Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 1 of 8
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`FINJAN, INC.,
`Plaintiff,
`
` v.
`JUNIPER NETWORKS, INC.,
`Defendant.
` /
`
`No. C 17-05659 WHA
`
`ORDER GRANTING
`MOTION TO DISMISS
`
`INTRODUCTION
`Defendant in this patent infringement action moves to dismiss plaintiff’s claims of
`willfulness and induced infringement for failure to state a claim. The motion is GRANTED.
`STATEMENT
`Plaintiff Finjan, Inc., brings this action against defendant Juniper Networks, Inc., for
`infringement of eight patents — U.S. Patent Nos. 6,154,844 (“the ’844 patent”), 6,804,780 (“the
`’780 patent”), 7,647,633 (“the ’633 patent”), 7,613,926 (“the ’926 patent”), 8,141,154 (“the
`’154 patent”), 8,677,494 (“the ’494 patent”), 7,975,305 (“the ’305 patent”), and 8,225,408 (“the
`’408 patent”) — pertaining to malware-detection technology. The following is taken from the
`well-pled allegations of the complaint (Dkt. No. 1 ¶¶ 9–33).
`On June 10, 2014, Finjan contacted Juniper “regarding a potential license to Finjan’s
`patents.” On July 2, Finjan emailed Juniper, “We believe a license to Finjan’s patent portfolio
`could be beneficial to some [of] Juniper’s security products and services” (brackets in original).
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`Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 2 of 8
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`That email appended an “exemplary claim chart,” not for any of the eight patents-in-suit, but for
`U.S. Patent No. 6,965,968 (“the ’968 patent”), ostensibly another specimen from the same
`patent portfolio. Finjan also offered to provide additional claim charts so Juniper could
`“evaluate Finjan’s patent portfolio,” but only if Juniper would agree to receive said claim charts
`under a non-disclosure agreement (id. ¶¶ 34–35).
`On January 12, 2015, Finjan reiterated its NDA offer in a meeting with Juniper’s
`unnamed senior director of IP, litigation, and strategy. Juniper declined and, on February 13,
`sent Finjan a letter identifying ten patents that Juniper believed to be “prior art” to the ’968
`patent. Finjan attempted to follow up — apparently via email — on February 18 and 20, but
`Juniper did not respond. On September 30, Finjan sent Juniper a letter explaining what Finjan
`believed to be distinctions between the ten “prior art” patents identified by Juniper and the ’968
`patent. Again, Juniper did not respond (id. ¶¶ 36–38).
`On October 15, 2015, Finjan contacted Juniper’s unnamed deputy general counsel “to
`discuss [Juniper’s] products and how they read on Finjan’s patents.” The deputy general
`counsel referred Finjan back to Juniper’s senior director of IP, litigation, and strategy. The
`latter indicated to Finjan in a phone call on November 24 that “he did not think Finjan was
`worth [Juniper’s] time and . . . expressed no interest in understanding the analysis that Finjan
`had prepared regarding [Juniper’s] products and how they relate to Finjan’s patents.” He “also
`repeatedly turned that telephone conversation toward the topic of litigation, referenced his own
`hypothetical deposition, refused to sign an [NDA], and stated that if Finjan shared any more
`exemplary claim charts with him, he would share them with other entities” (id. ¶¶ 39–40).
`On February 2, 2016, Finjan again contacted Juniper’s deputy general counsel to
`“express concern that [Juniper] did not seem to be taking Finjan’s efforts to engage in licensing
`discussions seriously, and to discuss how [Juniper’s] products related to Finjan’s patents.” The
`complaint does not specify how the deputy general counsel responded on that occasion but
`concludes Juniper has “refused to take a license to Finjan’s patents” (id. ¶¶ 41–42).
`In summary, Finjan alleges Juniper has known since June 2014 about Finjan’s patent
`portfolio, Finjan’s efforts to initiate licensing negotiations for said portfolio, and Finjan’s
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`Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 3 of 8
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`“representative” claim chart mapping the ’968 patent — again, not one of the patents-in-suit —
`onto Juniper’s accused products. In response, Juniper continued to sell the accused products,
`made no attempt to redesign said products, rebuffed Finjan’s attempts to initiate negotiations,
`refused to accept Finjan’s offered NDA, and “expressed more interest in Finjan’s status as a
`practicing entity.” Based on the foregoing allegations, which Finjan contends constitute
`“blatant,” “egregious,” “complete,” and “reckless” disregard of its patent rights, Finjan claims
`Juniper “has acted recklessly and continues to willfully, wantonly, and deliberately engage in
`acts of infringement” of all eight patents-in-suit such that enhanced damages and attorney’s fees
`are justified under Sections 284 and 285, respectively, of Title 35 of the United States Code (see
`id. ¶¶ 68–70, 84–86, 103–05, 121–23, 138–40, 153–55, 173–75, 190–92).
