Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 1 of 14
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` Pages 1 - 13
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`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`Before The Honorable William H. Alsup, Judge
`
`)
`FINJAN, INC.,
` )
` Plaintiff, )
` )
` VS. ) NO. CV 17-05659-WHA
` )
`JUNIPER NETWORK, INC.,
`)
` )
` Defendant.
`)
` )
`
` San Francisco, California
` Wednesday, May 9, 2017
`
`
`TRANSCRIPT OF PROCEEDINGS
`
`
`APPEARANCES:
`
`For Plaintiff:
` KRAMER LEVIN NAFTALIS & FRANKEL LLP
` 990 Marsh Road
` Menlo Park, CA 94025
` BY: KRISTOPHER KASTENS, ESQUIRE
` PHUONG NGUYEN, ESQUIRE
`
`For Defendant:
` IRELL & MANELLA LLP
` 1800 Avenue of the Stars
` Suite 900
` Los Angeles, CA 90067
` BY: JOSHUA GLUCOFT, ESQUIRE
`
`
`
`Reported By: Pamela A. Batalo, CSR No. 3593, RMR, FCRR
` Official Reporter
`
`
`
`
`
` Pages 1 - 13
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`Before The Honorable William H. Alsup, Judge
`
`)
`FINJAN, INC.,
` )
` Plaintiff, )
` )
` VS. ) NO. CV 17-05659-WHA
` )
`JUNIPER NETWORK, INC.,
`)
` )
` Defendant.
`)
` )
`
` San Francisco, California
` Wednesday, May 9, 2017
`
`
`TRANSCRIPT OF PROCEEDINGS
`
`
`APPEARANCES:
`
`For Plaintiff:
` KRAMER LEVIN NAFTALIS & FRANKEL LLP
` 990 Marsh Road
` Menlo Park, CA 94025
` BY: KRISTOPHER KASTENS, ESQUIRE
` PHUONG NGUYEN, ESQUIRE
`
`For Defendant:
` IRELL & MANELLA LLP
` 1800 Avenue of the Stars
` Suite 900
` Los Angeles, CA 90067
` BY: JOSHUA GLUCOFT, ESQUIRE
`
`
`
`Reported By: Pamela A. Batalo, CSR No. 3593, RMR, FCRR
` Official Reporter
`
`
`
`
`
`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 2 of 14
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` 2
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`Wednesday - May 9, 2017
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` 8:00 a.m.
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`P R O C E E D I N G S
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`---000---
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`THE CLERK: Calling CV 17-5659, Finjan, Inc. vs.
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`Juniper Network, Inc.
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`Counsel, please approach the podium and state your
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`appearances for the record.
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`MR. KASTENS: Kristopher Kastens for plaintiff,
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`Finjan, Inc. And with me, I have Phuong Nguyen, who will be
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`doing the majority of the arguments this morning, and she is
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`one of our junior associates.
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`THE COURT: Great. Welcome.
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`MR. GLUCOFT: Good morning, Your Honor. Joshua
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`Glucoft of Irell & Manella on behalf of Juniper Networks.
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`THE COURT: Are you a junior lawyer?
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`MR. GLUCOFT: Yes, Your Honor. I'm a fourth year.
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`THE COURT: Fourth year. All right.
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`How many years out are you, Ms. Nguyen?
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`MS. NGUYEN: Almost three years out now.
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`THE COURT: Three?
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`MS. NGUYEN: Yes.
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`THE COURT: Three against four.
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`This is a motion by Ms. Nguyen; right?
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`MS. NGUYEN: Yes, Your Honor.
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`THE COURT: Go ahead.
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 3 of 14
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`MS. NGUYEN: Your Honor, Finjan seeks leave to amend
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`its Complaint to include the ATP Appliance, and leave should be
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`granted here because leave is freely granted, and defendant
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`Juniper actually does not oppose the inclusion of the ATP
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`Appliance. It opposes including the ATP appliance in the early
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`summary judgment motions.
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`And here Finjan has acted in good faith in bringing its
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`motion. It brought this request promptly after learning of the
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`ATP appliance in February and it also brought this motion a few
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`days after this Court stated that Finjan would need to move to
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`amend its Complaint to specifically identify the ATP appliance.
