Case 3:17-cv-05659-WHA Document 305-3 Filed 12/08/18 Page 1 of 5
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`Exhibit 2
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`Case 3:17-cv-05659-WHA Document 305-3 Filed 12/08/18 Page 2 of 5
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`·1· · · · · · IN THE UNITED STATES DISTRICT COURT
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`·2· · · · · FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`·3· · · · · · · · · ·SAN FRANCISCO DIVISION
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`·4
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`·5· ·FINJAN, INC., a Delaware· ·)
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`·6· ·Corporation,· · · · · · · ·) Case No.
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`·7· · · · · · · · Plaintiff,· · ) 3:17-cv-05659-WHA
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`·8· · · · vs.· · · · · · · · · ·)
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`·9· ·JUNIPER NETWORKS, INC., a· )
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`10· ·Delaware Corporation,· · · )
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`11· · · · · · · · Defendant.· · ) (Pages 1-326)
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`12· ·---------------------------)
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`13· · · · · · · · ·THIS TRANSCRIPT IS DEEMED
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`14· · · · · · · · · · HIGHLY CONFIDENTIAL
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`15· · · · · · · ·OUTSIDE ATTORNEYS' EYES ONLY
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`16
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`17· · · · · · · · ·REPORTER'S TRANSCRIPTION
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`18· · · · · · · OF THE VIDEOTAPED DEPOSITION OF
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`19· · · · · · · · · · · ·JOHN GARLAND
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`20· · · · · · · · · FRIDAY, NOVEMBER 2, 2018
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`22
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`23· ·TRANSCRIBED BY:
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`24· · · · · · · · · ·SUSAN NELSON
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`25· · · · · · · · · ·C.S.R. No. 3202
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`Case 3:17-cv-05659-WHA Document 305-3 Filed 12/08/18 Page 3 of 5
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`Page 82
`·1· · · · Q.· And that starts with the date of notice and
`·2· ·continues until five years after the expected date of
`·3· ·execution of a license.· Is that correct?
`·4· · · · · · MR. KASTENS:· Objection.· Form.
`·5· · · · · · THE WITNESS:· Yes.
`·6· ·BY MR. KAGAN:
`·7· · · · Q.· And Finjan will make an estimate of
`·8· ·projection of what the revenues will be during that
`·9· ·time period.· Is that correct?
`10· · · · · · MR. KASTENS:· Objection.· Form.
`11· · · · · · THE WITNESS:· Yeah, it's the impact of
`12· ·products, yes.
`13· ·BY MR. KAGAN:
`14· · · · Q.· And then it will apply a rate of 8 percent
`15· ·for hardware or 16 percent of software to those
`16· ·affected revenues during that time period.
`17· · · · · · Is that correct?
`18· · · · A.· Correct.
`19· · · · · · MR. KASTENS:· Objection.· Form.
`20· ·BY MR. KAGAN:
`21· · · · Q.· I'm sorry?
`22· · · · A.· Correct.
`23· · · · Q.· And that is the opening offer that Finjan
`24· ·will make in negotiations with prospective licensees?
`25· · · · A.· Yes.
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`Page 83
`·1· · · · Q.· Is the license that Finjan offers in those
`·2· ·circumstances a perpetual license, or does it only go
`·3· ·for the -- till five years after the date of the
`·4· ·execution of the agreement?
`·5· · · · A.· It's open for negotiation.· They could put a
`·6· ·term in place.· We could make it a paid-up license.
`·7· ·We've -- we don't dictate which way it has to be.
`·8· ·We're open for -- every negotiation we start, we're
`·9· ·open for discussion and communication.
`10· · · · Q.· Is Finjan transparent with its prospective
`11· ·licensees about the approach it takes to licensing
`12· ·negotiations?· Strike that.
`13· · · · · · MR. KASTENS:· Objection.
`14· ·BY MR. KAGAN:
`15· · · · Q.· Strike that.
`16· · · · · · Does Finjan explain to its licensees that
`17· ·this is the process it uses to come up with its
`18· ·opening offer?
`19· · · · · · MR. KASTENS:· Objection.· Form.
`20· · · · · · THE WITNESS:· Yes.
`21· ·BY MR. KAGAN:
`22· · · · Q.· And does Finjan explain that this is a
`23· ·consistent approach that it takes with all licensees?
`24· · · · · · MR. KASTENS:· Objection.· Form.
`25· · · · · · THE WITNESS:· Yes.