`Finjan also alleges Juniper updates and maintains a website with various user guides and
`operating instructions for the accused products (id. ¶¶ 75, 91, 110, 128, 160, 180, 197). Based
`on these allegations, Finjan claims Juniper has induced its customers to infringe each of the
`patents-in-suit save and except for the ’154 patent. Each induced infringement claim contains
`virtually identical boilerplate language, an example of which is reproduced here in full (see id.
`¶¶ 73–74, 89–90, 108–09, 126–27, 158–59, 178–79, 195–96):
`In addition to directly infringing the ’844 Patent, Defendant
`indirectly infringes the ’844 Patent pursuant to 35 U.S.C. § 271(b)
`by instructing, directing, and/or requiring others, including its
`customers, purchasers, users, and developers, to perform one or
`more of the steps of the method claims, either literally or under the
`doctrine of equivalents, of the ’844 Patent, where all the steps of
`the method claims are performed by either Defendant, its
`customers, purchasers, users or developers, or some combination
`thereof. Defendant knew or was willfully blind to the fact that it
`was inducing others, including customers, purchasers, users or
`developers, to infringe by practicing, either themselves or in
`conjunction with Defendant, one or more method claims of the
`’844 Patent, including at least Claims 1–14 and 23–31.
`Defendant knowingly and actively aided and abetted the direct
`infringement of the ’844 Patent by instructing and encouraging its
`customers, purchasers, users and developers to use the ’844
`Accused Products. Such instruction and encouragement includes,
`but is not limited to, advising third parties to use the ’844 Accused
`Products in an infringing manner, providing a mechanism through
`which third parties may infringe the ’844 Patent, advertising and
`promoting the use of the ’844 Accused Products in an infringing
`manner, and distributing guidelines and instructions to third parties
`on how to use the ’844 Accused Products in an infringing manner.
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`Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 4 of 8
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`Juniper now moves to dismiss Finjan’s willfulness and induced infringement claims for
`failing to state a claim (Dkt. No. 23). This order follows full briefing and oral argument.
`ANALYSIS
`
`LEGAL STANDARD.
`1.
`To survive a motion to dismiss, a complaint must plead “enough facts to state a claim to
`relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A
`claim has facial plausibility when the party asserting it pleads factual content that allows the
`court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
`Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When ruling on a motion to dismiss, a court may
`generally consider only allegations in the pleadings, attached exhibits, and matters properly
`subject to judicial notice. The court accepts factual allegations in the complaint as true and
`construes the pleadings in the light most favorable to the nonmoving party. Manzarek v. St.
`Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030–31 (9th Cir. 2008). Conclusory allegations
`or “formulaic recitation of the elements” of a claim, however, are not entitled to the
`presumption of truth. Iqbal, 556 U.S. at 681.
`2.
`WILLFULNESS.
`Section 284 provides, “When the damages are not found by a jury, the court shall assess
`them. In either event the court may increase the damages up to three times the amount found or
`assessed.” There is no precise rule or formula for awarding damages under Section 284, but a
`district court’s discretion to do so is not to be exercised in “a typical infringement case.”
`Rather, such enhanced damages are “generally reserved for egregious cases of culpable
`behavior” involving conduct that is “willful, wanton, malicious, bad-faith, deliberate,
`consciously wrongful, flagrant, or — indeed — characteristic of a pirate.” Halo Elecs., Inc. v.
`Pulse Elecs., Inc., 136 S. Ct. 1923, 1931–32 (2016). “Knowledge of the patent alleged to be
`willfully infringed continues to be a prerequisite to enhanced damages.” WBIP, LLC v. Kohler
`Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (citing Halo, 136 S. Ct. at 1932–33).
`Here, Juniper contends Finjan fails to state a claim for willfulness because it fails to
`allege (1) that Juniper had pre-suit knowledge of the patents-in-suit, as opposed to Finjan’s
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`Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 5 of 8
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`patent portfolio or the non-asserted ’968 patent, and (2) conduct arising to the level of
`egregiousness described in Halo (Dkt. No. 23 at 6–12). This order agrees on both fronts.
