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01.26.18

How a Microsoft-Sponsored and IBM-Armed Patent Troll Is Used by Lobbyists of Software Patents

Posted in IBM, Microsoft, Patents at 3:34 am by Dr. Roy Schestowitz

Finjan started suing a lot of companies after Microsoft had paid it in 2005

Microsoft and Finjan

Summary: In an effort to make § 101 seem as though it’s tolerant towards software patents, patent law firms and front groups of trolls cherry-pick what they like in the largely-failed lawsuit against Blue Coat Systems

The relatively new euphemism, "public IP companies", is being promoted by patent trolls and their fronts (such as IAM). They keep looking for new identities. Finjan is one such troll — a troll which has been financially backed by Microsoft for a very long time and last year received more ammunition (from IBM [1, 2]).

Unfortunately, as we noted last week, the patent microcosm uses this troll in order to badmouth § 101 and promote software patents (we shall say more about that in the weekend). For example, a few days ago Dilworth IP’s Shin Hee Lee and Anthony D. Sabatelli published this article in which they wholeheartedly embraced a truly disgusting troll. The patent microcosm, i.e. people who profit from agony and litigation, wants to thwart the (near) ban on software patents and it found itself a ‘champion’:

On January 4th, the U.S. Patent and Trademark Office updated their webpage on subject matter eligibility with two new supplementary documents providing further guidance under 35 U.S.C. §101. The two new documents are useful summaries and references for practitioners and others having an interest in the area.

[...]

On January 10, 2018, the court decided Finjan, Inc. Blue Coat Systems, Inc., where upon de novo review it affirmed a district court finding that the underlying software-based subject matter was indeed patent eligible.

What they choose not to mention are the many patents which § 101 did, in fact, invalidate. They cherry-pick just the one thing that suits them. We predicted they would attempt this (as soon as the decision had been published). We first covered the outcome 13 days ago.

Hours ago IAM also did this puff piece for Finjan (not even remotely an effort at journalism). It starts with repetition of talking points from a press release:

Finjan has already recouped the $2 million it spent on acquiring a small package of patents from IBM last year as part of a deal which saw the cyber security business form a new subsidiary, Finjan Blue. The news emerged as the company announced its results for the fourth quarter and for 2017 as a whole, revealing a big jump in revenues to more than $50 million – including around $15 million in net income. It was, in short, a banner year for one of the small band of public IP companies (PIPCOs) that has thrived despite recent legal and regulatory headwinds in the US.

[...]

At the time of the announcement, Finjan CEO Phil Hartstein revealed that not only would the new subsidiary be looking to license the IP but that it was also interested in how the acquired patents might be able to support its product business, Finjan Mobile. “This deal augments our licensing business but also adds value to the product side,” Hartstein explained to this blog.

But on a recent call with analysts to discuss the latest results, Hartstein disclosed that such had been the licensing interest in the assets that the PIPCO had shifted its efforts “to existing licensing and settlement discussions in a positive way, with revenues allocated into Finjan Blue having already offset the current invested expense”.

The deal with IBM and licensing agreements that Hartstein and his team put in place last year with the likes of FireEye and Sophos reflect Finjan’s progress in monetising its IP, but, as with many PIPCOs, it has been far from all plain sailing. Most recently the Court of Appeals for the Federal Circuit ruled that a large part of a $39 million damages award against Blue Coat had to be remanded back to district court. That was just the latest stage in what is proving to be an extremely convoluted litigation battle between the two companies.

What they describe as “convoluted litigation battle” alluding to “two companies” is actually one company and one troll, where the battle is fought in just one direction (Finjan has no products to actually sue over) and the courts mostly reject the troll’s claims. But don’t expect IAM et al to tell the full story. They don’t tell, they sell. They sell agenda; they’re funded by trolls.

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