`
` Volume 2
`
` Pages 198 - 397
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`BEFORE THE HONORABLE WILLIAM H. ALSUP, JUDGE
`
`)
`FINJAN, INC.,
` )
` Plaintiff, )
` )
` VS. ) No. C 17-5659 WHA
` )
`JUNIPER NETWORKS, INC.,
`)
` )
` Defendant.
`)
` ) San Francisco, California
` Tuesday, December 11, 2018
`
`
`TRANSCRIPT OF PROCEEDINGS
`
`
`APPEARANCES:
`
`For Plaintiff: KRAMER, LEVIN, NAFTALIS & FRANKEL LLP
` 990 Marsh Road
` Menlo Park, California 94025
` BY: PAUL J. ANDRE, ESQ.
` LISA KOBIALKA, ESQ.
` JAMES HANNAH, ESQ.
`
` KRAMER LEVIN NAFTALIS AND FRANKEL LLP
` 1177 Avenue of the Americas
` New York, New York 10036
` BY: CRISTINA LYNN MARTINEZ, ESQ.
`
`
`(Appearances continued on next page)
`
`
`
`
`Reported By: Katherine Powell Sullivan, CSR No. 5812, RMR, CRR
` Jo Ann Bryce, CSR No. 3321, RMR, CRR
` Official Reporters
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 2 of 201
`
`APPEARANCES (CONTINUED):
`
`For Defendant: IRELL & MANELLA LLP
` 1800 Avenue of the Stars, Suite 900
` Los Angeles, California 90067-4276
` BY: JONATHAN S. KAGAN, ESQ.
` ALAN J. HEINRICH, ESQ.
` JOSHUA GLUCOFT, ESQ.
` CASEY CURRAN, ESQ.
`
` IRELL & MANELLA LLP
` 840 Newport Center Drive, Suite 400
` Newport Beach, California 92660
` BY: REBECCA CARSON, ESQ.
`
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 3 of 201
`
` 200
`
`I N D E X
`
`
`Tuesday, December 11, 2018 - Volume 2
`
`PLAINTIFF'S WITNESSES PAGE VOL.
`
`BIMS, HARRY (RECALLED)
`(PREVIOUSLY SWORN)
`Direct Examination resumed by Mr. Andre
`Cross-Examination by Mr. Kagan
`Redirect Examination by Mr. Andre
`
`HARTSTEIN, PHILIP
`(SWORN)
`Direct Examination by Ms. Kobialka
`Cross-Examination by Ms. Carson
`Redirect Examination by Ms. Kobialka
`
`KROLL, DAVID
`(SWORN)
`Direct Examination by Mr. Hannah
`Cross-Examination by Mr. Heinrich
`Redirect Examination by Mr. Hannah
`
`NAGARAJAN, CHANDRA
`By Videotaped Deposition
`
`COLE, ERIC
`(SWORN)
`Direct Examination by Mr. Andre
`
`337
`338
`347
`359
`
`224
`225
`239
`242
`
`243
`244
`294
`324
`
`364
`
`367
`368
`
`2
`2
`2
`2
`
`2
`2
`2
`2
`
`2
`2
`2
`2
`
`2
`
`2
`2
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`1
`
`22
`
`23
`
`57
`
`74
`
`91
`
`338
`
`363
`
`363
`
`388
`
`391
`
`283
`
`279
`
`263
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 4 of 201
`Case 3:17-cv-05659—WHA Document 336 Filed 12/17/18 Page 4 of 201
`
`201
`
`I N D E X
`
`E X H I B I T S
`
`TRIAL EXHIBITS
`
`IDEN EVID VOL.
`
`384
`
`
`
` 201
`
`I N D E X
`
` E X H I B I T S
`
`
`TRIAL EXHIBITS IDEN EVID VOL.
`
`1
`
`22
`
`23
`
`57
`
`74
`
`91
`
`342
`
`372
`
`382
`
`
`338
`
`363
`
`363
`
`388
`
`391
`
`283
`
`279
`
`263
`
`384
`
`2
`
`2
`
`2
`
`2
`
`2
`
`2
`
`2
`
`2
`
`2
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 5 of 201
`
`PROCEEDINGS
`
` 202
`
`Tuesday - December 11, 2018
`
` 7:28 a.m.
