Finjan, LLC v. Qualys Inc.

Background

Finjan, Inc. moved under Federal Rule of Civil Procedure 72(a) for relief from Magistrate Judge Hixson’s September 17, 2020 order. That order denied discovery concerning overseas sales. Rule 72(a) permits a district court to modify or set aside a magistrate judge’s nondispositive order if it is clearly erroneous or contrary to law.

Discovery dispute

Finjan argued that the overseas-sales discovery was relevant because some asserted patent claims covered a “computer-readable medium,” rather than only computer systems. The court stated that overseas sales are relevant only when connected to a domestic act of infringement. A party cannot recover damages for products that infringe entirely outside the United States.

The parties agreed that Finjan’s infringement contentions described systems that infringed only after assembly, and that the assembly occurred outside the United States. The court therefore agreed with Magistrate Judge Hixson that the products did not infringe in the United States and that their overseas sales were not relevant. The court also rejected Finjan’s argument that computer-readable-medium claims should be treated differently. It explained that those claims are infringed by media storing the infringing code, not merely by code written in the United States. Finjan’s contentions referred to media such as random-access memory, floppy disks, and compact discs, so infringement still would not occur until all relevant code was stored on a single medium.

Ruling

The court held that Finjan had not shown that the magistrate judge’s reasoning was clearly erroneous or contrary to law. It therefore DENIED Finjan’s motion for relief from the magistrate judge’s order.

The court separately DENIED Finjan’s motion to seal because Finjan failed to file a supporting declaration establishing confidentiality. The opinion does not decide the underlying patent-infringement claims.