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`And also the amendments would not be futile because
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`Finjan's infringement claims are similar to those that were in
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`its original Complaint, which Juniper did not move to dismiss.
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`And finally, there is no prejudice to Juniper because
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`Finjan first identified the ATP appliance as an accused
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`instrumentality in its February discovery requests and has
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`provided specific charts for the ATP appliance in its
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`infringement contentions, which were served on March 8th.
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`And also, these are their own products, and so they should
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`be familiar with how they work, and discovery is still ongoing.
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`THE COURT: All right. What does Juniper say?
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`MR. GLUCOFT: Thank you, Your Honor.
`
`So there is actually two issues here beyond just this new
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`product ATP appliance.
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 4 of 14
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` 4
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`The first issue is that the proposed Amended Complaint is
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`defective, and it's defective because it includes the
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`allegations of willfulness that this Court has already
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`dismissed back in February.
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`And so these allegations, which are literally verbatim
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`identical to the willfulness allegations that were previously
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`included in the Complaint, the motion -- the deadline to amend,
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`to add additional factual allegations passed on February 22nd.
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`And so when we pointed out that this new proposed Amended
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`Complaint includes the exact same willfulness allegations, in
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`their reply, Finjan stated, well, actually these allegations,
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`they don't just relate to willfulness. They also go to this,
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`quote/unquote, exceptional case Halo standard.
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`And the problem with that argument is that not only are
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`the allegations exactly verbatim identical, the only reason
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`those allegations suggest the case is exceptional is because
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`they allege that we had -- or they failed to allege that we had
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`notice of the asserted patents and that we infringed and so
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`their exceptional case allegations were based on the notion
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`that our infringement was purportedly willful.
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`So it's the exact same allegations. It even uses the term
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`"willful."
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`THE COURT: I have got a question for you.
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`"Exceptional," I know what that means and where it comes
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`from, but don't I just wait until later in the case when the
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 5 of 14
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`issue comes up? You don't have to plead and prove exceptional,
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`do you?
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`MR. GLUCOFT: Well, Your Honor, it depends the
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`basis -- it depends on the basis forming your allegations of an
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`exceptional case. So if, for example, their exceptional case
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`allegations were based on our litigation conduct in this case,
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`then I agree certainly that that couldn't be found in their
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`Complaint.
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`But the -- if the exceptional case allegations are
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`founded, for example, on us copying Finjan's product, then,
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`yes, they would have to plead those --
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`THE COURT: What is the decision that says that it has
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`to be pled in that circumstance?
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`MR. GLUCOFT: Your Honor, I'm happy to follow up with
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`supplemental authority, but I believe that in any case, they
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`didn't allege anything --
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`THE COURT: No, no. "I believe" is not good enough.
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`Lawyers always believe something.
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`I need -- I question the accuracy of what you just told
`
`me. I would like to know if there is a decision by the Federal
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`Circuit that says that in order to -- that you must plead in
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`the Complaint exceptional circumstances for infringement if it
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`exists.
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`I know you do for willfulness. Okay. That's fair. But I
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`thought that the judge decides whether something is exceptional
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 6 of 14
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`after the dust has settled and not -- not necessarily at the
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`end of the case, but whenever it comes up. And it doesn't
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`depend on the pleadings.
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`See, defendants always want to lard in more and more
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`pleading requirements: "You got to do this, you got to do
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`that." So this is the time for you to stand and deliver. What
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`is the name of the Federal Circuit case that says that it has
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`to be pled? You don't know.
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`MR. GLUCOFT: Well --
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`THE COURT: And you should know. It's relevant to
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`this motion. This is something you should know. It's the
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`heart of this motion.
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`MR. GLUCOFT: Well --
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`THE COURT: Do you know the answer, Ms. Nguyen?
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`MS. NGUYEN: No, Your Honor. However, I do agree with
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`you that this is --
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`THE COURT: You are just agreeing with the judge
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`because the judge is on your side on that issue. But you need
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`to have the case law next time, too.
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`All right. Okay. I understand your point about
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`willfulness being the same verbatim language, and that's a good
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`point, but I'm not sure the other point about exceptional is a
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`good point.
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`What's the -- you said there were two issues. What is the
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`other issue you wanted to bring up?