`
`P R O C E E D I N G S
`
`---000---
`
`(Proceedings were heard out of the presence of the jury:)
`
`THE COURT: All right. Be seated.
`
`Okay. I want to first -- I tried very hard but could
`
`not -- I'm handing back to Juniper all of those depositions
`
`that you handed me yesterday. I can't believe that the lead
`
`partner on this case didn't look at this before you -- look at
`
`how -- look at some of those. Some of them are so blue.
`
`They're over -- the blue highlighting is so dark you cannot --
`
`it's, like, redacted. And I tried my best with my weak eyes at
`
`age 73 to read through the blue, and I could not. I finally
`
`gave up. You've got to resubmit it.
`
`The other thing that's wrong, this is less. Please tag
`
`every place that needs a ruling. There were no tags.
`
`MR. KAGAN: Your Honor, these had tags when we
`
`submitted them. I'm not sure --
`
`THE COURT: Well, they didn't. I didn't take any tags
`
`off.
`
`Did we take any tags off?
`
`THE LAW CLERK: Those were e-mailed Sunday so we
`
`printed them out.
`
`THE COURT: Well, where's the stack that you -- I
`
`didn't hear you. Come up here and tell me.
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 6 of 201
`
`PROCEEDINGS
`
` 203
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Now, see, you're getting my law clerk in trouble. You
`
`know that's going to be bad for you.
`
`(Pause in proceedings.)
`
`THE COURT: All right. So this stack right here, who
`
`gave me that stack?
`
`MR. KAGAN: This was from -- this was Finjan's
`
`submission, Your Honor.
`
`THE COURT: All right. Hand it to Finjan.
`
`MR. ANDRE: Your Honor, these --
`
`THE COURT: You're the one that's in trouble, and I'm
`
`telling you I could not read that dark blue. I tried very
`
`hard. I was almost going to give you an eye test to see if you
`
`could read it right now.
`
`All right. Now, that is impossible to read. So you've
`
`got to resubmit it.
`
`I did not -- I started trying to rule on them. I did make
`
`a few rulings, but I'm just going to start over with a fresh
`
`set.
`
`My basic idea is all of it comes into evidence, but I am
`
`not there yet. I should do my job and make rulings.
`
`All right. So there. That's -- all right. So I
`
`misunderstood.
`
`Here, I got a different stack that looked exactly the
`
`same. This one is from you and it does have the tags.
`
`All right. Now, let's see -- but I'm handing it back
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 7 of 201
`
`PROCEEDINGS
`
` 204
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`because it's got dark blue too. Please. So I was correct
`
`about the dark blue. I can't read through that. It can't be
`
`so dark that it's effectively redacted. It has to be a
`
`different color or something. I don't know, pink and yellow,
`
`light green, but not dark blue.
`
`Okay. That's enough on that subject.
`
`Next, I got motions overnight. I want you to know
`
`something. You can't just bombard me with miscellaneous,
`
`big-firm objections. And this is not a deposition. This is a
`
`trial and you are acting like a big firm sending me multiple
`
`motions overnight telling me to knock out their case. Well, I
`
`don't have much patience for that.
`
`That first one, Juniper's Objections to finjan's Request
`
`to Present the Deposition Testimony of Shlomo Touboul. All
`
`right. In very short order, tell me what your objection is.
`
`MR. KAGAN: So this is not a deposition that was taken
`
`in this case. This is a deposition of their inventor from a
`
`different case from 2015.
`
`THE COURT: Is he still associated with Finjan?
`
`MR. KAGAN: Yes, Your Honor.
`
`THE COURT: No way we're going to let that. You've
`
`got to bring him yourself. You can't get away with a
`
`deposition from some other case.
`
`MR. ANDRE: Your Honor --
`
`THE COURT: Bring him from -- he lives in Israel;
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 8 of 201
`
`PROCEEDINGS
`
` 205
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`right?
