Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 1 of 6
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`I R E L L & M A N E L L A L L P
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`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
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`J G l u c o f t @ i r e l l . c o m
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`June 20, 2019
`
`
`
`
`
`Honorable Thomas S. Hixson
`U.S. District Court Magistrate Judge
`
`
`Re:
`
`Finjan, Inc. v. Juniper Networks, Inc.,
`Case No. 3:17-cv-05659-WHA (N.D. Cal.)
`
`
`Dear Judge Hixson:
`The parties present this joint statement regarding defendant Juniper Networks, Inc.’s
`(“Juniper”) motion to compel production of documents related to Trustwave Holdings, Inc.
`(“Trustwave”). Counsel for Juniper and counsel for Finjan attest that they have met and conferred
`by telephone1 in good faith to resolve this dispute prior to filing this letter.
`
`
`Respectfully submitted,
`
` /s/ Joshua Glucoft____
`Joshua Glucoft
`IRELL & MANELLA LLP
`Attorneys for Defendant
`Juniper Networks, Inc.
`
`
`
`/s/ Lisa Kobialka_____
`Lisa Kobialka
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`Attorneys for Plaintiff
`Finjan, Inc.
`
`
`
`1 Counsel for Juniper is located outside of the Bay Area.
`
`10690622
`
`
`
`
`

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`Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 2 of 6
`I R E L L & M A N E L L A L L P
`
`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
`
`
`
`Juniper’s Position
`
`Finjan refuses to produce highly relevant sales information and communications
`concerning one of its key licensees, Trustwave. Finjan should be compelled to produce these
`documents because they are highly relevant to the issue of damages, as well as Juniper’s marking
`defense. Moreover, Finjan’s third-party confidentiality objection is not a proper basis for
`withholding discovery from Juniper, given that there is a Protective Order in this case to address
`confidentiality concerns.
`I.
`Factual Background
`While the original Finjan entity made and sold computer security products, it decided to
`divest its operating division in 2009 to a company called M86 Security, Inc. (“M86”) so that Finjan
`could become a patent licensing entity. See Dkt. 171 (Complaint) at § 8. As part of that spin-off,
`Finjan licensed its patents to M86 so that M86 could sell Finjan’s products that were covered by
`Finjan’s patents. In 2012, a company called Trustwave acquired M86, so Finjan and Trustwave
`amended and restated the patent license agreement to account for the transfer of ownership.
`Trustwave was then acquired by a company called Singtel in 2015. See Finjan, Inc. v. Trustwave
`Holdings, Inc., Case No. N18C-04-006 WCC-CCLD (Del. Super. Ct. Apr. 4, 2018), Dkt. 1
`(Complaint) at ¶ 8.
`At the December trial in this matter, Finjan’s CEO Phillip Hartstein testified that the
`original code developed by Finjan is still included in the Trustwave boxes being sold today. Dkt.
`336 (Trial Tr. Vol. 2) at 255, 326-327. Finjan has also contended that it is entitled to an injunction
`in part because it “indirectly compete[s with Juniper] through Finjan’s licensees and prospective
`licensees” and that “Finjan’s technology that was sold and licensed to M86 Security, and
`subsequently Trustwave, is still actively sold in the market in competition with Juniper.” Ex. A at
`25 (response to interrogatory no. 8). And, Finjan has also pointed to its licensees—including
`Trustwave—as supposed evidence of the “commercial success” of the patents in support of its
`contentions concerning secondary considerations of non-obviousness. Ex. A at 30 (response to
`interrogatory no. 9). Thus, Finjan has pointed to its relationship with Trustwave as being relevant
`to a number of issues in this litigation.
`What Finjan leaves out of the story, however, is that it recently sued Trustwave for breach
`of the license agreement. In response, Trustwave has claimed, among other things, that Finjan is
`not entitled to the royalties that it seeks because the products that Trustwave sells are not actually
`“Licensed Products”—i.e., they are not covered by a valid Finjan patent. See Trustwave, No.
`N18C-04-006, Dkt. 54 (motion to dismiss) at, e.g., 8-10. Thus, the dispute between Finjan and
`Trustwave is highly relevant to rebutting Finjan’s contentions concerning its relationship with
`Trustwave. Despite this, Finjan has stonewalled Juniper’s efforts to take discovery concerning on
`this issue.
`II.
`
`Finjan Should Be Compelled To Produce Documents Regarding Trustwave’s
`Alleged Breach Of The License Agreement.
