Finjan Holdings Inc. CEO Phil Hartstein is still considering his options after the Court of Appeals for the Federal Circuit invalidated two patents at issue in an infringement action his company brought in 2010 against Symantec Corp. and others.

Hartstein said in a phone interview on Tuesday, Sept. 16, that it’s possible the company might appeal and it’s also possible it may drop the action and pursue its more fruitful infringement actions against the same companies.

Indeed, Finjan already has filed patent infringement actions involving more than 20 patents against FireEye Inc., Blue Coat Inc., Websense Inc., Sophos Inc. and Symantec in U.S. District Court in the Central District of California.

The adverse ruling came in the case Finjan v. Symantec Corp. et al which was brought in July 2010 in U.S. District Court for the District of Delaware.

The action was originally against 5 infringers, though Finjan settled with two of them and then proceeded to trial with Symantec, Websense and Sophos.

After a 13 day trial in December 2012 a jury ruled in favor of the defendants that the patents at issue were invalid because of obviousness. The next day, the U.S. District Court ruled the patents at issue invalid and soon after Finjan appealed to the Federal Circuit.

The patents at issue concerned a method for protecting computers and networks from hostile downloads, developed in 2000 by Shlomo Touboul and now owned by Finjan.

After the ruling of invalidity, Finjan appealed to the Federal Circuit, which affirmed the trial court’s ruling in what’s known as a Rule 36 finding, which doesn’t even provide the courtesy of a written opinion.

“There’s not a lot we can read into that,” Hartstein said in an interview.

Hartstein, a former vice president at Erich Spangenberg’s IPNavigation Group, played down the significance of the ruling saying the infringement action was brought in 2010 before Finjan had changed the focus of its infringement litigation strategy.

“They were 2 of 20 patents we were using in our licensing strategy and are not connected to our six active cases,” he said.

Hartstein joined Finjan as CEO in April 2013 after the former software company was reborn as a patent assertion company and recapitalized with investments from Benchmark, HarbourVest Partners, Benhamou Global Ventures, Cisco Systems Inc. and Iroquois Capital LP.

Prior to that, Hartstein worked for a year at IPNAV, where he was responsible for managing all aspects of the company’s portfolio enforcement programs, for a number of clients.

From 2009 to 2012, Hartstein was a managing director of Rembrandt IP Solutions, a patent investment fund.

Hartstein said that in 2010 Finjan didn’t have a sophisticated strategy for bringing infringement actions.

“The new strategy since 2010 is much more focused on what our IP means,” he said. “We’re focused on the legal and technical merits.”

For his part, Hartstein said patent assertion companies may need to rethink their current infringement action strategy because it is highly susceptible to what he calls “binary events that can cause wild volatility.”

To be sure, recent adverse rulings by the Federal Circuit have hurt several companies including VirnetX Holdings Corp. and Vringo Inc.

Shares of Zephyr Cove, Nevada-based VirnetX fell 45% on Tuesday Sept. 16 after the Federal Circuit threw out a $368.2 million jury award VirnetX had won in 2012 against Apple Inc. The case has been sent back to the trial court for further proceedings based on instructions from the Federal Circuit.

Similarly, shares of New York-based Vringo fell 72% after the Federal Circuit on Aug. 15 invalidated patents involved in an infringement action Vringo filed against AOL Inc. and Google Inc. The appellate court also threw out a $30 million jury award and 3.5% royalty stream that might have been worth hundreds of millions to Vringo.

Vringo has said it is seeking an en ban c review of the ruling before the full Federal Circuit. VirnetX is still considering its options.

Adverse rulings like those against VirnetX, Vringo and Finjan are “a challenge for liquidity investors,” Hartstein said.

The companies that succeed “are going to be the ones that collect revenue from licensing agreements,” he said.

“You first have to focus on the legal and technical merits,” he said. “Some companies are underfunded and don’t have the resources to do that. Others don’t have the expertise. It comes down to credibility. We’re focused on credibility.”

Eventually, he hopes Finjan and others “will be able to achieve less risk, less cost and more value for patent owners.”

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