`
`MR. ANDRE: He lives in Israel.
`
`THE COURT: Bring him. He's your guy. He's your
`
`founder. He works for you. You can get him on an airplane and
`
`get him over here. You're not going to get away with doing
`
`that, no.
`
`MR. ANDRE: Your Honor, he has blood clot issues in
`
`his legs.
`
`THE COURT: Too bad. Too bad.
`
`MR. ANDRE: Okay.
`
`THE COURT: He's your guy trying to make millions of
`
`dollars off of this case.
`
`MR. ANDRE: Your Honor, he's not --
`
`THE COURT: That's what it is, and you're not going to
`
`get away with an in-the-can -- the key guy, an in-the-can
`
`presentation from some guy who deposed him in the year 2015 in
`
`a different case. That's beyond the pale. Motion granted.
`
`Next, Mathena, principal software engineer. Now, you
`
`claim he's not an agent and so forth.
`
`MR. KAGAN: He works -- we're hearing deposition read
`
`from his supervisor.
`
`THE COURT: All right. Let me ask you. Are you going
`
`to present him yourself?
`
`MR. KAGAN: No, Your Honor.
`
`THE COURT: Why don't you just subpoena the guy?
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 9 of 201
`
`PROCEEDINGS
`
` 206
`
`MR. ANDRE: Your Honor, we're actually -- we got this
`
`letter late last night as well. We're going to withdraw
`
`Mathena.
`
`THE COURT: Thank you.
`
`MR. ANDRE: So we'll make that move.
`
`THE COURT: Thank you.
`
`Scott Coonan.
`
`MR. ANDRE: We're not withdrawing that one.
`
`THE COURT: What?
`
`MR. ANDRE: We're not withdrawing that one.
`
`THE COURT: No, no. I'm either going to allow it --
`
`it's ridiculous for you to object to this. Either you bring
`
`Mr. Coonan in so that they can put him on the stand and do it
`
`through him, or I'm going to let him use the deposition.
`
`You're just trying to keep out that transcript where your
`
`guy did some bad things. No way.
`
`MR. KAGAN: That's not going to happen. We are
`
`presenting Mr. Coonan in our case-in-chief.
`
`THE COURT: No. Bring him so he can present him in
`
`his case-in-chief, or I'm going to let him use the deposition.
`
`MR. KAGAN: Okay. We'll make an election.
`
`THE COURT: You can use the deposition. You can use
`
`the deposition unless they supply you today with Mr. Coonan at
`
`your convenience when you want to call him.
`
`MR. ANDRE: Your Honor, he'll be for most likely
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 10 of 201
`
`PROCEEDINGS
`
` 207
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`tomorrow.
`
`THE COURT: All right. Then work it out. But if they
`
`don't bring him, you get to use the deposition.
`
`Next. Finjan's motion to seal because of -- no. No way
`
`we're going to do that. Those documents -- you're just
`
`trying -- Finjan wants to seal the courtroom and keep all these
`
`people out so that the rest of the world won't see what you're
`
`up to. No way. No way.
`
`MR. ANDRE: Your Honor, we're required to do that by
`
`agreement with the third party.
`
`THE COURT: Fine. You've tried. Denied.
`
`MR. ANDRE: Thank you.
`
`THE COURT: The public is going to see what Finjan is
`
`up to.
`
`Next, three, Finjan's Objections to Juniper's Exhibits for
`
`Late Disclosure. I don't know what this is even about. What
`
`is that motion about?
`
`MR. ANDRE: This is what is called the 282 disclosure.
`
`THE COURT: Yes?
`
`MR. ANDRE: They didn't make one.
`
`THE COURT: What do you mean 282?
`
`MR. ANDRE: 35 U.S.C. 282 requires a defendant in a
`
`patent case to disclose any prior art or state of the art
`
`references 30 days before trial. They just didn't make a
`
`disclosure.
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 11 of 201
`
`PROCEEDINGS
`
` 208
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`We didn't think they were going to bring in prior art
`
`because validity is not in the case.
