NEW YORK, Aug. 11, 2014 /PRNewswire/ -- Finjan Holdings,
Inc. (NASDAQ: FNJN), a technology company committed to enabling
innovation through the licensing of its intellectual property,
today is providing an update on the Company's continued progress in
executing its strategy.
Through our wholly-owned subsidiary Finjan Inc., we own a
portfolio of patents related to security software that proactively
detects malicious code and thereby protects end users from identity
and data theft, spyware, malware, phishing, trojans and other
online threats. We continue to maximize the economic benefits of
our technology through further licensing of our technology and
patents, and to broaden our technology and patent holdings through
acquisitions and strategic partnerships.
CORPORATE AND OPERATIONAL HIGHLIGHTS
Since June 2013, when our
cybersecurity business became public, Finjan Holdings has continued
to execute its business strategy to capitalize on today's emerging
cybersecurity and related markets. The following are recent
corporate and operational milestones achieved in the second quarter
of 2014, as well as subsequent events:
- Finjan Holdings' common stock began trading on The NASDAQ
Capital Market on Monday, May 12,
2014.
- On June 27, 2014, Finjan Holdings
was added to the Russell Microcap Index.
- On June 30, 2014, Finjan, Inc.
filed a patent infringement lawsuit against Symantec Corp. alleging
infringement of Finjan U.S. Patent Nos. 7,756,996, 7,757,289,
7,930,299, 8,015,182, and 8,141,154 relating to endpoint, web, and
network security technologies (see details below).
- On July 14, 2014, Finjan's Board
of Directors appointed Daniel Chinn
as Executive Chairman of the Board. In light of Mr. Chinn's
appointment as Executive Chairman, the Nominating and Corporate
Governance Committee, which was previously comprised of
Daniel Chinn and Michael Eisenberg, was reconstituted and now
consists of Michael Eisenberg and
Alex Rogers. Both Messrs. Eisenberg
and Rogers are considered independent under applicable NASDAQ
rules.
- Further on July 14, 2014, Finjan
Holdings' President, Phil Hartstein,
was re-appointed as President and named Chief Executive Officer of
the Company and Shimon Steinmetz,
was re-appointed as the Company's Chief Financial Officer and named
Treasurer.
FINANCIAL UPDATE
- As of June 30, 2014, the Company
held $20.6 million in cash and cash
equivalents.
- The Company ended the second quarter 2014 reporting no
long-term debt.
- Revenues for the second quarter increased to $636,000 compared to $198,000 in the prior year quarter, while cost of
revenues increased to $332,000
compared to $148,000 in the prior
year quarter.
- Total operating expenses for the second quarter were
$3.6 million, an increase of
$1.3 million or 56.1% compared to the
prior year period. These increased costs were primarily due to
increase in legal and consultancy fees for patent enforcement
activities, compensation expenses due to additional employees in
2014 compared to the prior year period, costs related to public
company expenses and various costs related to opening new offices
in Silicon Valley, evaluation of strategic alternatives, franchise
taxes, and directors and officers insurance.
- On November 21, 2013, we made a
$5 million commitment to invest in an
Israel-based limited partnership
venture capital fund seeking to invest in early-stage cyber
technology companies. During the quarter ended June 30, 2014, the fund made a capital call of
$0.5 million. As of June 30, 2014, we had a $4
million outstanding capital commitment to the venture
capital fund.
LICENSING AND ENFORCEMENT ACTIVITIES
As a pioneer in cybersecurity technologies, Finjan developed and
patented technology generally deployed across the endpoint, web,
and networking markets that is capable of detecting previously
unknown and emerging threats on a real-time, behavior-based, basis.
As the network, web and endpoint security industries have
transitioned from signature-based methods of intercepting only
known threats to computers, which were standard in the online
security industry during the 1990s, to behavior-based detection of
malicious code, we believe that our technology is widely used by
third parties. We are committed to preserving and enhancing the
value of our proprietary inventions, as well as protecting our
existing licensing partners' investments in our portfolio, by
offering fair value licenses to currently unlicensed companies.