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 7 of 14
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`MR. GLUCOFT: Yes, Your Honor. Just to quickly tie
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`off that first point, I just would like to add that in
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`Your Honor's order on the motion to dismiss, Docket No. 30 at
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`page 5, the Court found that "Finjan similarly fails to
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`identify any factual allegations that Juniper exhibited
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`egregious behavior on par with that described in Halo."
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`So in terms of what is in the Complaint, the Court has
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`already passed judgment, both with respect to whether or not
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`the allegations of willfulness should be in there and they
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`shouldn't, and also whether or not to the extent that those
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`allegations can somehow be considered as going beyond
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`willfulness and somehow reaching other portions of exceptional
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`case, whether or not those allegations meet the exceptional
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`case requirement.
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`So just to tie that off before we get to the second issue,
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`I would like to direct the Court's attention to Docket No. 30
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`at page 4 through 5.
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`The second issue is the ATP Appliance, which is this new
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`product that they are trying to add. And I think Finjan's
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`motion in summary shortchanges our position.
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`The issue is that if the Complaint is amended and as a
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`result the new product that was not developed by Juniper --
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`this was an acquisition -- the new product comes into the case
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`just weeks before summary judgment, then we would be highly
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`prejudiced.
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 8 of 14
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`And so our opposition -- it's not that we're saying there
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`is no prejudice to Juniper by amending the Complaint. Our
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`opposition is that the prejudice could only be remedied by not
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`including this new late amended product in the early summary
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`judgment proceedings.
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`So we recognize that the primary basis for prejudice to us
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`is whether or not this new product is included in the early
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`summary judgment --
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`THE COURT: Well, if we were to amend and then we
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`stick with the first round of choices that you all have already
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`made for summary judgment and then the dust settles on that
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`one, I decide whether something is exceptional or not at that
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`point, and then we go to Round 2 and then you could then insert
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`ATP in your second round. Why is that so hard for you to
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`adjust to them? I'm talking to Finjan.
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`MS. NGUYEN: Your Honor, the ATP Appliance and Sky ATP
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`have similar underlying technology in that they both have
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`static and dynamic analysis. So to be able to dispose of this
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`issue in the earlier summary judgment --
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`THE COURT: But they raise a good point. We're way
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`down the path of the first round of these prompt summary
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`judgment motions and you want to pull the rug out from under
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`that, and it makes me think that you've got a weak case, that
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`you are afraid, deathly afraid, to go to summary judgment on
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`Round 1. That's what it's suggesting to me, because you've got
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 9 of 14
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`losers maybe and you're trying to substitute something you've
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`got a fighting chance on.
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`We are way down the road on Round 1. If you lose there,
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`okay, no problem. That's life. Then you go to Round 2 and you
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`can go after ATP and then maybe you win that one.
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`So what's so bad about that?
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`MS. NGUYEN: Your Honor, this isn't about a
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`substantive weakness in Finjan's case. Again, it has to do
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`with the fact that these two products have similar underlying
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`technology --
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`THE COURT: But you didn't plead it. It wasn't in the
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`Complaint. I can't ignore that. It's coming in after the
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`fact, after the case is underway.
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`MS. NGUYEN: Yes, Your Honor, but if the ATP Appliance
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`is allowed into this case, then Juniper would already have to
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`provide discovery on these products and they would just have to
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`do it in a shorter period of time, and they have been able to
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`do that with other products such as Sky ATP.
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`So here Finjan --
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`THE COURT: If I ordered them to move heaven and
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`earth, I think they would do it. Probably. But is it fair
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`since we've already started the showdown procedure on the
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`claims that you've selected that are already in the case? And
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`then we'll let the dust settle and then on Round 2, you can go
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`to ATP. I don't see why that's so hard.
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 10 of 14
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` 10
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`No, no. She's doing a good job. You have a seat.
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`Go ahead, answer my question.
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`MS. NGUYEN: So for the purposes of judicial economy,
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`again, it's the same patent at issue and the same claim and
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`similar underlying technology, which would make it easier to
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`dispose of with the earlier summary judgment, but if the
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`Court --
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`THE COURT: All right. What do you say to the
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`willfulness point?
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`Here is what bothers me about -- you put in willfulness in
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`the exact verbatim language that I have already said is not
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`enough. I want to acknowledge something first, though.