`
`THE COURT: Well, then how do you get around that?
`
`MR. HEINRICH: Well, we made multiple disclosures in
`
`this case, Your Honor.
`
`THE COURT: Did you do it within 30 days?
`
`MR. HEINRICH: Absolutely. We did invalidity
`
`contentions in this case.
`
`THE COURT: No. I mean, earlier than 30 days.
`
`MR. HEINRICH: Yes. Earlier than 30 days we did
`
`invalidity contentions back in April. We did an opening expert
`
`report in September.
`
`THE COURT: Did you disclose the specific prior art?
`
`MR. HEINRICH: Absolutely.
`
`THE COURT: Well, then, Mr. Andre, what are you
`
`talking about?
`
`MR. ANDRE: Your Honor, under 35 U.S.C. 282, giving
`
`discovery responses is not enough. You have to go in and give
`
`very specific disclosures. When I do defense work, this is
`
`something on my calendar every single time.
`
`Now, we didn't think they would be using any prior art or
`
`state of the art because that's not in the case; but yesterday
`
`they disclosed a bunch of prior art exhibits, and so --
`
`THE COURT: All right. Is this coming up for their
`
`case?
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 12 of 201
`
`PROCEEDINGS
`
`MR. ANDRE: Their case.
`
`THE COURT: I've got a little bit of time on this
`
` 209
`
`then.
`
`MR. ANDRE: Yes.
`
`THE COURT: Is it true that the law requires a
`
`specific disclosure?
`
`MR. HEINRICH: No. In fact, the law is the opposite.
`
`282 says it has to be in pleadings or otherwise in writing.
`
`There's a Federal Circuit case, Eaton v. Appliance Valves.
`
`It's 790 Fed. 2d 874 from the Federal Circuit. And that case
`
`says that the purpose of this is to avoid unfair surprise.
`
`It's not a formalistic requirement.
`
`THE COURT: But did that decision allow somebody to
`
`get away with doing it the way you did it?
`
`MR. HEINRICH: Well, it was much -- they did much less
`
`in that case, Your Honor. They --
`
`THE COURT: All right. Stop. What's the name of that
`
`decision?
`
`MR. HEINRICH: All right Eaton v. Appliance Valves.
`
`THE COURT: What do you say to Eaton?
`
`MR. ANDRE: Your Honor, I'm not familiar with that
`
`case. We cited the case in our letter we sent to you, a
`
`Federal Circuit case, that said just the opposite. So I'd have
`
`to go back and look at Eaton. They didn't give us that case
`
`last night.
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 13 of 201
`
`PROCEEDINGS
`
` 210
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`It's not going to be up until tomorrow or the next day,
`
`so --
`
`THE COURT: Well, okay. You need by 5:00 p.m.
`
`today -- look at all these lawyers. By 5:00 p.m. today, one of
`
`these lawyers will submit a three-page brief on this subject,
`
`both sides, by 5:00 p.m. today.
`
`Next. I want to go over this. I sent out something that
`
`I'm concerned about this issue of apportionment. How does
`
`it -- I understand the Blue Coat decision, I think, but how
`
`does it work?
`
`It does make some statement. I'll read you the statement.
`
`This is the Federal Circuit talking (reading):
`
`"In such cases" -- this is a quote now. "In such
`
`cases the patentee must," quote, "give evidence tending to
`
`separate or apportion the infringer's profits and the
`
`patentee's damages between the patented features and the
`
`unpatented features and such evidence must be reliable and
`
`tangible and not conjectural or speculative."
`
`And that's citing to some case called Garretson versus
`
`Clark, U.S. Supreme Court 1884. Now, I just love it when they
`
`can find something that old. That's good. That's good. I
`
`wish we could go back to those simpler days, but here we are.
`
`They got it.
`
`Okay. (reading)
`
`"Finjan as the" -- this is your -- it was against you.
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 14 of 201
`
`PROCEEDINGS
`
` 211
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`"Finjan as the present patent holder had the burden of
`
`proving damages by a preponderance of the evidence."
