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In the Boardroom with... Phil Hartstein, President & CEO of Finjan Holdings, Inc.
By: Elizabeth White
Oct. 4, 2015 10:45 AM
USPTO Grants 23rd US Patent to Finjan for Malicious Mobile Code Protection
Finjan Holdings, Inc. (NASDAQ: FNJN), has announced that the United States Patent and Trademark Office (USPTO) has granted its subsidiary, Finjan Inc., with U.S. Patent No. 9,141,786 (the '786 Patent) covering malicious mobile code runtime monitoring system and methods. Exponential growth in the use of connected computing devices and content available on the Internet has led to unprecedented challenges in protecting users' data. Today this is recognized as a growing segment of the security sector called cyber-security.
The '786 Patent provides protection systems and methods capable of protecting a personal computer or other network accessible devices from malicious operations. For example, remotely operable code that is protected can include downloadable application programs, unverified software, links to malicious websites, as well as individual software components such as Java™ applets. Protection can also be provided interactively, automatically or mixed configurable manner using protected client, server or other parameters.
SecuritySolutionsWatch.com: Thank you for joining us today, Phil. Before discussing recent developments at Finjan in greater detail please tell us about your background, management team.
Phil Hartstein: Thank you for having me. I am thrilled to be a part of Finjan and believe we have built a solid team to position the company towards future growth and expansion. Julie Mar-Spinola - our Chief Intellectual Property Officer, and VP of Legal Operations - is responsible for building our strong portfolio of IP assets, leading our legal operations and overseeing Finjan's enforcement program. She also heads our public policy efforts ensuring Finjan continues to be an active participant in patent reform discussions by educating lawmakers and industry insiders. Michael Noonan serves as our Chief Financial Officer and manages the day-to-day financial operations of Finjan, including investor relations. He joined our team with an impressive 25 years of experience in corporate finance, corporate governance and investor relations. Prior to Finjan, he served as a senior director of finance for Forgent Networks, an IP company - itself - that notably generated over $140 million in licensing revenues. My responsibility resides with overseeing the direction and management of our existing business lines and future investments. Tremendous expansion over the past two years, has enabled Finjan to become NASDAQ listed company, and consolidate operations in California. Our goal is to achieve positive growth across our four unique business areas in cybersecurity and deliver value to our investors, shareholders and strategic partners.
SecuritySolutionsWatch.com: We saw the recent win against Blue Coat. Can you quickly address the importance of Finjan's patent portfolio.
Phil Hartstein: Absolutely, and you are right, our patent portfolio is important and recognized throughout the industry. Finjan's history and most of what folks know as the Finjan of today is rooted in our robust portfolio of patents. These patents cover proactive behavior-based security technologies, disruptive technologies being deployed in the mid-1990s and today and continuing adoption across software, hardware, and cloud implemented platforms. We have had great success over the past decade with our licensing program which includes top software and technology companies such as Microsoft, M86 Security, Trustwave, Webroot, Secure Computing, McAfee, Websense and most recently an international license with F-secure. We highly value our patents and will continue to pursue licensing opportunities throughout the cybersecurity sector. We also have an active enforcement program where we turn to the courts to pursue companies we believe our violating our patents. Time and time again the value of our patents is proven such as with the recent favorable $39.5 million verdict in our patent infringement lawsuit against Blue Coat Systems. The jury found that 5 Finjan's patents were valid and infringed by Blue Coat. Enforcement is not new to Finjan, in 2006 we filed an infringement suit against a company called Secure Computing that also went to trial. Ultimately, that case resulted in just under $38 million in licensing income. We are committed to our licensing best practices and while we would always prefer to negotiate a licensing deal, where necessary, we will continue to present our patent claims credibly and convincingly to establish the merits of our case.
SecuritySolutionsWatch.com: We understand that the Finjan of today is a broader technology play with unique business areas. We've discussed your patent portfolio but can you offer us a bit more detail on some of your evolving businesses and how Finjan is going after each area and striving towards future growth?
Phil Hartstein: Thank you for that question. The Finjan of today is certainly a much different company than we were just a year ago and arguably back on a path similar to our 1996 founding. In June of this year, Finjan has returned to research and development as we moved into security products for mobile devices. Given the uptrend in mobile device usage, the amount of transient corporate data, the average mobile user presents and represents higher risks of data loss through hacking. The consumer mobile device has become so convenient that we often forget about online security as download apps and blindly agree to terms of service, purchase products, pay bills, connect to free Wi-Fi, and not think twice about our personal data and photos stored on our devices. This prompted the release of our first product, The Finjan Mobile Secure Browser which is available at http://mobilesecurebrowser.finjan.com. Our goal with our initial application was that it be simple to access and easy to use as it protects your mobile device from malicious content from the Internet. More importantly, unlike most mobile applications, the Finjan Secure Browser is intended to bring transparency to users who search for anything on the internet with the promise of not collecting user data - your data. This return to product development is meaningful for Finjan as up until March of 2015, Finjan was bound to a non-compete and confidentiality agreement as a result of our licensing deal with M86 (now Trustwave Holdings, Inc.). Once this non-compete expired, we moved quickly and decisively into the development of mobile applications and our newly launched services business, both of which we expect to announce and release more offerings later in 2015.