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`Merely because you didn't allege willfulness strongly
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`enough the first time doesn't mean that you couldn't do it the
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`second time whenever a new product is being accused. So when
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`ATP gets accused, I fully recognize that you could have put in
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`additional words that would have made a difference and caused
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`it to be -- the willfulness to be okay for that one. But
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`that's not what you did.
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`For some reason I can't fathom, you used the identical
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`words that I decided were not good enough before. So aren't I
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`in a stuck position, meaning I've already ruled that that very
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`same language isn't good enough. Don't I have to rule that
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`same way again?
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`MS. NGUYEN: No, Your Honor, because Finjan is not
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 11 of 14
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` 11
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`asserting willful infringement. This is for the purposes of
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`enhanced damages under 284, and accordingly, the Court can
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`consider any of the Read Factors, which include whether Juniper
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`knew and investigated the patents.
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`So here our willfulness allegations -- sorry --
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`THE COURT: What is 284? Is that the one about
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`exceptional circumstances?
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`MS. NGUYEN: Yes, Your Honor. For enhanced damages.
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`THE COURT: See, what does the Federal Circuit say?
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`Why do we even have to plead that? I don't think you have to
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`plead that.
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`MS. NGUYEN: Your Honor, this goes back to what I was
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`not sure about in terms of the Federal Circuit's pleading
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`standard. However, to plead willful infringement does require
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`a heightened pleading standard, but here Finjan has just
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`included these factual allegations which are for the Court to
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`decide at a later time.
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`THE COURT: Yeah. I guess if you didn't put it in,
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`then the other side would say, "Oh, they didn't plead it so
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`they can't get exceptional." Well, I'm not sure of that,
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`so...
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`I'm bringing this hearing to a close. I'm going to give
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`each of you an opportunity to say anything else.
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`You're the moving party. You get to go first.
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`MS. NGUYEN: Your Honor, to the extent the Court does
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 12 of 14
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` 12
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`not allow Finjan to include the ATP Appliance in the earlier
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`summary judgment, we would be amenable to having a slight delay
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`in the summary judgment motions and proceedings, if the Court
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`is open to that.
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`THE COURT: All right. What does Juniper have to say
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`as your parting shot?
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`MR. GLUCOFT: Two quick points, Your Honor.
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`First, we strongly oppose delaying the early summary
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`judgment proceedings. That would seem to moot the entire
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`purpose of the early summary judgment proceedings and it
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`shouldn't -- it certainly shouldn't be delayed on account of
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`their six-month delay in moving to amend to add this new
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`product.
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`And the second parting point would just be that if we
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`could have some clarity from the Court as to if the Amended
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`Complaint is entered, when previous discovery that they had
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`served related to this new product, when that would be deemed
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`served so that we know when we need to respond.
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`THE COURT: Give me an example.
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`MR. GLUCOFT: Your Honor, they've previously served,
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`for example, some requests for production related specifically
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`to this new product. At the previous hearing on their motion
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`to compel, the Court indicated that no discovery would be had
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`on this new product until it was included in the Amended
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`Complaint.
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 13 of 14
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` 13
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`And so our understanding or our hope is that the Court
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`would clarify that discovery on the new product being added to
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`the case, I guess, would be deemed served when either we moved
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`to dismiss and there's an order or there is -- the new Amended
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`Complaint is entered in some form just so that there is clarity
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`for the parties as to when previously-served discovery would be
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`due.
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`But I think the more important point is certainly that
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`they cannot postpone the early summary judgment proceedings to
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`account for their delay to get in this new product because
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`they're afraid to go to early summary judgment on the products
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`that were in the original Complaint.
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`THE COURT: Okay. You both did a great job. Thank
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`you.
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`MR. GLUCOFT: Thank you, Your Honor.
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`MS. NGUYEN: Thank you, Your Honor.
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` (Proceedings adjourned at 8:18 a.m.)
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`Case 3:17-cv-05659-WHA Document 82 Filed 05/10/18 Page 14 of 14
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` CERTIFICATE OF REPORTER
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` I certify that the foregoing is a correct transcript
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`from the record of proceedings in the above-entitled matter.
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`DATE: Wednesday, May 9, 2018
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`_________________________________________
`Pamela A. Batalo, CSR No. 3593, RMR, FCRR
`U.S. Court Reporter
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