`
`Now, I haven't had this -- I've thought about this problem
`
`in the past but it's been a few months or years. Who has the
`
`burden of showing what the unpatented features are of an
`
`accused device?
`
`MR. ANDRE: Your Honor, I think that would be the
`
`patentee's burden. I think it's our burden, and what we're
`
`doing is --
`
`THE COURT: You haven't done that.
`
`MR. ANDRE: Well, we haven't -- we're just presenting
`
`our damages case and we're going to put a fact-based case on.
`
`And what we have -- and I'll just take a step back.
`
`I actually argued the Finjan/Blue Coat case at the
`
`Federal Circuit so I got --
`
`THE COURT: You got your head handed to you.
`
`MR. ANDRE: Just on that issue. I won everything
`
`else.
`
`THE COURT: Okay. Okay, yeah. Sorry. Good lawyers
`
`win some and they lose some, otherwise they wouldn't be any
`
`good because they can't bat 1,000.
`
`All right. Go ahead.
`
`MR. ANDRE: All right. So in that case I argued that
`
`what they called the DRTR was the small sellable unit;
`
`therefore, we get 100 percent of --
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 15 of 201
`
`PROCEEDINGS
`
` 212
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`THE COURT: Don't tell me about that case. I'll never
`
`get it. Just tell me, do you have the burden to show the
`
`unpatented features and then show the patented features and
`
`then apportion between them?
`
`MR. ANDRE: Yes. And so what we're doing in this case
`
`is we're doing that.
`
`THE COURT: How are you going to do that without an
`
`expert?
`
`MR. ANDRE: Well, we have their corporate
`
`representative.
`
`THE COURT: Who?
`
`MR. ANDRE: The corporate representative, 30(b)(6)
`
`witness --
`
`THE COURT: Yeah.
`
`MR. ANDRE: -- who went in and said that all the files
`
`that come into Sky ATP, only 40 percent of them get processed
`
`through the infringing components. So only 40 percent of all
`
`files.
`
`So we've already apportioned down to the -- what the
`
`Federal Circuit says the infringing and noninfringing uses. So
`
`the 60 percent is noninfringing. They do other things. They
`
`do antivirus. They do geolocation, whatever else.
`
`But 40 percent of the files come in. We have this
`
`right -- they actually ran a test. The 30(b)(6) witness ran a
`
`test and said only 40 percent of the files coming into Sky ATP
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 16 of 201
`
`PROCEEDINGS
`
` 213
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`is the infringing use, the one that gets scanned and stored in
`
`the database.
`
`So we've already apportioned down to what the
`
`Federal Circuit says the infringing and noninfringing
`
`functions. The noninfringing functions would be the antivirus,
`
`for example.
`
`THE COURT: It didn't say "functions." It says
`
`"features."
`
`MR. ANDRE: Yeah. Also in the next paragraph when you
`
`talk about the DRTR after the WebPulse, it says (reading):
`
`"DRTR, which stands for ratings as part of WebPulse,
`
`and it performs both infringing and noninfringing
`
`functions."
`
`THE COURT: Where do you see the word "functions"?
`
`MR. ANDRE: It's the paragraph right here
`
`(indicating). It's right up here (indicating). It starts with
`
`"DRTR, which stands for..."
`
`THE COURT: Yeah.
`
`MR. ANDRE: At the end of that first sentence "both
`
`infringing and noninfringing functions."
`
`(Pause in proceedings.)
`
`THE COURT: All right. I see the word "functions" in
`
`that paragraph. Hold that thought.
`
`All right. What does the other side say about what I just
`
`heard?
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 17 of 201
`
`PROCEEDINGS
`
` 214
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`MR. HEINRICH: So there's a different and profound
`
`apportionment problem here. There are two components in the
`
`$1.8 million damages base that we've been referring to. There
`
`are the Sky ATP license revenues, which are just $550,000.
`
`That's -- you know, if the 40 percent applies to anything, it
`
`would apply to that.