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`Page 84
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`·1· ·BY MR. KAGAN:
`·2· · · · Q.· Do you think the industry is aware that this
`·3· ·is the consistent approach that Finjan takes with its
`·4· ·licensees?
`·5· · · · · · MR. KASTENS:· Objection.· Form.
`·6· · · · · · THE WITNESS:· I don't know how to answer
`·7· ·that.
`·8· ·BY MR. KAGAN:
`·9· · · · Q.· Has Finjan ever had an occasion where the
`10· ·licensees simply accepted the opening offer of
`11· ·Finjan?
`12· · · · A.· I don't recall that ever happening in my
`13· ·25-year career, but, no, I don't.· I'm -- speaking
`14· ·for Finjan, I don't think -- I -- in the negotiations
`15· ·I've been in, I don't think so.
`16· · · · Q.· So this is an opening offer that Finjan
`17· ·makes in its discussions with licensees.
`18· · · · · · Is that correct?
`19· · · · A.· It's not being offered, but it's not padded
`20· ·or any way.· I mean it's basically a straight-up
`21· ·calculation.
`22· · · · Q.· The licensees generally have some type of
`23· ·counteroffer that they make to Finjan.
`24· · · · · · Is that right?
`25· · · · A.· Some, yes.
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`Page 85
`·1· · · · Q.· And right now, I'm talking about the cases
`·2· ·where you actually enter into a license agreement.
`·3· · · · A.· Okay, yes.
`·4· · · · Q.· In cases where you don't agree --
`·5· · · · A.· Yeah.
`·6· · · · Q.· -- obviously, you don't reach agreement.
`·7· ·But I'm still focused on situations where Finjan
`·8· ·actually enters into a license agreement.
`·9· · · · · · So Finjan makes the opening offer that you
`10· ·described.· Is that correct?
`11· · · · · · MR. KASTENS:· Objection.· Form.
`12· · · · · · THE WITNESS:· Yes.
`13· ·BY MR. KAGAN:
`14· · · · Q.· And the licensee will, in those cases, come
`15· ·back with some type of counteroffer that's lower than
`16· ·the number Finjan had proposed.· Is that right?
`17· · · · · · MR. KASTENS:· Objection.· Form.
`18· · · · · · THE WITNESS:· Generally.· Yes.
`19· ·BY MR. KAGAN:
`20· · · · Q.· And you usually end up somewhere between
`21· ·Finjan's opening number and the licensees's opening
`22· ·number.· Is that right?
`23· · · · · · MR. KASTENS:· Objection.· Form.
`24· · · · · · THE WITNESS:· They usually try to negotiate,
`25· ·yes.
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`Case 3:17-cv-05659-WHA Document 305-3 Filed 12/08/18 Page 4 of 5
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`Page 110
`·1· ·negotiation back and forth the numbers agreed upon,
`·2· ·but it could be -- there's been installments and
`·3· ·other structures.
`·4· · · · · · We have looked at and proposed, you know,
`·5· ·when they're -- when we're in the negotiation,
`·6· ·proposed other things in terms of per scans, a number
`·7· ·of threats that are identified on a per-year basis,
`·8· ·the number of users, percentage of top line revenue.
`·9· · · · · · I mean, and we're -- we're flexible and
`10· ·open.· It's -- it's not like we're requiring parties
`11· ·to do it.· A lot of companies just like finality of
`12· ·it.· I don't know if it's driven by the finance
`13· ·organization or not, but just like to know that, you
`14· ·know, there's -- if there's a payment, what the
`15· ·payment amount is and when it will be made as
`16· ·scheduled.
`17· ·BY MR. KAGAN:
`18· · · · Q.· So is it fair to say that the -- your
`19· ·initial offer of 8 percent or 16 percent will often
`20· ·yield to a different structure during the
`21· ·negotiations?
`22· · · · · · MR. KASTENS:· Objection.· Form.
`23· · · · · · THE WITNESS:· It's not clear whether it
`24· ·leads to another structure or not.
`25· ·BY MR. KAGAN:
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`Page 111
`·1· · · · Q.· So you -- you mentioned that you -- that --
`·2· ·strike that.
`·3· · · · · · You mentioned that Finjan consistently
`·4· ·starts with an offer based on royalty rates of
`·5· ·8 percent and 16 percent and projections based on a
`·6· ·certain period of time.· Correct?
`·7· · · · A.· Correct.
`·8· · · · · · MR. KASTENS:· Objection.· Form.
`·9· · · · · · THE WITNESS:· Sorry.
`10· · · · · · Correct.
