Finjan Sets Sights on Mobile Security Products, Licensing

Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...

By Malathi Nayak

Scoring mobile security patents for consumer applications could form the building blocks of Finjan Holdings Inc.’s plans to return to selling products and tap recurring revenue.

To that end, cybersecurity company Finjan’s subsidiary Finjan Mobile, which makes consumer-oriented mobile security apps, expects to steadily expand its patent portfolio, Finjan’s chief executive Phil Hartstein said in an interview.

Finjan Mobile currently has five pending U.S. patent applications and, on Jan. 24, was granted its first patent involving technology that lets users securely access file servers through mobile devices. Its portfolio will encompass technology related to transparency into the collection of user data, geolocation, encryption-based technology and privacy management, Hartstein said.

In recent years, licensing disputes and legal battles have weighed on Finjan, whose licensing business makes up 90 percent of its revenue. To reduce its reliance on licensing its cybersecurity technology, it is looking to capture growth in the consumer mobile applications market through Finjan Mobile products.

For Finjan, selling mobile security products will position them to be able to derive a revenue stream they don’t currently have through a licensing program, B.Riley and Co. analyst Andrew D’Silva said.

Putting licensing dollars back into mobile product and technology development will be a “committed focus” of the company, as mobile security threats are on the rise and consumers demand more protection and privacy, Hartstein said.

Before selling off its hardware and software business in 2009, Silicon Valley-based Finjan spent more than a decade building and selling cybersecurity technology to corporate clients. It also focused on licensing its patents, mostly developed during the early days of internet security.

Finjan’s 2009 divestiture included conditions that prohibited it from building and selling products until March 2015. Soon after that, it set up its Finjan Mobile arm as part of its plan to make a comeback as a technology product company.

On the product development side, Finjan Mobile rolled out its VitalSecurity browser app, which can be downloaded for free on iOS and Android devices, in October. The mobile browser app, which provides protection from malicious content, has picked up about 1,000 users on a daily basis since launch.

The app’s total user base has surpassed 100,000, and the company is looking to offer the next iteration of the browser with new features as a paid app by the end of the first quarter, Hartstein said. Following the response to Finjan’s browser app, the company’s board “greenlighted a number of other initiatives underneath of Finjan Mobile,” at a meeting in November of last year, he added.

As Finjan begins charging customers for the app, “that’s when you could start seeing the company begin to monetize the product offering in a meaningful way,” B.Riley and Co.'s D’Silva said. “This is really their move into being a product company versus a licensing company and affords them the opportunity to further monetize their IP and drive more predictable revenues.”

Business professionals who are concerned about their privacy on mobile devices, including millennials who are entering the workforce, are likely to purchase mobile security apps like Finjan’s browser app, D’Silva said.

Mobile Security Licensing Opportunity

Finjan’s revenue is driven by its licensees, including Microsoft Corp., Avast Software Inc. and Trustwave Holdings Inc.

Cybersecurity companies similar to those that currently license Finjan’s technologies could be interested in licensing Finjan Mobile’s technologies, D’Silva said.

Companies that offer mobile security browser apps and mobile device management services that let enterprises push security applications to their employees’ mobile devices could become potential licensees of Finjan Mobile technology, Hartstein said.

A search for Finjan’s VitalSecurity app on the Apple and Google app stores reveals similar products from companies including Korea’s Samsung Electronics and cybersecurity company Trend Micro.

Other prospective licensees could include companies that make direct-to-consumer mobile security apps, such as those that help consumers scan unsecured Wi-Fi networks used, protect users’ mobile browsing experience or secure personal data, according to Hartstein.

However, Finjan Mobile is currently focused on product development and is yet to start licensing deal talks related to mobile security patents, Hartstein said.

“At this stage in market development, there is more emphasis on developing innovative mobile security products than doing licensing deals around the Finjan Mobile patents.” Hartstein said. “It’s more about making sure that customers have access to great patented technology either through Finjan or any of its licensees.”

Growing Finjan Mobile Through Acquisitions

Finjan Mobile’s patent portfolio specifically involves mobile security technology. Its parent company’s cybersecurity patent portfolio also has some technologies that can be applied to mobile use.

Finjan is fighting patent lawsuits against companies including Symantec Corp. and Avast. It has been a party to nearly 30 patent infringement-related suits in the last 10 years, according Bloomberg Law data.

Since 2014, Finjan patents have been challenged in 47 petitions, and the company filed three patent validity suits at the Patent Trial and Appeal Board.

In recent years, Finjan has been bolstering efforts to grow nonlicensing sales through product development, cybersecurity consulting and investing in early stage cybersecurity startups.

While it is yet to make an acquisition that could help enhance Finjan Mobile’s product pipeline, Finjan is “constantly evaluating opportunities,” Hartstein said.

That is “another indicator that we have decided that this an area we are going to pursue more deeply,” Hartstein said.

To contact the reporter on this story: Malathi Nayak in Washington at

To contact the editor responsible for this story: Mike Wilczek at

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Intellectual Property on Bloomberg Law