`
`But then we also included in the damages base 100 percent
`
`of the revenues of every SRX device that was enabled to use --
`
`THE COURT: You said that's what you did?
`
`MR. HEINRICH: Well, every --
`
`THE COURT: You said "we." You said "we."
`
`MR. HEINRICH: So, yeah. In the $1.8 million -- so
`
`Juniper included the revenues of the -- 100 percent of the
`
`revenues of every SRX device that was enabled for use with
`
`Sky ATP. That's 1.25 million.
`
`So of that 1.25 million, that covers all of the
`
`functionalities of an SRX. It uses a router. It uses a
`
`firewall. Substantial uses, the vast majority of which have
`
`absolutely nothing at all to do with Sky ATP.
`
`THE COURT: Perhaps that's right, but if you yourself
`
`have included it all in the damages base -- I guess it's the
`
`damages base -- then why do you even have a grievance? Why
`
`can't they do the same thing?
`
`MR. HEINRICH: Well, you have to apportion. They have
`
`the burden to apportion those revenues.
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 18 of 201
`
`PROCEEDINGS
`
` 215
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`THE COURT: Did you apportion it?
`
`MR. HEINRICH: So our expert, he looked at various
`
`value indicators and he came up with his $100,000 royalty, but
`
`their burden is to --
`
`THE COURT: But did you apportion it?
`
`MR. HEINRICH: So Dr. Ugone apportioned it
`
`differently.
`
`THE COURT: How did he do that?
`
`MR. HEINRICH: He looked at multiple value indicators;
`
`for example, Juniper's noninfringing alternatives. He looked
`
`at Finjan licenses. And those value indicators all pointed to
`
`a reasonable royalty in the range of $100,000.
`
`But the important thing here is that the revenues
`
`associated with SRXs, those revenues, it's their burden to
`
`apportion those revenues; and they can't do that because the
`
`SRX used as a firewall, used as a router, that's the main
`
`99 percent use case of these devices, and they have no evidence
`
`at all to do anything with SRX revenues.
`
`So the 40 percent that we just heard, that would be
`
`40 percent of 550,000. So, then, that would make this case
`
`about, like, a $200,000 damages base.
`
`THE COURT: Well, you know, there was a time in my
`
`life when that wasn't worth fighting over. I am not saying you
`
`can't -- people go to trial over -- you know, when I was a
`
`teenager, there was a case that got all the way to the
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 19 of 201
`
`PROCEEDINGS
`
` 216
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`Supreme Court over one cent. It was a postage due. The
`
`government put a one cent postage due and refused to deliver so
`
`the guy had to pay the one cent and he sued. And the U.S.
`
`Supreme Court hated the Post Office so much, they took the case
`
`and ruled for the one guy and gave him his one cent back.
`
`So if Finjan wants to fight over $100,000, God bless them.
`
`It's okay.
`
`MR. HEINRICH: So I totally agree, but they should not
`
`get to put on a damages case that has anything at all to do
`
`with SRX revenues because they have zero evidence to apportion
`
`those revenues.
`
`THE COURT: Oh, I'm going to -- all right. No, I'm
`
`not sure yet. You may be right but you may be wrong, and I
`
`think the safe thing is for me to at least hear -- I'm going to
`
`at least hear the plaintiff's case and then I'm going to decide
`
`if it's sufficiently apportioned. I'm going to consider that
`
`question then.
`
`But you've helped me on the point that bothered me the
`
`most, which is the way I read it, which I agree with you, this
`
`is the way I probably would have read this is that you have the
`
`burden to apportion in some not just rational way, something
`
`that meets the standard of the Blue Coat decision.
`
`MR. ANDRE: Your Honor, we will do so.
`
`THE COURT: All right. I will -- that's yet to be
`
`determined, but we will see.
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 20 of 201
`
`PROCEEDINGS
`
` 217
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`All right. Now, I have more questions.
`
`All right. I've covered everything on my list.
`
`All right. Do you have anything to bring up?