`11· ·BY MR. KAGAN:
`12· · · · Q.· And then you indicated that there -- Finjan
`13· ·has considered other structures as well, such as per
`14· ·scan or per user royalty.· Is that right?
`15· · · · A.· Yes.
`16· · · · Q.· When Finjan has considered another
`17· ·structure, is that the result of discussions between
`18· ·Finjan and the potential licensee?
`19· · · · · · MR. KASTENS:· Objection.· Form.
`20· · · · · · THE WITNESS:· Yes.
`21· ·BY MR. KAGAN:
`22· · · · Q.· Is it -- strike that.
`23· · · · · · Have any of Finjan's licensees taken a
`24· ·license based on a per-user rate?
`25· · · · A.· No.
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`Page 112
`·1· · · · Q.· Have any of Finjan's licensees taken a
`·2· ·license on the basis of a per-scan rate?
`·3· · · · · · MR. KASTENS:· Objection.· Form.
`·4· · · · · · THE WITNESS:· No.
`·5· ·BY MR. KAGAN:
`·6· · · · Q.· So these were items which we discussed,
`·7· ·but --
`·8· · · · A.· Yeah, these are explored because, you know,
`·9· ·if -- if we're at -- you know, if there's a gap
`10· ·between the way the two parties are seeing it, it's
`11· ·just -- it's just, is there another way we can look
`12· ·at this that maybe brings us closer together.
`13· ·BY MR. KAGAN:
`14· · · · Q.· Finjan has never made an opening offer based
`15· ·on a per-user rate.· Is that correct?
`16· · · · · · MR. KASTENS:· Objection.· Form.
`17· · · · · · THE WITNESS:· I haven't, but I don't -- I
`18· ·don't like the word "never," so.
`19· ·BY MR. KAGAN:
`20· · · · Q.· Fair enough.· You're not aware of any
`21· ·negotiation where Finjan started the negotiation by
`22· ·asking for a per-user rate.· Is that correct?
`23· · · · · · MR. KASTENS:· Objection.· Form.
`24· · · · · · THE WITNESS:· I haven't asked that specific
`25· ·question, so I don't know.· I -- I -- just not -- I'm
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`Page 113
`·1· ·not aware, but it doesn't mean that it hasn't
`·2· ·occurred.
`·3· ·BY MR. KAGAN:
`·4· · · · Q.· I -- I know.· This is one of the limitations
`·5· ·of a deposition.· Finjan's put you forward and said
`·6· ·this is the guy who can answer the questions.
`·7· · · · A.· That's fine.
`·8· · · · Q.· You've got to answer to the best of your
`·9· ·ability, but I -- you know, I -- I have to get
`10· ·whatever information you have.
`11· · · · A.· I understand.
`12· · · · Q.· So, you know, if you are aware of Finjan
`13· ·opening a negotiation by asking for a per-user rate,
`14· ·I have a right to know that.
`15· · · · A.· Yes.
`16· · · · Q.· But if you don't, that's okay.· It's just
`17· ·how the depositions work.
`18· · · · A.· I understand.
`19· · · · Q.· Are you aware of Finjan opening a
`20· ·negotiation by asking for a per-scan rate?
`21· · · · · · MR. KASTENS:· Objection.· Form.
`22· · · · · · THE WITNESS:· Same answer.· I'm not aware,
`23· ·but I haven't asked this question.
`24· ·BY MR. KAGAN:
`25· · · · Q.· You mentioned that Finjan is currently
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`Case 3:17-cv-05659-WHA Document 305-3 Filed 12/08/18 Page 5 of 5
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`·1· ·STATE OF CALIFORNIA· ·)
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`·2· ·COUNTY OF LOS ANGELES )· ss.
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`Page 326
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`·3· · · · · · I, SUSAN NELSON, C.S.R. 3202, in and for the
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`·4· ·State of California, do hereby certify:
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`·5· · · · · · That said videotaped recording was taken
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`·6· ·down and transcribed by me stenographically, to the
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`·7· ·best of my ability, and the same is a true, correct
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`·8· ·and complete transcription of said videotaped
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`·9· ·recording;
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`10· · · · · · I further certify that I am not interested
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`11· ·in the event of the action.
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`17· · · · · · Witness my hand this 7th day of December,
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`18· ·2018.
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`· · · · · · · · · ______________________________
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`20· · · · · · · · Susan Nelson, C.S.R. No. 3202
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`· · · · · · · · · Certified Shorthand Reporter
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`21· · · · · · · · State of California
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