Also in June, I indicated we launched our risk advisory consulting business called CybeRiskTM which is based in Tel Aviv and has already expanded its presence in London. Given the high profile headlines of intrusions and data attacks at some major companies around the world, we believe the launch of CybeRisk timely. More importantly, CybeRisk is redefining the cybersecurity risk management paradigm from a pure "technology issue" to a "business issue." As a business issue, we can all agree that education is a major component of fighting these next generation cyber-attacks. Education at the IT and network admin and infrastructure through to the Board level of public and private companies. As such, our CybeRisk team works at the executive team to board room level to quickly remediate current security issues and ultimately set up systems and processes to avoid future issues. CybeRisk is led by Yoram Golandsky, a twenty-year veteran of delivering security technology and advisory services across the financial sector, ecommerce and banking industries. Yoram previously led Cisco's Cyber Security Center of Excellence and under his leadership we are excited about future prospects for this business.
Finally, over the past 20 years, Finjan has been investing in innovation. Whether through our initial hardware and software offerings, our technology advancements and resulting patent portfolio or our two relatively new business lines of mobile applications and consulting services, we are constantly trying to stay ahead of the curve. As such, we have an active investment in Jerusalem Venture Partners Fund VII; Cyber Strategic Partners which is focused on investing in next generation early stage cybersecurity technologies. We believe these areas of business position us well for future growth.
SecuritySolutionsWatch.com: The new Finjan is quite different today from the company that was founded nearly twenty years ago. Please give us a brief company history.
Phil Hartstein: I think the Finjan of today is on a similar path of innovation, technology development, and growth as of the time of our founding. The real difference is today, the market for cybersecurity technologies has emerged as a real momentum driver which can be leveraged from our public company platform. Finjan was founded in Israel back in 1996, with an early focus on flipping computer and network security on its head. That is to say, away from antivirus, and towards proactively detecting threats in a real-time behavior based basis. Following the development of these technologies and receiving patent protection, Finjan developed both software and hardware implemented behavior based security solutions for the range of SMB to enterprise customers. The company relocated its headquarters in San Jose, California in 1997 and through the mid-2000s raised funding from top technology companies and private equity firms including Cisco, Microsoft, Bessemer Venture Partners, Benhamou Global Ventures, Benchmark Capital, HarbourVest Partners and Israel Seed Partners. Prior to going public, these funds invested more than $65 million for development of the technology and patent portfolio that underlies that innovation. In 2008, Finjan spun off its hardware and software division to M86 Security, which merged with Trustwave and has now been acquired by Singapore Telecommunications. Trustwave continues to manufacture and sell products under a Finjan license. In that transaction Finjan received a significant equity stake in M86 (and subsequently Trustwave, as well) and retained its patent portfolio. The licensing under Finjan's portfolio to third parties continues today, as we discussed before. We became a public company in June of 2013 and our first day of trading on NASDAQ was May 12, 2014. I thought I had seen it all but it was a great experience to ring the opening bell for trading at the exchange.
SecuritySolutionsWatch.com: The daily cybersecurity headlines are quite scary: Target, Home Depot, JP Morgan, UPS, just to name a few, and the United States Office of Personnel Management (OPM) recently discovered that the personnel data of 22.1 million people, including not only federal employees and contractors but also their families and friends had been stolen. The White House said in July 2015 that, "cybersecurity is one of the most important challenges we face as a Nation". Please share with us, Phil, your thoughts on today's advanced persistent threat environment.
Phil Hartstein: At Finjan we have always viewed cybersecurity as a crucial issue which is why we've spent the last 20 years developing technology, filing for patent protection, and investing in the space. Now that we are beyond globalization and now are persistently interconnected through the internet, cybersecurity incidents are not only increasing in number but are progressively more destructive. In 2014 the phrase "data breach" became part of the public vernacular with the New York Times devoting more than 700 articles vs. fewer than 125 in the prior year. The Global Risks 2015 report published by the World Economic Forum warned that "90% of companies worldwide recognize they are insufficiently prepared to protect themselves against [cyber-attacks]." Cyber outbreaks fall into two major categories; breaches and sabotage. Breaches in data security can look to compromise personal data, intellectual property, trade secrets, mergers and prices often resulting in an unauthorized party accessing sensitive data. Sabotage often takes the form of denial of service and floods the web with bogus messages in an effort to disable systems or infrastructure which can be recognized as data destruction. These attacks are often widespread impacting the commercial loss of an organization, often leading to communication issues and disrupting operations. Over time they can make an organization vulnerable to regulatory action, negligence claims and ultimately led to loss of trust among customers and partners. In fact, just last week we saw the US SEC fire a shot across the bow of public companies that current data breach reporting practices are not currently meeting a minimum level of shareholder disclosure.
As we look ahead to the emergence of the Internet of Things (IoT), experts estimate that there will be 20-50 billion devices connected to the internet. All of these IoT devices are nothing more that miniature computers with internet access. More devices connected to the internet could lead to more ways for an intelligent hacker to gather data and personal information or even as a gateway to larger hacking prizes. Protecting the networks and devices that use these services and carry data will become increasingly vital since decision making in the evolving IoT world is often done without human intervention.
SecuritySolutionsWatch.com: It certainly sounds like with Finjan's history in cyber security as well as your recent expansion efforts you are positioned well for future growth in an area that is quite compelling. Thanks again for joining us today, Phil.
Phil Hartstein: Thank you. Yes, we are excited about our future growth prospects and will continue to find ways to both license our patents and expand our market position through investments in innovation, strategic acquisitions and partnerships to remain one of the key players in the cyber sector. Appreciate you taking the time to speak with me.
This interview originally appeared in SecuritySolutionsWatch.com. Republished with permission.
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