`
`MR. ANDRE: A couple housekeeping matters from our
`
`point, Your Honor. One is, you said at the pretrial conference
`
`if the parties agreed to hand in the witnesses' witness
`
`binders, we could do so. The parties have stipulated to that.
`
`I just wanted to give Your Honor a heads-up. We talked to the
`
`clerk.
`
`THE COURT: All right. But you should be aware --
`
`that's fine. You should be aware that whatever goes into
`
`evidence is what Tracy, my courtroom deputy, has got; and if
`
`there is a glitch and she has something in her stack that turns
`
`out to be what you didn't understand, too bad. It's strict
`
`liability. Whatever Tracy has, if Exhibit 17 goes into
`
`evidence, whatever she has with 17 on it goes into the jury
`
`room whether you think you were tricked or not.
`
`It's your burden to check these and I'm telling you, the
`
`lawyers in other cases just like those redactions, just like
`
`those highlighting that you gave me, they're impossible to
`
`read, somebody on somebody's team will make a mistake and then
`
`you'll be trying to get -- I will not bail you out. It's
`
`strict liability. Once Tracy's got it, that's it.
`
`Fine. So you can use your notebooks.
`
`MR. ANDRE: The second --
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 21 of 201
`
`PROCEEDINGS
`
` 218
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`THE COURT: You're both taking a risk. I guess it's
`
`fair.
`
`MR. ANDRE: The second issue is the procedure you
`
`would like us to use for the depositions that we do play --
`
`there are some that will be played today and possibly
`
`tomorrow -- how you would like that to go into evidence. The
`
`transcript itself, do you want us to submit a written
`
`transcript?
`
`THE COURT: All right. That's a very good question,
`
`and here's the only practical way to do this. First, the court
`
`reporter does not take it down. The court reporter takes down
`
`spoken words here, not things that are played, not recordings.
`
`You-all understand that. So it will be a blank spot. It will
`
`just say "Recording Played."
`
`So the only way the Court of Appeals can see or the jury
`
`can see it again is that you have to have a disc of what was
`
`shown to the jury, and then that disc gets marked as an exhibit
`
`that you both vet and then you give it to Tracy and that
`
`becomes part of the clerk's record. So I have to trust you to
`
`do it exactly right. So it's not going to be a transcript. It
`
`will be the video.
`
`MR. ANDRE: Okay. Thank you, Your Honor.
`
`MS. CARSON: Your Honor, just two issues with two
`
`demonstratives for witnesses today. So plaintiff disclosed for
`
`Mr. Hartstein Demonstrative Number 2. It appears to be a
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 22 of 201
`
`PROCEEDINGS
`
` 219
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`photograph of a flyer that was not produced or put on the
`
`exhibit list, so we object to that as late disclosure.
`
`THE COURT: Well, wait a minute. Was this
`
`demonstrative attached to his report?
`
`MS. CARSON: He's not an expert, sir.
`
`THE COURT: Then who is he?
`
`MS. CARSON: He's their CEO. So it's a -- it appears
`
`to be a photograph of a document that was not produced during
`
`discovery.
`
`THE COURT: May I see it, please? Who are you again?
`
`MS. MARTINEZ: I'm Cristina Martinez, Your Honor.
`
`THE COURT: Are you a lawyer?
`
`MS. MARTINEZ: I am, yes.
`
`THE COURT: Okay. I don't get it. What's the --
`
`MS. MARTINEZ: So, Your Honor, this is just a
`
`demonstrative of one of Finjan's product offings. And it's not
`
`being introduced into evidence. This was actually -- it's just
`
`a blowup of a demonstrative that they had in their office.
`
`THE COURT: "They" being the other side?
`
`MS. MARTINEZ: Being Finjan.
`
`And we disclosed it as a demonstrative board on Saturday
`
`morning, a large board. We sent a picture over. We didn't get
`
`any objection. It's actually right here (indicating). And
`
`there was no objection to the demonstrative, and what we did
`
`for Mr. Hartstein was we just shrunk that to a smaller version
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 23 of 201
`
`PROCEEDINGS
`
` 220
`
`so that it could be shown electronically to the jury as well so
`
`that to the extent we need to zoom in at all.
