Blue Coat Systems, which is fighting a $39.5 million jury verdict won by Finjan Inc. (FNJN), said in a legal filing sought to have the verdict overturned based on the legal concept of laches, which protects defendants from prejudice from unreasonable delays in bringing infringement claims.

In an Aug. 20 opening brief regarding non-jury legal issues, Blue Coat counsel Olivia Kim, a partner with Wilson Sonsini Goodrich & Rosati, asserted that Finjan monitored Blue Coat products starting in 2002 but didn’t bring an infringement claim until 2013. This lack of notice unfairly harmed Blue Coat’s ability to respond by engineering its way around Finjan’s patents.

“Despite’s Finjan’s ongoing monitoring of Blue Coat’s products from 2002 until present, Finjan did not file suit against Blue Coat until almost ten years later, on August 28, 2013. Given the abundance of evidence and testimony demonstrating Finjan’s actual or constructive knowledge of Blue Coat’s allegedly infringing activity, Finjan cannot show that its delay was legally justified. At the very least, in light of Finjan’s monitoring and analysis of Blue Coat’s products, Finjan’s negligent or willful blindness as to Blue Coat’s products is no excuse for its
delay in filing suit against Blue Coat.

Indeed, the brief said that by the time Finjan filed suit Blue Coat had long been selling the majority of the accused products, including ProxySG, ProxyAV, WebFilter, and WebPulse, and had completed the acquisition of the Malware Analysis Appliance technology in December 2013.

“Furthermore, during the period of Finjan’s delay in filing suit, Blue Coat spent hundreds of millions of dollars developing and introducing into the market the products that are now accused of infringement.

For example, Blue Coat’s product development efforts included the 2003 acquisition of Ositis Software Inc., whose WinProxy product would form the basis for Blue Coat’s ProxyAV product, and the 2004 acquisition of Cerberian Inc., whose DRTR technology was one of the bases for the continued development of Blue Coat’s WebPulse technology and the 2013 acquisition of Norman Shark, whose technology evolved into Blue Coat’s MAA.

“Throughout this time period, Blue Coat continued in the research and development of its other products and services, including the ProxySG product. If Finjan had filed suit or contacted Blue Coat at an earlier time, Blue Coat would have had the option to invest its resources into alternative non infringing technologies and structure its business and development accordingly. Finjan, however, did not timely file suit—rather, it lay in waiting for almost a decade, during which time Blue Coat continued to develop and acquire the products and services that have been accused of infringement in this case. Because Blue Coat expended substantial resources in the development and marketing of these accused products, Finjan’s delay has caused Blue Coat substantial, material economic prejudice.

“In sum, Finjan’s delay in filing this lawsuit was unreasonable as a matter of law and has caused both economic and evidentiary prejudice to Blue Coat. Finjan is therefore barred under the doctrine of laches from recovering any damages that may have accrued both before and after the date on which Finjan filed this lawsuit. Further, the doctrine of laches bars Finjan from receiving any equitable relief on the claims brought in this lawsuit.”

Blue Coat’s brief also attempts to persuade Judge Beth Labson Freeman that the patents in suit were barred under Section 101 as patent ineligible because they’re based on a abstract idea.

On August 4, a jury returned a unanimous verdict that Blue Coat infringed Finjan’s U.S. Patent Nos. 6,154,844, for a system and method for attaching a downloadable security profile to a downloadable; 6,804,780, a system and method for protracting a computer and network from hostile downloadables; 6,965,968, policy-based caching; and the 7,418,731 for method and system for caching at secure gateways.

The jury also found that U.S. Patent No. 7,647,633, malicious mobile code runtime monitoring system and methods, was infringed by Blue Coat under the Doctrine of Equivalents. Moreover, the jury found each of Finjan’s asserted patents valid.

The verdict followed a two-week trial before Judge Beth Labson Freeman of the U.S. District Court in San Jose, Calif.

Finjan alleged that Blue Coat’s products or combination of products, namely, WebPulse, ProxySG, CAS (or Content Analysis System), MAA (or Malware Analysis Appliance), and ProxyAG infringed one or more of the asserted claims of the asserted patents.

Officials of East Palo Alto, Calif.-based Finjan couldn’t be reached immediately for comment.

—To reach the reporter responsible for this story, please contact Dan Lonkevich at 707 318-7899 or at dan@thepatentinvestor.com