Following is a brief summary of Finjan's patent rights
enforcement activities. For additional information, please review
the "Legal Proceedings" portion in the "Part II—Other Information"
section of our most recent Form 10-Q filed with the Securities and
Exchange Commission on August 8,
2014, accessible from Finjan's website at www.finjan.com
A. United States District Court
Actions
1. Finjan, Inc. v. FireEye,
Inc., 4:13-cv-03133-SBA, (N.D.
Cal):
We filed a patent infringement lawsuit in the
U.S. District Court for the Northern District of California against FireEye on July 8, 2013, asserting that FireEye is
infringing certain claims of six of Finjan's U.S. patents.
- We amended our Complaint on August 16,
2013 to add a seventh U.S. patent to the list of asserted
patents.
- We are seeking, among other things, a preliminary and permanent
injunction against FireEye from infringing, and/or inducing the
infringement of our asserted patents, an accounting of all
infringing sales and revenues of the accused products, damages no
less than a reasonable royalty and, consistent with proof, enhanced
damages for willful infringement, costs, interest and reasonable
attorneys' fees under 35 U.S.C. §285.
- FireEye answered our Amended Complaint on September 3, 2013, by denying our allegations of
infringement and counterclaiming that the asserted patents are
invalid.
- Both parties have demanded a jury trial.
- On June 6, 2014, the Honorable
Saundra Brown Armstrong entered an Order Granting Motion to Stay
Pending Reexamination of certain Finjan patents.
- Accordingly, this action is off calendar until the U.S. Patent
and Trademark Office (USPTO) completes its administrative
reexamination proceedings.
2. Finjan, Inc. v. Blue Coat,
Inc., Case 5:13-cv-03999-BLF, (N.D.
Cal.):
We filed a patent infringement lawsuit in the
U.S. District Court for the Northern District of California against Blue Coat on August 28, 2013, asserting that Blue Coat is
infringing certain claims of six of Finjan's U.S. patents.
- Blue Coat answered our Complaint on November 26, 2013, by denying our allegations of
infringement and counterclaiming that the asserted patents are
invalid.
- We seek, among other things, entry of judgment that Blue Coat
has infringed, is infringing, has induced infringement of the
above-listed patents, and contributorily infringes the above-listed
patents, a preliminary and permanent injunction from infringing, or
inducing the infringement of our asserted patents, an accounting of
all infringing sales and revenues, damages no less than a
reasonably royalty and consistent with proof, enhanced damages, and
enhanced damages for willful infringement, costs, interest, and
reasonable attorneys' fees under 35 U.S.C. §285.
- Both parties have demanded a jury trial.
- The Court has scheduled a claim construction or "Markman"
Hearing in this matter on August 22,
2014.
- Trial for this action is scheduled for July 20, 2015.
3. Finjan, Inc. v. Websense,
Inc., Case 5:13-cv-04398-BLF, (N.D.
Cal., consolidated):
We filed two patent infringement
matters in the U.S. District Court for the Northern District of
California against Websense on
September 23, 2013 (5:13-cv-04398-BLF
(N.D. Cal.)), and March 24, 2014 (5:14-cv-01353-BLF (N.D. Cal.)), which were consolidated into one
matter on June 23, 2014
(5:13-cv-04398-BLF, (N.D. Cal.)),
asserting that Websense is infringing certain claims of five of
Finjan's U.S. patents.
- We seek, among other things, entry of judgment that Websense
has infringed, is infringing, and has induced infringement of the
above-listed patents, a preliminary and permanent injunction from
infringing, or inducing the infringement of the above-listed
patents, an accounting of all infringing sales and revenues,
damages no less than a reasonably royalty and consistent with
proof, enhanced damages, and enhanced damages for willful
infringement, costs, interest, and reasonable attorneys' fees under
35 U.S.C. §285.
- Websense answered our Complaints, filed on November 26, 2013 and April 21, 2014, respectively, by denying our
allegations of infringement and asserting various "Defenses,"
including non-infringement and invalidity of the asserted
patents.