`Finjan’s opposition to the instant motion fails to come to grips with the deficiencies in
`its complaint. Despite regurgitating much of the complaint, the opposition fails to identify any
`factual allegation that Juniper had pre-suit knowledge of the eight patents-in-suit (Dkt. No. 24
`at 4, 6–8). First, Finjan repeats that it met with Juniper on multiple occasions “to discuss
`specifically how Juniper’s products related to Finjan’s patents,” but generally discussing
`purported infringement of Finjan’s patent portfolio hardly translates to specifically alerting
`Juniper to infringement of the patents-in-suit. Second, Finjan points out that its “exemplary”
`’968 patent “lists the asserted ’844 patent.” That Finjan must resort to such a remote
`connection in a non-asserted patent to identify a specific reference to just one of the patents-in-
`suit aptly demonstrates the frailty of Finjan’s allegations (or lack thereof) regarding Juniper’s
`pre-suit knowledge. Third, Finjan points out that it exchanged letters with Juniper debating
`whether or not ten other patents qualified as “prior art” to the ’968 patent. Finjan does not even
`attempt to explain how a garden-variety disagreement over the validity of a non-asserted patent
`constitutes pre-suit knowledge of the patents-in-suit. Fourth, Finjan contends it “pled that
`Juniper had knowledge of each individual Asserted Patent and continued its infringing activity
`despite this knowledge.” The portions of the complaint cited by Finjan, however, merely assert
`in conclusory terms that Juniper had some awareness of Finjan’s patent portfolio, which in turn
`included the patents-in-suit. They contain no factual allegations that Juniper had actual pre-suit
`knowledge of the eight patents-in-suit.*
`Finjan similarly fails to identify any factual allegation that Juniper exhibited egregious
`behavior on par with that described in Halo (id. at 5, 8–9). Finjan repeats that Juniper refused
`
`* In its opposition brief, Finjan also claims it “alleged Juniper’s conversations with other infringers
`who are defendants in Finjan’s co-pending cases, all of which involve most, if not all of the same patents,
`demonstrating that Juniper was well aware of Finjan’s asserted patents, as the point of Juniper’s discussions was
`going to be about the Asserted Patents in those co-pending cases with those defendants” (Dkt. No. 24 at 6–7).
`Finjan cites Paragraph 40 of the complaint for these purported allegations. Paragraph 40 alleges that Juniper’s
`director of IP, litigation, and strategy “repeatedly turned [a] telephone conversation toward the topic of
`litigation” and said he would share any more “exemplary” claim charts with unspecified “other entities” but
`does not further allege anything about Finjan’s co-pending cases or Juniper’s awareness thereof. Details added
`in Finjan’s opposition brief are not a substitute for well-pled allegations in the complaint.
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`Case 3:17-cv-05659-WHA Document 30 Filed 02/14/18 Page 6 of 8
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`to sign an NDA to see more claim charts, warned that it would share any more claim charts with
`“other entities” (which Finjan construes to mean other accused infringers), refused to consider
`more of Finjan’s purported infringement analysis, expressed more interest in whether or not
`Finjan practiced its patents, refused to respond to Finjan’s September 30 letter distinguishing
`the ten “prior art” patents identified by Juniper, said Finjan “was not worth Juniper’s time,
`pushed licensing conversations toward litigation, and referenced conversations with other
`defendants in Finjan’s litigations.” Finjan contends these allegations demonstrate Juniper’s
`“willful blindness to its infringement and its subjective intent to ignore Finjan’s patent rights,
`while continuing to sell products that it knew infringed” (id. at 5).
`The foregoing allegations, even viewed in the light most favorable to Finjan, show at
`most that Juniper gave Finjan less attention than Finjan felt it deserved. In other words, Finjan
`essentially argues that a target refusing to play ball on Finjan’s terms must be willfully
`infringing its patents. Accepting Finjan’s well-pled factual allegations as true — as we must for
`present purposes — this order disagrees. Finjan accused Juniper of infringing its patent
`portfolio, not any of the particular patents-in-suit; Juniper looked at Finjan’s “exemplary” claim
`chart on a non-asserted patent, disagreed with Finjan’s infringement theory, sent Finjan a letter
`identifying what Juniper believed to be prior art (again, to a patent Finjan eventually decided
`not to sue on), and declined to debate further. Finjan asked Juniper to negotiate a license;
`Juniper had enough confidence in its position to talk about litigation instead. Finjan asked
`Juniper to sign an NDA so Finjan could continue making its case without revealing its hand to
`other accused infringers; Juniper refused. Finjan characterizes Juniper’s reaction as “refusing to
`respond” to allegations of infringement (see id. at 5, 15), but Finjan’s own allegations show that
`Juniper did respond — it just wasn’t the response Finjan wanted. Finjan had no right to insist
`that Juniper sign an NDA instead of telling other targets how Finjan construed its patents (so
`that inconsistencies in Finjan’s positions could see the light of day). None of these allegations,
`taken as true, indicate that Juniper willfully ignored known infringement of the eight patents-in-
`suit. At most, they suggest Juniper’s unwillingness to spend more time and energy rebutting
`what it perceived to be meritless accusations of infringement of Finjan’s patent portfolio.
