Case 4:18-cv-07229-YGR Document 166 Filed 02/16/21 Page 1 of 12
`
`EDWARD G. POPLAWSKI (SBN 113590)
`epoplawski@wsgr.com
`OLIVIA M. KIM (SBN 228382)
`okim@wsgr.com
`TALIN GORDNIA (SBN 274213)
`tgordnia@wsgr.com
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`633 West Fifth Street, Suite 1550
`Los Angeles, CA 90071
`Telephone: (323) 210-2900
`Facsimile: (866) 974-7329
`
`Attorneys for Defendant
`QUALYS INC.
`
`RYAN R. SMITH (SBN 229323)
`rsmith@wsgr.com
`CHRISTOPHER D. MAYS (SBN 266510)
`cmays@wsgr.com
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`Telephone: (650) 493-9300
`Facsimile: (650) 493-6811
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`OAKLAND DIVISION
`
`CASE NO.: 4:18-cv-07229-YGR (TSH)
`
`DEFENDANT QUALYS INC.’S
`REPLY IN SUPPORT OF MOTION
`TO STRIKE PORTIONS OF
`PLAINTIFF FINJAN LLC’S
`INFRINGEMENT AND DAMAGES
`EXPERT REPORTS
`
`Judge: Hon. Yvonne Gonzalez
`Rogers
`Date: March 2, 2021
`Time: 2:00pm
`Location: Zoom Teleconference1
`
`)))))))))))))))
`
`FINJAN LLC,
`
`Plaintiff,
`
`v.
`
`QUALYS INC.,
`
`Defendant.
`
`1 Per the Court’s Notice regarding Civil Law and Motion Calendars and its Order at D.I. 48.
`
`CASE NO. 4:18-cv-07229-YGR
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`QUALYS’S REPLY ISO MOTION TO STRIKE
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`Case 4:18-cv-07229-YGR Document 166 Filed 02/16/21 Page 2 of 12
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`I.
`
`INTRODUCTION
`Finjan seeks to add a host of previously undisclosed infringement and related theories to
`the case through its experts Drs. Medvidovic (technical) and McDuff (damages). Finjan had ample
`opportunity to seek leave to amend its contentions but instead tried to sneak them into expert
`reports months after the close of fact discovery. Finjan has pulled this exact tactic in other cases
`and had its expert reports stricken and attorney fees awarded against it. See Opening Brief (D.I.
`158) at 1.
`In response to the instant Motion, Finjan points to a handful of ambiguous statements in its
`infringement contentions in a transparent attempt to manufacture support for Dr. Medvidovic’s
`new theories. Tellingly, Finjan never quotes its infringement contentions directly but instead
`relies exclusively on attorney characterization and interpretation. This should be a warning flag
`to the Court. Indeed, the text of Finjan’s contentions do not support its attorneys’ characterizations,
`nor do they support the new theories of infringements offered by Medvidovic.
`Regarding foreign sales, Finjan blatantly disregards Judge Hixson’s discovery order
`finding that Finjan’s contentions had failed to preserve any theory rendering Qualys’s foreign sales
`activity. Instead of seeking to amend its contentions in view of Judge Hixon’s order, Finjan again
`uses its experts’ reports as a vehicle to sneak the same improper theory into the case that Judge
`Hixson himself found to be an irrelevant “makeweight.”
`II.
`FINJAN’S NEW CLOUD AGENT THEORY
`It is undisputed that Finjan’s ’408 claim chart includes no reference to Qualys’s Cloud
`Agent product. Nevertheless, Finjan argues that it sufficiently disclosed a theory of infringement
`involving this product because its claim chart discloses the use of (1) a non-descript “receiver
`component” and (2) Qualys’s Scanner Appliance, which Finjan contends operates the same as
`Qualys’s Cloud Agent. Finjan’s argument facially contradicts both the Patent Local Rules and this
`Court’s own jurisprudence, both of which require Finjan to identify infringing components and
`devices as specifically as possible.
`To preserve a theory of infringement involving the Cloud Agent, Patent L.R. 3-1(c)
`required to provide a “chart identifying specifically where and how each limitation of each asserted
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`claim is found within each Accused Instrumentality.” 2 This Court has explained that the rule
`requires Finjan to “pinpoint their contentions as specifically as possible.” Theranos, Inc. v. Fuisz
`Pharma LLC, No. 11-CV-05236-YGR, 2012 WL 6000798, at *6 (N.D. Cal. Nov. 30, 2012). “A
`patentee must nevertheless disclose what in each accused instrumentality it contends practices each
`and every limitation of each asserted claim to the extent appropriate information is reasonably
`available to it.” Id. at *3. “In patent litigation, vague and conclusory contentions are inadequate.”
`Id. at *4.
`Finjan did not do this. Finjan’s claim chart was limited to Qualys’s Appliance Scanner.
`Exhibit 5 (D.I. 158-6) at 3. Finjan knew at the time that Qualys’s Appliance Scanner Cloud Agent
`were distinct products. Indeed, Finjan itself listed both the Cloud Agent and the Scanner Appliance
`as two distinct products in its Patent L.R. 3-1(b) identification of accused products. See D.I. 164-
`4 at 4. Moreover, Finjan specifically disclosed a Cloud Agent theory for every other asserted
`patent but the ’408 Patent. For example, consider the page of Finjan’s ’408 claim chart it cites in
`its Opposition (at 5) with its Cloud Agent theory from the asserted ’731 Patent:
`’408 Patent (Exhibit A at 2)
`’731 Patent (D.I. 100-11 at 000189)
`
`2 Finjan argues that it complied with the Patent L.R. 3-1(b) by listing the Cloud Agent as an
`infringing device. This is a straw man argument, because Qualys does not allege that Finjan
`violated this provision, but rather Patent L.R. 3-1(c).