`
`THE COURT: Well, okay. But what is the basic point
`
`that you're trying to make with this?
`
`MS. MARTINEZ: This is just to show the product
`
`offering of --
`
`THE COURT: Whose product?
`
`MS. MARTINEZ: Of Finjan.
`
`THE COURT: Your own product?
`
`MS. MARTINEZ: Correct.
`
`THE COURT: And the purpose for that is to show that
`
`you're a real company that has real products as opposed to an
`
`NPE; right?
`
`MS. MARTINEZ: Yes. Correct, Your Honor. And there's
`
`also information about the product and then also the patent is
`
`here at the bottom as well.
`
`THE COURT: You mean Finjan sells that product down
`
`there?
`
`MS. MARTINEZ: Yes. This is their --
`
`THE COURT: It looks like you sell your own phone.
`
`MS. MARTINEZ: Not the phone, Your Honor. It's an
`
`actual app. It's an app for your phone. So it's their
`
`VitalSecurity app.
`
`THE COURT: I see.
`
`MS. CARSON: Your Honor, it appears on the bottom that
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 24 of 201
`
`PROCEEDINGS
`
` 221
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`there is some marking, and we requested evidence of marking of
`
`the product during discovery. They never produced this during
`
`discovery. They never put it on their exhibit list. They just
`
`put it on a poster board, and we don't think that's
`
`appropriate.
`
`THE COURT: But wait. What does it show about
`
`marking? I don't get it.
`
`MS. CARSON: So at the very bottom in fine print the
`
`patent number appears.
`
`THE COURT: I don't see anything. My eyesight --
`
`here, draw a circle around what you want me to look at on that
`
`document.
`
`(Attorney complying.)
`
`THE COURT: You can read that? I can't read it.
`
`MS. MARTINEZ: That's why we put it on the board,
`
`Your Honor; and the purpose of having disclosed this in a
`
`smaller version is that if it's shown to the jury, we can --
`
`THE COURT: Are you going to be trying to use this to
`
`show that there was marking?
`
`MS. MARTINEZ: Yes, Your Honor.
`
`THE COURT: Well, that should have been turned over to
`
`them. This is not demonstrative. This is being used as actual
`
`proof; and then in the closing argument you're going to be
`
`saying "We showed you the demonstrative" but it won't be in
`
`evidence. A demonstrative doesn't come into evidence.
`
`
`
`Case 3:17-cv-05659-WHA Document 336 Filed 12/17/18 Page 25 of 201
`
`PROCEEDINGS
`
` 222
`
` 1
`
` 2
`
` 3
`
` 4
`
` 5
`
` 6
`
` 7
`
` 8
`
` 9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`MS. MARTINEZ: Correct, Your Honor. We have other
`
`documents as well that do show the markings. So this is just,
`
`you know, a further -- further evidence.
`
`THE COURT: No. You're not going to be allowed to use
`
`something for substantive proof that you didn't disclose in
`
`response to their -- well, you should have put it in your
`
`initial disclosures. You should have --
`
`Did you ask for it in a document request?
`
`MS. CARSON: We did and also in an interrogatory.
`
`THE COURT: Did they?
`
`MS. MARTINEZ: They did, Your Honor.
`
`THE COURT: Well, then, you should have produced this
`
`document in response and you did not.
`
`Now, I'm sure they are guilty of this too. So before the
`
`trial is over, you'll get to say, "Remember, Judge, you
`
`excluded this document." And then they will be coming up with
`
`lame excuses trying to figure out a way around that.
`
`But, remember, this is going to work against you too.
`
`Okay. The Juniper people win on that one.
`
`MS. CARSON: There's one more as well. It's a
`
`demonstrative to their expert's testimony, also Demonstrative
`
`Number 2, and it was not disclosed with expert reports. We
`
`request that that be excluded as well.
`
`THE COURT: All right. What do you say to that one?
`
`MR. ANDRE: Your Honor, it's a video of the CNM Web
`
`
`
`Case 3:17