- We have demanded a jury trial.
- The Court has scheduled a claim construction or "Markman"
Hearing for this matter on November 21,
2014.
- Trial for this action is scheduled for October 5, 2015.
4. Finjan, Inc. v. Proofpoint,
Inc. and Armorize Technologies, Inc., Case 5:13-cv-05808-BLF,
(N.D. Cal.):
We filed a
patent infringement lawsuit in the U.S. District Court for the
Northern District of California
against Proofpoint and its wholly-owned subsidiary, Armorize
Technologies, (collectively "Proofpoint") on December 16, 2013, asserting that Proofpoint and
Armorize Technologies are infringing one or more claims of eight of
Finjan's U.S. patents.
- We seek entry of judgment that Proofpoint and Armorize Technologies have infringed and are
infringing our asserted patents, a judgment that Proofpoint and
Armorize Technologies have induced
infringement of U.S. Patent Nos. 6,154,844, 7,058,822, 7,613,918,
7,647,633, 7,975,305, 8,079,086, and 8,225,408, a preliminary and
permanent injunction from infringing, or inducing the infringement
of the same patents, an accounting of all infringing sales and
revenues, damages no less than a reasonably royalty and consistent
with proof, enhanced damages, and enhanced damages for willful
infringement, costs, interest, and reasonable attorneys' fees under
35 U.S.C. §285.
- On April 27, 2014, this matter
was reassigned to the Honorable Beth Labson Freeman.
- On June 30, 2014, Proofpoint
filed a Motion to Stay pending reexamination of two of eight of our
asserted patents by the USPTO.
- The parties' briefs have been submitted and a Hearing on the
Motion to Stay is set for August 21,
2014.
- The Court has scheduled a claim construction or "Markman"
Hearing for this matter on May 8,
2015.
- Trial for this action is scheduled for January 11, 2016.
5. Finjan, Inc. v. Sophos Inc.,
Case 3:14-cv-01197-WHO (N.D.
Cal.):
We filed a patent infringement lawsuit in the
U.S. District Court for the Northern District of California against Sophos on March 14, 2014, asserting that Sophos is
infringing certain claims of six of Finjan's U.S. patents.
- We amended our Complaint on April 8,
2014, to add a seventh U.S. patent to the list of asserted
patents.
- We seek, among other things, entry of judgment that Sophos has
infringed and is infringing our asserted patents, a judgment that
Sophos has induced infringement of U.S. Patent Nos. 6,804,780,
7,613,918, 7,613,926, 7,757,289, 6,154,844, and 8,667,494, a
judgment that Sophos Inc. has contributorily infringed U.S. Patent
No. 8,566,580, a preliminary and permanent injunction from
infringing, inducing, or contributorily infringing the same
patents, an accounting of all infringing sales and revenues,
damages no less than a reasonably royalty and consistent with
proof, enhanced damages, and enhanced damages for willful
infringement, costs, interest, and reasonable attorneys' fees under
35 U.S.C. §285.
- This matter was reassigned to the Honorable William H. Orrick
on April 10, 2014.
- Sophos filed its Answer to our First Amended Complaint on
May 9, 2014.
- Both parties demanded a jury trial.
- Sophos filed a Motion to Transfer Venue to Delaware on May 9,
2014.
- After considering the parties' briefs and oral arguments on the
Motion to Transfer Venue to Delaware at a hearing on June 18, 2014, the Delaware Court entered its Order Denying
Sophos Motion to Transfer Venue on June 20,
2014.
- Judge Orrick has scheduled a claim construction or "Markman"
Hearing for this matter on February 13,
2015.
- The Court has not yet calendared a trial date.
6. Finjan, Inc. v. Symantec
Corp., Case 3:14-cv-02998-RS (N.D.
Cal.):
We filed a patent infringement lawsuit in the
U.S. District Court for the Northern District of California against Symantec on June 30, 2014, asserting that Symantec is
infringing certain claims of five of Finjan's U.S. patents.