`Juniper’s Second Set of Requests for Production (“RFP”) Nos. 3-5 and 13-14 seek
`communications and documents regarding any agreements between Finjan and Trustwave, any
`efforts to license the patents to Trustwave, the performance of any agreement (including any
`discussion of royalty rates or payments amounts), Trustwave’s obligation to pay royalties, and any
`communications referenced in Finjan’s complaint filed against Trustwave. While Finjan has
`
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`Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 3 of 6
`I R E L L & M A N E L L A L L P
`
`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
`
`
`agreed to produce documents and communications “leading up to the November 2, 2009
`agreement that reference the Patents-in-Suit,” it appears to be withholding documents regarding
`the 2012 amendment to the license, and expressly refuses to produce “communications regarding
`any breach of the November 2, 2009 agreement.” Ex. B at 9, 11. There is no legitimate basis for
`Finjan to narrow its response in this manner.
`Finjan first claims that post-2009 documents (including any documents concerning the
`purported breach) are not relevant. But as explained above, Finjan has affirmatively put its
`relationship with Trustwave at issue by claiming that Trustwave continues to sell its technology
`and pointing to this relationship as evidence of the commercial success of the patented technology,
`as well as a basis for Finjan to seek an injunction. It is inappropriate for Finjan to make such
`claims, and then obstruct Juniper’s efforts to seek evidence that tends to rebut those claims.
`Even if Finjan had not directly put its relationship with Trustwave at issue, the documents
`would still be relevant to a number of key issues in this case. For example, negotiations concerning
`the amendment to the M86 license, as well as the alleged breach of the agreement, are relevant to
`determining the degree of comparability between the license and the hypothetical negotiation.
`These negotiations are also relevant to calculating the effective royalty rate of the license, as well
`as determining if all of Trustwave’s products were properly marked. Indeed, the requested
`documents would likely show which specific Trustwave products Finjan contends are covered by
`Finjan’s patents, which is not specified in Finjan’s complaint against Trustwave2, and also whether
`Finjan actually made any effort to ensure that Trustwave was marking its products as required.
`These issues are relevant to Juniper’s marking defense. See Arctic Cat Inc. v. Bombardier
`Recretaional Products Inc., 876 F.3d 1350, 1366 (Fed. Cir. 2017).
`Finjan’s only other objections to RFP Nos. 3-5 and 13-14 are that they purportedly call for
`third-party confidential information and that the information sought is not proportional to the needs
`of the case. But third-party confidentiality is not a proper basis for withholding documents, given
`that the Protective Order in this matter expressly covers third-party confidential information. See
`Dkt. 149 (Protective Order) at § 11(b); see also, e.g., High Point SARL v. Sprint Nextel Corp., No.
`09-2269-CM-DJW, 2011 WL 4008009, at *2 (D. Kan. Sept. 9, 2011) (“The Court finds that High
`Point’s assertion of a confidentiality objection as a basis to withhold production of its third-party
`licensing correspondence, when a protective order was already entered in the case, was not
`substantially justified. It is well settled that confidentiality does not act as a bar to discovery and
`is not grounds to withhold documents or information from discovery.”). And Finjan has been
`unable to articulate any purported burden that would justify its refusal to respond to these requests,
`particularly in view of the fact that Finjan itself has put its relationship with Trustwave at issue in
`this case.
`III.
`
`Finjan Should Be Compelled to Produce Sales Information Concerning The
`Trustwave Products
`RFP Nos. 10 and 12 seek sales information of the Trustwave products that allegedly
`
`2 Trustwave actually moved to dismiss Finjan’s complaint precisely because Finjan failed
`to specifically identify any particular products or patents. See Trustwave, No. N18C-04-006, Dkt.
`54 (motion to dismiss) at 19 (“Finjan must sufficiently plead infringement of its Licensed Patents
`by Trustwave’s products. Finjan conspicuously sidesteps any attempt to comply with this
`requirement.”).
`
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`Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 4 of 6
`I R E L L & M A N E L L A L L P
`
`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
`
`
`embody Finjan’s patents. Finjan is refusing to provide any response to these requests on the
`grounds that they are purportedly irrelevant and request third-party confidential information. See
`Ex. B at 16-17. Contrary to Finjan’s contentions, however, these requests are directly relevant to
`the issue of secondary considerations of non-obviousness, which takes into account the
`“commercial success” of products embodying a patented invention. See Graham v. John Deer
`Co., 383 U.S. 1, 18 (1966). Thus, Trustwave’s success (or failure) in selling products that
`purportedly embody Finjan’s patents may be indicative of whether the patented technology
`actually represented an innovative breakthrough providing value over the prior art. Moreover, as
`noted above, third-party confidentiality is not an appropriate basis for withholding documents.
`IV.
`Finjan Should Be Compelled To Produce Documents Concerning The
`KPMG Audit.