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`Finally, Finjan cites the undersigned judge’s recent decision in Straight Path IP Group,
`Inc. v. Apple Inc., No. C 16–03582, 2017 WL 3967864 (N.D. Cal. Sept. 9, 2017), for the
`proposition that it “does not have to prove willfulness at the pleading stage” (Dkt. No. 24 at 1,
`4–6, 8–9). As Finjan recognizes, however, the plaintiff in Straight Path alleged the defendant
`“was aware of four of the asserted patents and their infringement” prior to that lawsuit (id. at 5
`(emphasis added)). Here, in contrast, Finjan does not allege facts showing that Juniper actually
`knew of the eight patents-in-suit, let alone any willful infringement thereof. As explained,
`allegations that Juniper knew about Finjan’s patent portfolio and an “exemplary,” non-asserted
`patent remain insufficient to state a claim for willfulness in this action.
`3.
`INDUCED INFRINGEMENT.
`Section 271(b) provides, “Whoever actively induces infringement of a patent shall be
`liable as an infringer.” Induced infringement “requires knowledge that the induced acts
`constitute patent infringement.” Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766
`(2011). Such knowledge requires that the accused inducer not only had “knowledge of the
`patent in suit” but also “knew the acts were infringing.” Commil USA, LLC v. Cisco Sys., Inc.,
`135 S. Ct. 1920, 1926, 1928 (2015). Induced infringement also requires proof that the accused
`inducer possessed “a specific intent to encourage another’s infringement of the patent.” Vita-
`Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1328 (Fed. Cir. 2009).
`Here, Juniper contends Finjan fails to state a claim for induced infringement because it
`fails to allege that Juniper had either the requisite knowledge or intent (Dkt. No. 23 at 12–17).
`This order agrees. As Finjan itself points out, the sufficiency of its allegations regarding
`willfulness and induced infringement presents overlapping issues (see Dkt. No. 24 at 10).
`Under the heading of induced infringement, Finjan essentially rehashes its arguments that it
`sufficiently alleged Juniper’s pre-suit knowledge to show willfulness (see id. at 10–12). This
`order again rejects Finjan’s arguments for the reasons already stated. To repeat, Finjan alleges
`no facts showing Juniper’s pre-suit knowledge of the actual patents-in-suit, let alone any
`knowing infringement thereof. This alone requires dismissal of Finjan’s induced infringement
`claims. See Commil, 135 S. Ct. at 1926, 1928. In light of this deficiency in the complaint, this
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`order need not further examine Finjan’s allegations and arguments regarding Juniper’s
`intentions with respect to the actions of third parties (see Dkt. No. 24 at 12–16).
`LEAVE TO AMEND.
`4.
`In the event that its complaint falls short as to willfulness or induced infringement
`(which, as explained, it does), Finjan seeks leave to amend to “provide additional specific
`details about its discussions with Juniper relating to Juniper’s infringement of Finjan’s asserted
`patents” (id. at 16). Given the vagueness of Finjan’s allegations and its persistent attempts to
`equate a patent portfolio and a non-asserted patent with the patents-in-suit, it seems unlikely
`that Finjan will be able to drum up specific allegations about Juniper’s pre-suit knowledge of
`the patents-in-suit. Nevertheless, Finjan may move for leave to file an amended complaint by
`FEBRUARY 22 AT NOON. Any such motion should include as an exhibit a redlined version of
`the proposed amendment that clearly identifies all changes from the complaint. This order
`highlights certain deficiencies in the complaint, but it will not necessarily be enough to add a
`sentence parroting each missing item identified herein. For example, the proposed amendment
`should take care to address the other criticisms raised by Juniper but not reached in this order.
`If Finjan moves for leave to file an amended complaint, it should be sure to plead its best case.
`CONCLUSION
`To the foregoing extent, defendant’s motion to dismiss is GRANTED. Plaintiff’s claims
`of willfulness and induced infringement are DISMISSED. Plaintiff may move for leave to file an
`amended complaint, subject to the conditions stated herein, by FEBRUARY 22 AT NOON. As
`stated on the record at the motion hearing, defendant may promptly take depositions in advance
`of plaintiff’s motion for leave in order to test the validity of any new allegations added therein.
`
`IT IS SO ORDERED.
`
`Dated: February 14, 2018.
`
`
`WILLIAM ALSUP
`UNITED STATES DISTRICT JUDGE
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