On January 10, 2018, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) upheld the patentability of multiple patents under 35 U.S.C. § 101 (”§ 101”) in Finjan, Inc. v. Blue Coat Systems, Inc., but reversing on both infringement counts of two patents and one of the two patents’ damage amounts for failure to apportion.

In 2013, Finjan, Inc. (“Finjan”) sued Blue Coat Systems, Inc. (“Blue Coat”) for infringement of four Finjan’s patents that were directed to identifying and protecting against malware: U.S. Patent No. 6,154,844 (“the ‘844 Patent”), U.S. Patent No. 7,418,731 (“the ‘731 Patent”), U.S. Patent No. 6,965,968 (“the ‘968 Patent”), and U.S. Patent No. 7,647,633 (“the ‘633 Patent”). The U.S. District Court concluded that the ‘844 Patent was patent-eligible under §101, found that Blue Coat infringed on the ‘844, ‘731, and ‘968 Patents, and awarded Finjan approximately $40 million for Blue Coat’s infringement.  Blue Coat appealed all three decisions.

On the § 101 issue in the ‘844 Patent, Blue Coat argued that even though the claims were directed to a new idea, the ‘844 Patent did “not sufficiently describe how to implement that idea,” relying on both Apple, Inc. v. Ameranth, Inc., 842 F.2d 1229 (Fed. Cir. 2016), Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253 (Fed. Cir. 2016), and Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307 (Fed. Cir. 2016).  Claim 1 of the ‘844 Patent recites:

“A method comprising:  receiving by an inspector a Downloadable; generating by the inspector a first Downloadable security profile that identifies suspicious code in the received Downloadable; and  linking by the inspector the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.”

At claim construction, the District Court construed “Downloadable security profile that identifies suspicious code in the received Downloadable” to mean “a profile that identifies code in the received Downloadable that performs hostile or potentially hostile operations.”  Using this interpretation, the Federal Circuit rejected Blue Coat’s argument and discerns the invalid patents-at-issue in those cases, which only describe mere results, with the ‘844 Patent, by noting that the claims in the ‘844 Patent recite more than a mere result and that the ‘844 Patent’s claims did “recite specific steps – generating a security profile that identifies suspicious code and linking it to a downloadable – that accomplish the desired result.”  Finding that the claims in the ‘844 Patent are directed to a non-abstract improvement in computer functionality, the Federal Circuit ended its analysis at step one of the Alice two-step test and concluded the ‘844 Patent to be subject matter eligible.

In the next two parts of its opinion, the Federal Circuit agreed with the District Court’s jury’s finding of infringement of the ‘844 and ‘731 Patents: the Federal Circuit concluded that Blue Coat was entitled to a judgment as a matter of law of non-infringement for the ‘968 Patent, as “the accused products do not perform the claimed ‘policy index’ limitation.”  Therefore, the Federal Circuit affirmed the award with respect to the ‘844 and ‘731 Patents and vacated the award with respect to the ‘968 Patent, as there was no infringement.

This case raises questions as to the consistency of the application of the § 101 inquiry between the different Federal Circuit judges. Comparing past cases like RecogniCorp, LLC v. Nintendo Co. Ltd and Smart Systems Innovations, LLC v. Chicago Transit Authority, the claims there were much more focused and the Federal Circuit found the claims to be patent ineligible. Since the broad claims in this case were interpreted by the District Court to be more specific than its plain language, the Federal Circuit reviewed the claims in light of that construction and found the claims here to be patent eligible. This appears to suggest that in a § 101 case, it is important to get a favorable claim construction by the District Court. In turn, this may result in a favorable decision if the Federal Circuit panel that day decides to base its opinion on the construction provided at the District Court level.