By Ryan Davis

Law360 (May 11, 2020, 10:32 PM EDT) -- The Federal Circuit on Monday upheld a Patent Trial and Appeal Board decision that ESET LLC failed to prove that a Finjan computer antivirus patent is invalid, dismissing ESET's argument that it faced "undeserved prejudice" from the board, a claim Finjan called "simply nonsense."

In a one-line summary affirmance after the case was submitted on the briefs Wednesday without oral argument, the appeals court affirmed the PTAB's January 2019 finding that earlier patents cited by ESET do not render Finjan's patent invalid as obvious.

The case is the first one in which the Federal Circuit has decided a case on the briefs after canceling oral arguments due to the pandemic and then issued a summary affirmance. In all other cases where the court has not heard arguments, it has issued a full opinion.

On appeal, ESET had argued that the board's decision upholding the patent, one of several Finjan has accused it of infringing, was based on an incorrect claim construction, and that a sequence of events early in the case indicated that the PTAB judges were biased against it.

ESET challenged the patent on two grounds, but the PTAB initially only instituted review on one of them and made clear that it thought ESET had a weak case on the other one.

But after the U.S. Supreme Court's SAS Institute decision in April 2018 held that the PTAB must issue a final decision on all claims and grounds in the petition, the board instituted review on all claims, but not before asking ESET to consider dropping the ground it had previously rejected.

ESET told the Federal Circuit that it refused and was "seeking only to employ the [inter partes review] processes to which it was entitled." It said it did so "despite the risk of incurring the board's wrath," which it said the board displayed by ultimately upholding the patent.

ESET told the appeals court that the board's final decision abandoned the board's original claim construction for one advanced by Finjan, a move ESET said "resulted from undeserved prejudice" against ESET for its refusal to drop one of the grounds.

Finjan did not mince words in its appraisal of ESET's argument in its response, telling the Federal Circuit that to accept it, the court would have to believe that the board "engaged in a conspiracy to institute trial on every ground requested in the petition just so that it could harbor a personal grudge against ESET."

"This baseless conspiracy theory is unprofessional, strains credulity, and is simply nonsense," it said.

The U.S. Patent and Trademark Office intervened in the case to defend the board, telling the Federal Circuit that it did nothing wrong in making clear to ESET that it believed one of the grounds was weak, and that its decision to review all the grounds in the petition actually favored ESET.

"ESET therefore fails to establish any arbitrary action by the board or identify any harm as a result of the board's action," the office said.

Since it affirmed the decision to uphold the patent without opinion, the Federal Circuit did not opine on those issues.

The patent is one of six that Finjan has accused ESET of infringing in a suit in the Southern District of California. A jury trial in the case got underway March 10 on five of the patents, excluding the one at issue in Monday's decision, since that part of the case was stayed pending the outcome of the appeal.

But after three days of proceedings, during which Finjan said it was seeking $40 million in damages, U.S. District Judge Cathy Ann Bencivengo called a mistrial and dismissed the jury after President Donald Trump declared the COVID-19 pandemic a national emergency.

The Federal Circuit has been canceling oral argument in many cases during the pandemic and reaching decisions on the briefs. This case was unique in that the court did that and issued a summary affirmance.

The court has long had a practice of only issuing summary affirmances when oral argument is held, and providing written opinions when it is not, so that the parties have an opportunity to hear the court's views one way or the other.

The summary affirmance in this case indicates the court may not do that in all cases where arguments were canceled due to the pandemic.

Counsel for ESET and Finjan could not immediately be reached for comment Monday. The USPTO does not comment on litigation.

The patent-in-suit is U.S. Patent No. 7,975,305.

U.S. Circuit Judges Alan Lourie, Richard Linn and Evan Wallach sat on the panel for the Federal Circuit.

ESET is represented by Nicola A. Pisano, Jose L. Patiño and Justin E. Gray of Eversheds Sutherland.

Finjan is represented by Paul Andre, James Hannah and Jeffrey Price of Kramer Levin Naftalis & Frankel LLP.

The USPTO is represented by Michael Forman, Thomas Krause, Farheena Yasmeen Rasheed and Maureen Donovan Queler of the agency's office of the solicitor.

The case is ESET LLC v. Finjan Inc., case number 19-1716, in the U.S. Court of Appeals for the Federal Circuit.

--Editing by Abbie Sarfo.

For a reprint of this article, please contact reprints@law360.com.