- We seek, among other things, entry of judgment that Symantec
has infringed and is infringing our asserted patents, a judgment
that Symantec has induced infringement of U.S. Patent Nos.
7,756,996, 7,757,289, and 7,930,299, a judgment that Symantec has
contributorily infringed U.S. Patent No. 8,015,182, a preliminary
and permanent injunction from infringing, inducing, or
contributorily infringing the same patents, an accounting of all
infringing sales and revenues, damages no less than a reasonably
royalty and consistent with proof, enhanced damages, and enhanced
damages for willful infringement, costs, interest, and reasonable
attorneys' fees under 35 U.S.C. §285.
- On July 7, 2014, this action was
reassigned to the Honorable Richard Seeborg.
- Symantec has not yet filed its Answer to our Complaint.
- We demanded a jury trial.
B.
Appellate Court Actions:
7. Finjan, Inc. v. Symantec
Corp., Websense, Inc., Sophos Inc., No. 2013-1682, United States Court of Appeals for the Federal
Circuit:
On December 10, 2013,
we appealed to the Court of Appeals for the Federal Circuit
("Federal Circuit") the final judgment entered by the U.S. District
Court for the District of Delaware, Case No. 10-CV-593-GMS, in favor of
Symantec, Websense, and Sophos, where there was a finding of no
liability for U.S. Patent Nos. 6,092,194 and 6,480,962. The issue
presented by us on appeal was whether the Delaware District Court erred in allowing to
stand the jury's verdict that the patents-in-suit are invalid,
whether the District Court erred in not granting our request for a
new trial.
- Symantec, Websense, and Sophos filed their brief on
February 24, 2014.
- We filed our Reply Brief thereto on April 9, 2014.
- Subject to revision of the calendar by the Federal Circuit,
oral argument has been scheduled for September 9, 2014.
C. Proceedings before the United
States Patent & Trademark Office (USPTO)
1. Ex Parte
Reexamination Proceedings
As defined by the USPTO, an "Ex
Parte Reexamination is a "proceeding in which any person may
request reexamination of a U.S. patent based on one or more prior
patents or printed publications. A requester who is not the patent
owner has limited participation rights in the proceedings."
a. U.S. Patent No.
8,079,086
- FireEye filed a first third party request for ex parte reexamination of Finjan's U.S. Patent No.
8,079,086 on October 7, 2013.
- USPTO denied FireEye's request on November 19, 2013, and the reexamination
proceedings terminated on January 14,
2014.
- FireEye filed second third party request for ex parte reexamination of the patent was filed on
February 7, 2014.
- The USPTO denied FireEye's second request on March 27, 2014, and the reexamination proceedings
terminated on April 29, 2014.
b. U.S. Patent No.
7,647,633
- FireEye filed a third party request for ex
parte reexamination of claims 1-7 and 28-33 of Finjan's U.S.
Patent No. 7,647,633 on October 7,
2013.
- The request for reexamination was granted and a non-final
Office Action was mailed November 19,
2013. The non-final Office Action included rejections of
claims 1-7 and 28-33 under various prior art.
- An in-person Examiner interview was conducted at the USPTO on
February 4, 2014, and a timely
response to non-final Office Action was filed on February 19, 2014. Additionally, a petition to
accept an unintentionally delayed priority claim was also
submitted.
- The case is currently awaiting USPTO action.
c. U.S. Patent No.
7,058,822
- FireEye filed a third party request for ex
parte reexamination of claims 1-8 and 16-27 of Finjan's U.S.
Patent No. 7,058,822 on October 7,
2013.
- The request for reexamination was granted and a non-final
Office Action was mailed December 6,
2013. The non-final Office Action included rejections of
claims 1-8 and 16-27 under various prior art.
- An in-person Examiner interview was conducted at the USPTO on
February 4, 2014, and a timely
response to non-final Office Action was filed on March 6, 2014. Additionally, a petition to accept
an unintentionally delayed priority claim was also submitted.