`RFP No. 15 seeks documents relating to KPMG’s audit of Trustwave concerning alleged
`royalties owned under the agreement between Finjan and Trustwave. Once again, Finjan refused
`to produce any responsive documents on account of relevance and third-party confidentiality
`objections. The Court should compel Finjan to produce these documents because they are highly
`relevant to damages and marking.
`In connection with the Trustwave dispute, Finjan engaged KPMG to audit Trustwave’s
`compliance with the parties’ agreement. The auditors allegedly identified which products were
`royalty bearing (and therefore should have been marked) based on Finjan’s input. See Trustwave,
`No. N18C-04-006, Dkt. 54 (motion to dismiss) at 3. Thus, the audit report would provide evidence
`showing the number of patented units sold. As noted above, this information is directly relevant
`to the issue of marking, as well as the commercial success (or lack thereof) of the products. Given
`that these documents are directly relevant to rebutting Finjan’s contentions, the Court should
`compel Finjan to produce them.
`
`Finjan’s Position
`Juniper’s motion should be denied because it improperly seeks documents and
`communications that are not relevant to any issue in this case. Finjan has already given Juniper
`the Trustwave patent license itself, all the related agreements, and all other non-privileged
`documents concerning the negotiation of the license. Juniper’s motion ignores all of this highly
`relevant material that Finjan produced, and instead embarks on an unnecessary fishing expedition
`into confidential documents and communications that have no bearing on this case, and it should
`therefore be denied.
`I. DOCUMENTS RELATED TO THE CONTRACT ACTION ARE IRRELEVANT
`a.
`Damages
`The Court should deny Juniper’s motion because documents and communications
`concerning Finjan’s contract suit against Trustwave in the Delaware state court are not relevant to
`any issues in Finjan’s patent infringement case against Juniper here. On March 6, 2012, Finjan
`entered into an Amended and Restated Patent License Agreement with Trustwave. This
`agreement, which Finjan produced to Juniper, contains a provision which contemplates additional
`payments if certain acquisition events occurred. This provision was triggered on or about
`September of 2015 when Singapore Telecommunications Ltd. (“Singtel”) acquired Trustwave and
`is the basis of Finjan’s April 2018 breach of contract complaint filed against Trustwave in
`Delaware
`state
`court.
`
`See
`https://www.finjan.com/news-media/press-
`
`
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`Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 5 of 6
`I R E L L & M A N E L L A L L P
`
`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
`
`
`releases/detail/767/delaware-court-clears-path-for-finjan-to-establish. Finjan’s claims are for a
`contract dispute between the parties concerning the additional payments Trustwave owes to Finjan
`under the agreement due to the Singtel acquisition, and whether Trustwave improperly interfered
`with the contract’s auditing provisions. Finjan, Inc. v. Trustwave Holdings, Inc., 2018 WL
`1917274 (Del.Super.) (“Contract Action”).
`The Contract Action is strictly a breach of contract case, where the remedies sought are
`purely contractual in nature. Therefore, any documents and communications concerning
`Trustwave’s alleged breach of contract have no relevance to Juniper’s damages for infringement
`here. Finjan has already provided the license agreement itself, as well as the documents and
`communications related to the execution of that agreement that are relevant. This not only includes
`emails from 2012 and draft agreements exchanged between Finjan and Trustwave, but also other
`litigation materials that discuss the Trustwave license, such as deposition transcripts of Finjan
`employees from other litigations involving the infringement of Finjan’s patents. 3 See, e.g.,
`FINJAN-JN 409516-681, at 109:25-112:2, 113:23-7, 208:11-217:5; FINJAN-JN 430610-708, at
`170:1-175:1; FINJAN-JN 431279-363, at 199:10-16.
`Simply put, the documents and communications already produced by Finjan that concern
`the Trustwave license cover the landscape of what is relevant and are more than sufficient for
`Juniper to assess its damages case, while any documents related to the subsequent breach of that
`agreement – years after its execution – have no relevance to Juniper’s assessment of damages for
`patent infringement. Contrary to Juniper’s argument, those documents have nothing to do with
`assessing Juniper’s royalty rate or the degree of comparability between the executed Trustwave
`license and the hypothetical negotiation. Rather than explaining precisely how any documents
`concerning Trustwave’s alleged contract breach relates to its damages theories, Juniper sets forth
`bare assertions of relevance. For these reasons, Juniper’s motion to compel should be denied.
`b.
`Marking
`Documents and communications related to the Contract Action are not relevant to any
`marking issues in this case. As Juniper is well aware, there is no provision in the Trustwave license
`that requires Trustwave to mark its products. This is why Juniper is unable to point to such a
`provision in the license agreement itself. Regardless, Finjan is relying upon actual notice to
`Juniper, not constructive notice at the upcoming trial. Finjan informed Juniper at the lead counsel
`meet and confer earlier this month of this issue, such that marking is not an issue for trial and not
`relevant. See Ex. 1 (Follow-up email from Finjan reiterating that Finjan is not alleging constructive
`notice). Therefore, any marking-related argument raised by Juniper on this issue is moot.
