Finjan – developer turned troll?

Israel based software company Finjan has sued five rival security companies, including Symantec and McAfee, Webroot Software, Websense and Sophos.

In a lawsuit filed Monday in the U.S. District Court of Delaware, Finjan, claims that products of the defendants including McAfee’s Web Gateway and VirusScan software, Symantec’s Brightmail Gateway and Norton Antivirus all infringe core technology patents for antivirus products and security services that are held by Finjan.

Formerly a technology vendor, Finjan has sold out to M86, another security company, but still owns a patent portfolio, of about a dozen patents that are related to computer security. The company is now trying to claim royalties from these patents.

In 2008, Finjan won a jury verdict of 9.2 million dollars against Secure Computing which is now owned by McAfee.Having demonstrated that Secure Computing’s software packages Webwasher and CyberGuard TSP were infringed, A federal judge then increased the damages awarded to $13.8 million.

The company has asked the court to award unspecified financial damages and an injunction preventing the companies from selling their products.

COMMENT

Since the company no longer manufacturers, there is no longer the mutual destruction arrangement favoured by the high-tech world as an in-built mechanism to prevent companies going after injunctions. That said, it is clear that as they no-longer have a market share, Finjan have no interest in preventing others from using their patents. They simply want a reasonable royalty. It seems to me that it is not non-practicing entities that are the problem , but that there is no simple means to calculate fair royalties and to ensure that alleged infringers swiftly identify if they do indeed infringe, and, if so, that they enter into licensing negotiations in good faith.

I think that the cost of litigation in the US is the real problem, not that entities enforce their patents. Identifying and buying up patents to enforce (trolling) is not morally different from a litigating law firm working such cases on a percentage, or a university – which is typically a non-profit organization that benefits from the tax-payer and from philanthropic donations – from filing and then licensing its patents. These business models are acceptable in a free market.  Patents are not licenses to manufacture. They merely provide exclusion rights and using them for that purpose is legitimate. Trading in patents is based on the exclusion right being enforceable.  The ownersof this patent, if they manage to collect royalties, will no-doubt invest the money back into the economy. Transferrring patent rights to those that need it by licensing, and reinvesting resources is the basis of business. Good luck to them. Shame I don’t have shares.



Categories: infringement, Israel, Israel Related, Licensing, NPE, software Patents, telecommunications

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