`downloading, what is the size relative to other things that are being downloaded.” Id. at
`169:11-15.
`Dr. Cole’s new theory at trial that “small” means the file is “not installed” is
`devoid of support in the patents, contradicted by the claims of the patents, at odds with
`his previous testimony, and now produces the absurd result that files of nearly infinite
`size should be considered “small.” Dr. Cole’s deposition and trial testimony, in the
`aggregate, demonstrates precisely why the term Downloadable is indefinite as used in all
`asserted patents.
`ESET requests permission to file an amended motion for summary judgment in
`light of Dr. Cole’s trial testimony. A finding in ESET’s favor would be case dispositive
`and save the parties countless time and expense involved in a retrial.
`C.
`Prosecution History Estoppel Prevents Assertion of the ’844 Patent
`Against Gateway Devices in Light of Ji
`During the trial conducted in March, this Court acknowledged that ESET had
`raised a prosecution history estoppel claim with respect to the applicability of the ’844
`patent to gateway servers and told counsel “I’m going to decide the prosecution estoppel
`claim, which I have not reached yet.” (2020-03-12 Day 3 Transcript at 432:9-14.) As the
`Court acknowledged, resolution of this issue is one for the Court. If, as the record shows,
`Finjan is estopped from asserting the ’844 patent against ESET’s gateway servers, then
`the case will be significantly reduced in scope. ESET suggests that the parties be allowed
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`to brief the issue for the Court’s consideration and resolution prior to any rescheduled
`trial.
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`D.
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`Prioritization of Bench Trial Regarding Unenforceability of the ’621,
`’755, and ’086 Patents
`The enforceability of the ’621, ’755, and ’086 patents is an equitable issue that
`must be tried to the Court. ESET understands that only a single witness will be called by
`the parties relating to unenforceability: Ms. Dawn-Marie Bey, the prosecutor of the
`patents. ESET further understands that Ms. Bey is outside the subpoena power of the
`Court and that Finjan will not make her available for live testimony. Therefore, the
`inequitable conduct trial can take place over video or with minimal personnel in Court to
`present arguments, documents, and the videotaped deposition of Ms. Bey. ESET
`anticipates no more than ten total hours of trial time (split equally between the parties)
`would be required to present the case.
`In light of the ease with which the inequitable conduct portion of the trial can be
`conducted (compared to the logistics of a three-week trial involving travel from all parts
`of the United States and Europe), ESET suggests the Court schedule the inequitable
`conduct portion of the case prior to the retrial on all other issues.2
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`2 Because of the ongoing public health emergency and travel restrictions for ESET’s
`international witnesses, ESET believes it would not be feasible to schedule a date for the
`full retrial at this time. Instead, ESET suggests this Court schedule a status conference at
`the Court’s convenience sometime after September 15, 2020.
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`Dated: July 16, 2020
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`Respectfully submitted,
`EVERSHEDS SUTHERLAND (US) LLP
`
`
`
`/s/ Scott A. Penner
`NICOLA A. PISANO, CA Bar No. 151282
` NicolaPisano@eversheds-sutherland.com
`JOSE L. PATIÑO, CA Bar No. 149568
`
`JosePatino@eversheds-sutherland.com
`JUSTIN E. GRAY, CA Bar No. 282452
`
`JustinGray@eversheds-sutherland.com
`SCOTT A. PENNER, CA Bar No. 253716
` ScottPenner@eversheds-sutherland.com
`12255 EL CAMINO REAL, SUITE 100
`SAN DIEGO, CALIFORNIA 92130
`TELEPHONE:
`858.252.6502
`FACSIMILE:
`858.252.6503
`Attorneys for Defendants and Counter-Plaintiffs
`ESET, LLC and ESET, SPOL. S.R.O.
`
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