Specifically, Plaintiff Finjan, Inc. sued Defendant Cisco Systems, Inc. for patent infringement based on patents related to computer and network security. Those patents have survived numerous validity and patentability challenges by multiple parties in various venues. Defendant served invalidity contentions and then filed two IPR petitions challenging the patentability of the asserted claims based on a subset of the art identified in its contentions. The Patent and Trial Appeal Board (PTAB) declined to institute review. Defendant then served its expert reports challenging the validity of the patents based on references and combinations of references that it had not asserted in the IPR.
Plaintiff moved for summary judgment that the asserted claims are valid over that prior art as a matter of law. Plaintiff argued that no reasonable jury could find that the “second-string” prior art asserted in the litigation would invalidate the patents under the “clear and convincing standard” when the PTAB declined to even institute review under the lower “reasonable likelihood” standard. Plaintiff reached that conclusion by inferring that Defendant would have used its “best” prior art in the IPR petition because: (1) IPRs are expensive; (2) there are serious estoppel considerations; and (3) the standard required to invalidate claims in IPRs is lower than in district court litigations. In response, Defendant argued that Plaintiff was effectively asking the court to invent a new estoppel arising from a denied IPR petition, and that the estoppel law does not support the labeling of prior art that was not used in a non-instituted IPR as inferior.
The court agreed that the practical implication of Plaintiff’s theory is that whenever a defendant files an IPR petition that is not instituted, the petitioner/defendant will not be able to assert any prior art challenges in a district court because the challenges are presumably based on “second-string” references that cannot meet the higher burden of proof applied in district court. Such a holding would circumvent the statutory requirement that only final written decisions trigger estoppel. According to the court, it was irrelevant that the patents had survived previous validity challenges by other parties because none of those proceedings triggered estoppel against Defendant in this litigation.
Plaintiff did not address the substance of Defendant’s invalidity theories, and instead pointed out that some of the references in Defendant’s expert reports were considered and rejected by the PTAB. But Defendant stressed that most of its invalidity theories have never been considered by the Patent Office, PTAB, or a jury, and for the combinations that were previously considered, its expert’s analysis differed from anything presented before. The court held that Plaintiff failed to establish that there was no material dispute of fact as to the validity of the patents and thus the court denied Plaintiff’s motion for summary judgment of validity.
Practice Tip: Evidence and argument that a patent has survived prior validity and patentability challenges may be insufficient to support a motion for summary judgment of validity. When seeking summary judgment of no invalidity, a patent owner should also consider addressing the merits of the accused infringer’s invalidity theories and identify why those theories fail as a matter of law.
Finjan, Inc. v. Cisco Sys. Inc., No. 17-cv-00072-BLF (N.D. Cal. Feb. 3, 2020) (J. B. L. Freeman)