- The case is currently awaiting USPTO action.
2. Inter Partes
Reexamination Proceedings before the USPTO:
As defined by
the USPTO, an "Inter Partes Reexamination" is a "proceeding
in which any person who is not the patent owner and is not
otherwise stopped may request examination of a U.S. Patent issued
from an original application filed on or after November 29, 1999, based on one or more prior
patents or printed publications. Both patent owner and third party
requester have participation rights throughout the proceeding,
including appeal rights."
a. U.S. Patent No.
6,480,962
- Symantec filed a third party request for Inter Partes Reexamination of all claims 1-55 of U.S.
Patent No. 6,480,962 on November 29,
2011.
- The request for reexamination was granted and a non-final
Office Action was mailed January 25,
2012. The non-final Office Action included rejections of
claims 1-55 under numerous prior art references and combinations of
such references.
- We timely filed a response to non-final Office Action, as did
Symantec and the USPTO mailed an Action Closing Prosecution (ACP)
on October 2, 2013.
- We timely responded to the ACP on December 2, 2013, which included proposed claim
amendments for consideration.
- Symantec subsequently responded on January 2, 2014.
- On June 27, 2014, the USPTO
stated that the proposed claim amendments would not be entered and
issued a Right of Appeal Notice.
- On July 1, 2014, we filed a
notice of appeal of the rejection of Claims 1-55.
Please note there can be no assurance that the Company will
be successful in settling or litigating these claims referenced
above.
ABOUT FINJAN HOLDINGS
Through our subsidiary, Finjan,
Inc., we own a portfolio of patents, related to software that
proactively detects malicious code and thereby protects end users
from identity and data theft, spyware, malware, phishing, trojans
and other online threats. Finjan's mission is to invest in
innovation and encourage the development of core intellectual
property. Founded in 1997, Finjan developed and patented technology
that is capable of detecting previously unknown and emerging
threats on a real-time, behavior-based, basis, in contrast to
signature-based methods of intercepting only known threats to
computers, which were standard in the online security industry
during the 1990's. For more information about Finjan, please visit
www.finjan.com.
Follow Finjan Holdings on LinkedIn or on Twitter
@FinjanHoldings.
Cautionary Note Regarding Forward-Looking
Statements
This press release includes "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
include statements regarding our expectations, intentions, beliefs,
and projections about our future results, performance, prospects
and opportunities. These statements can be identified by the fact
that they do not relate strictly to historical or current facts or
by the use of words such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "plan," "project,"
"potential," "should," "will," "will be," "would," the negative of
these terms and similar expressions, but this is not an exclusive
way of identifying such statements. Readers are cautioned that
forward-looking statements are not guarantees of future
performance. Our actual results, performance and achievements may
differ materially from those expressed in, or implied by, the
forward-looking statements contained in this press release as a
result of various risks, uncertainties and other factors. Important
factors that could cause our actual results to differ materially
from our expectations include, without limitation, our ability to
execute our business plan, the outcome of pending or future
enforcement actions, our ability to expand our technology
portfolio, the enforceability of our patents, the continued use of
our technology in the market, the development of a liquid trading
market for our securities and other factors described under
Item 1A, "Risk Factors," as set forth in the Company's Annual
Report on form 10-K filed with the SEC on March 14, 2014, and any subsequent quarterly or
current reports.
The Company will continue to file annual, quarterly, and
current reports, proxy statements and other information with the
SEC. Forward-looking statements speak only as of the dates
specified in such filings or releases. Except as expressly required
under federal securities laws and the rules and regulations of the
Securities and Exchange Commission, we do not undertake any
obligation to update any forward-looking statements to reflect
events or circumstances arising after any such date, whether as a
result of new information or future events or otherwise. You should
not place undue reliance on the forward-looking statements included
in this release or that may be made elsewhere from time to time by
us, or on our behalf. All forward-looking statements attributable
to us are expressly qualified by these cautionary
statements.
SOURCE Finjan Holdings, Inc.