`c.
`Non-Obviousness
`The documents sought by Juniper are also not relevant to challenging Finjan’s assertion of
`non-obviousness by secondary considerations. In response to Juniper’s Interrogatory No. 9, Finjan
`points to its success in licensing as demonstrating the value of its patent portfolio. See Ex. 2
`(Finjan’s response to Interrogatory No. 9 mentioning Finjan’s successful licensing of its patent
`portfolio to various third parties). Juniper argues that documents related to Trustwave’s breach is
`
`3 Juniper argues that Finjan has not produced documents and communications related to the
`execution of its 2012 Amended and Restated Patent License Agreement with Trustwave. It seems
`that Juniper is either misleading the Court or has not searched the production for these documents.
`Finjan has produced all non-privileged documents in its possession relating to this agreement.
`
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`Case 3:17-cv-05659-WHA Document 543 Filed 06/20/19 Page 6 of 6
`I R E L L & M A N E L L A L L P
`
`A REGISTERED LIMITED LIABILITY LAW PARTNERSHIP
`INCLUDING PROFESSIONAL CORPORATIONS
`
`
`relevant to rebutting Finjan’s non-obviousness arguments, but it completely fails to explain just
`how a breach of a contract negates or otherwise bears on the commercial success of a patentee in
`the context of challenging non-obviousness. Moreover, documents related to Trustwave’s post-
`license sales are not necessarily indicative of whether or not a patented technology provides the
`innovative breakthrough over prior art, as Juniper claims. Juniper does not show how downstream
`sales are relevant to whether or not a licensee saw value in the patents when deciding to enter the
`license. For these reasons, Juniper’s motion should be denied.
`d.
`Injunction
`Documents and communications related to the Contract Action are not relevant to Juniper’s
`attack on Finjan’s claim for a permanent injunction.4 In paragraph 15 of the complaint against
`Trustwave, it is alleged that Trustwave identified certain products that were within the scope of
`the agreement and provided the financial information to the auditor to determine the amount of
`additional royalties that were due under the agreement. Finjan, Inc. v. Trustwave Holdings, Inc.,
`2018 WL 1917274. Thus, it appears that Trustwave conceded to a certain extent that at least some
`of its products are covered under the license, thereby contradicting Juniper’s position on
`irreparable harm and mooting Juniper’s need for these documents to address the issue. Moreover,
`Juniper purports that one of the very documents it seeks, the KPMG audit, specifically shows the
`“number of patented units sold” by Trustwave. This completely contradicts Juniper’s argument
`that the Contract Action documents are needed to show that Trustwave no longer sells licensed
`products and that Finjan suffers no irreparable harm. Even if documents concerning the Contract
`Action were relevant, which they are not, whether or not Trustwave still sells licensed products
`covered by Finjan’s patents does not dispose of Finjan’s irreparable harm claims as set forth in
`Finjan’s response to Interrogatory No. 8. See Ex. 2 (Finjan’s response to Interrogatory No. 8).
`Giving Juniper unfettered access to Trustwave’s confidential information from the unrelated case
`so that Juniper can fish for a document that likely does not exist just to make this point is both
`burdensome to Finjan and grossly disproportional to the needs of the case. Fed. R. Civ. Pro.
`26(b)(1). For all of these reasons, the Court should deny Juniper’s motion to compel these
`documents.
`II.
`Juniper Has Less Burdensome Means for Obtaining the Information Sought
`Alternatively, in the event that the Court determines that this information is relevant, Finjan
`still requests that the Court deny Juniper’s motion to compel. Juniper still has pending ESI requests
`through which it may obtain documents sought in this motion. The search terms for these ESI
`requests are currently being finalized by the parties, and indeed, one of the terms chosen by Juniper
`is “Trustwave.” Since Juniper’s ESI search may result in the production of non-privileged
`documents that are responsive to its Requests for Production, Juniper’s motion to compel
`documents at this stage is premature and denying the motion would prevent Finjan from needlessly
`doubling its efforts. Additionally, Juniper can request these documents, including sales
`documents, directly from Trustwave. Finjan has not received any notice of Juniper attempting to
`subpoena these documents from Trustwave.
`For all of the forgoing reasons, Juniper’s motion to compel should be denied.
`
`
`4 Juniper claims that Trustwave does not still sell products covered by Finjan’s patents, and that
`this negates Finjan’s claim of irreparable harm.
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