Netskope Sues Fortinet To Thwart Patent Infringement Claims

‘Fortinet has been unwilling to identify the individual patent claims it thinks Netskope infringes, the specific Netskope products it believes are infringing, or to provide infringement charts,’ Netskope alleges.

Netskope sued fellow cybersecurity vendor Fortinet Thursday to shoot down patent infringement allegations Fortinet has been making in correspondence with Netskope.

The Santa Clara, Calif.-based cloud security vendor said Fortinet has for months been threatening to sue Netskope for patent infringement unless Netskope pays a $100 million licensing fee. Over the past four months, Sunnyvale, Calif.-based Fortinet has accused Netskope of infringing upon six of its patents, with three patents named on Oct. 22, 2021, and another three named on Feb. 7, according to the complaint.

“Fortinet has been unwilling to identify the individual patent claims it thinks Netskope infringes, the specific Netskope products it believes are infringing, or to provide infringement charts illustrating its infringement allegations,” Netskope wrote in a 28-page U.S. District Court filing. “Similarly, Fortinet has refused to provide any evidence of calculations to support its demand for $100 million in damages.”

[Related: Webroot Sues CrowdStrike, Kaspersky, Sophos, Trend Micro]

Fortinet called the lawsuit “a typical Netskope litigation tactic,” alleging the company “abruptly runs to court seeking first-mover advantage” after a patent owner accuses Netskope of infringement. Netskope in February 2021 alleged in court that Bitglass had been emailing Netskope’s customers and accusing them of infringing upon two Bitglass patents when they use Netskope’s products. That case is still open.

“Netskope conceded during months of private negotiations that it infringes at least six of our patents, including those at issue here, by offering to license them from Fortinet,” Fortinet told CRN in an emailed statement. “We will set the record straight during the litigation process to protect our intellectual property.”

Fortinet’s allegations have created a real and immediate controversy between Netskope and Fortinet, the lawsuit alleges, prompting Netskope to seek a judicial declaration that it does not infringe upon the six Fortinet patents in question. Netskope’s lawsuit was accompanied by an unsigned blog post that accused Fortinet of engaging in “bad faith negotiations” and making “unreasonable demands.”

“Fortinet has a history of buying innovation to stockpile patents for the purposes of litigation, and of using litigation to stifle and intimidate competitors and even partners that are showing momentum in the market segments it covets,” Netskope wrote. “Netskope prefers to focus on our customers, not on litigation. But we’ve worked extremely hard on our innovation and need to defend it.”

The six patents Fortinet claims Netskope is violating concern: Netskope’s behavior analytics and/or anomalies capabilities; Netskope’s Data Loss Prevention (DLP) capabilities for enterprise and private networks; Netskope’s risk assessment capabilities; Netskope’s edge-based network capabilities; and Netskope’s cloud traffic inspection capabilities. Netskope in the lawsuit denies all infringement claims.

Netskope said it first heard from Fortinet on Oct. 22, 2021, when the platform security vendor sent Netskope a letter accusing the company of infringing upon three Fortinet patents and demanding that Netskope pay for a license to Fortinet’s entire patent portfolio. The two companies had a call on Dec. 13, during which Fortinet reiterated that Netskope must pay $100 million to license the entire portfolio.

On Dec. 16, 2021, Netskope said Fortinet sent an emailing claiming it was “under pressure to settle or initiate a lawsuit … if Netskope [didn’t] reach final agreement soon to settle.” A day later, Netskope responded, saying none of the three patents identified by Fortinet appeared relevant to Netskope and offering to create a process to assess what relevance Fortinet’s patents had to Netskope’s products.

Then on Jan. 20, 2022, Fortinet threatened to initiate litigation against Netskope unless Netskope agreed by 5 p.m. PT Jan. 24 to pay Fortinet $100 million for a limited term license to Fortinet’s portfolio. Netskope responded on Jan. 21, saying it would consider licensing a subset of Fortinet’s portfolio at an adjusted royalty rate, but Fortinet rejected the specifics of Netskope’s proposal, according to the suit.

On Feb. 7, 2022, Fortinet via email accused Netskope of infringing upon three additional patents and alleged that Netskope had “full knowledge of infringement.” Netskope responded on Feb. 24, saying it was open to a “reasonable business solution.” Fortinet agreed on Feb. 28 to have a call with Netskope, and then on March 9 said it planned to limit the agenda to how much Netskope would pay for a license.

Fortinet on March 11 said it wished to have a preliminary call to discuss the agenda for the call, and then Netskope on March 14 asked Fortinet for an understanding of its licensing models and the valuation for its non-exclusive licenses so that Netskope could provide a reasonable counteroffer. The parties had a call Monday, and Fortinet made a licensing proposal Tuesday based on a percentage of Netskope’s sales.

Netskope on Wednesday expressed disappointment in Fortinet’s proposal, saying via email that the structure and price of Fortinet’s proposal was substantially more than the company had accepted previously. A day later, Netskope emailed Fortinet again and said they were planning to take the dispute to court.

“Given Fortinet’s unambiguous statements that Netskope is infringing Fortinet’s patents … and Fortinet’s repeated threats of litigation, Netskope has a reasonable apprehension that Fortinet will commence litigation against Netskope,” Netskope wrote. “A judicial declaration is necessary to determine … whether Netskope’s products infringe the Patents-in-Suit.”