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`Exhibit 5, D.I. 158-6, at 3; D.I. 100-11 at 000189. This is one of nearly two dozen examples of
`specific Cloud Agent theories Finjan discussed in its claim charts for other asserted patents. See,
`e.g., D.I. 100-11 at 000036, 00047, 000118, 000119, 000204, 000221, 000222, 000249, 000259,
`000321, 000322, 000324, 000374, 000375, 000377, 000381, 000386, 000388, 000392, 000486,
`and 000508. Tellingly, the word “Cloud Agent” appears nowhere in Finjan’s ’408 claim chart.
`Finjan offers two reasons why the Court should permit Medvidovic’s new Cloud Agent
`theory for the ’408. First, Finjan contends that the phrase “a receiver component on a node that
`receives content” included in the above image covers the Cloud Agents. But Finjan offers no
`explanation why this single sentence about a “receiver component” (which is never identified with
`any specificity or ever called a Cloud Agent) satisfies the sufficiency requirement, especially given
`how detailed its Cloud Agent theories were for the other asserted patents. This hardly satisfies the
`Local Rules or the Court’s admonishment that patentees be “as specific as possible.” See
`Theranos, 2012 WL 6000798 at *6.3
`Second, Finjan argues that its disclosure of its disclosed Scanner Appliance theory
`preserved a Cloud Agent theory because (Finjan now contends) the functionality of the Scanner
`Appliance and the Cloud Agent is the same. See Opposition at 5. To begin with, Finjan’s
`contention is factually incorrect – Qualys detailed some of the relevant differences between its
`Scanners and the Cloud Agent in its opening brief. See D.I. 158 at 2-3. Moreover, this argument
`is inconsistent with Finjan’s infringement contentions themselves, which uniformly treat the Cloud
`Agent and Scanner Appliance as distinct products with distinct theories of infringement. See, e.g.,
`D.I. 100-11 at 000036, 00047, 000118, 000126, 000128, 000130, 000133, 000135, 000136,
`000177, 000179, 000189, 000192, 000196, 000209, 000211, 000304, and 000392. In any event,
`Finjan’s argument is legally immaterial because its original contentions did not disclose that the
`Scanner Appliance was somehow representative of a Cloud Agent.
`
`3 Moreover, the “receiver component” Finjan points to cannot be a Cloud Agent because
`Finjan’s contentions clearly point to this component (whatever it is) as being part of Qualys’s
`Cloud Platform (also known as the QualysGuard Secure Operations Centers) while Medvidovic
`opines that the Cloud Agent is found on an endpoint device. Compare Exhibit Exhibit A (D.I.
`164-2) at 2 with Exhibit B (D.I. 164-5) at ¶ 98.
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`Notably, Finjan has had its expert reports (including Medvidovic) stricken previously for
`just such improper litigation tactics. See Finjan, Inc. v. Blue Coat Sys., Inc., No. 15-cv-03295-
`BLF, Dkt. No. 271, at *12 (N.D. Cal. July 28, 2017) (Striking expert report and stating, “Finjan
`does not dispute that the [original accused component] is a different component from [new accused
`component]. Instead, its rebuttal is simply that the functionality disclosed for the [original accused
`component] in its infringement contentions—storing the results of the sandbox dynamic analysis
`performed by the MAA—is the same as the functionality disclosed for [new accused component]
`in its expert report. This is unpersuasive.”); see also Finjan, Inc. v. Juniper Network, Inc., et al.,
`Case No. 3:17-cv-05659, 2021 WL 75735, at *2 (N.D. Cal. Jan. 9, 2021) (“Finjan tried to sneak
`this theory in with its expert-damages report”); Opening Brief, D.I. 158 at 1 (citing additional
`cases).4 The Court should do the same here.
`III.
`FINJAN’S NEW DYNAMIC BUILDING AND DETECTING THEORIES5
`Finjan fails in two regards to show that Medvidovic’s opinions regarding the “dynamic
`building” and “dynamic detection” were disclosed in its infringement contentions. First, Finjan
`acknowledges that its infringement contentions disclose only one theory of the dynamic building
`step of the asserted claims: namely, the command to “build a ‘tree’ from an XML input.” This is
`the functionality that Qualys excerpted in its Opening Brief (D.I. 158) at 6. As discussed there,
`this functionality is performed by the Qualys API; thus, the infringement contentions accuse only
`the Qualys API functionality of performing the “dynamic building” step of the asserted ’408
`Claims. But Medvidovic’s opinions are not limited to the Qualys API for these steps. Instead, he
`accuses a slew of other functionalities performed by different parts of Qualys’s Cloud Platform
`and, in some cases, completely different devices (like the Scanner Appliance and Cloud Agent).
`See Opening Brief (D.I. 158) at 8-9. Finjan argues that because the Qualys API refers to creating
`
`4 Finjan also contends that its contentions “refer to data collected by the Cloud Agents.” This
`is not correct. As discussed above, the contentions refer only to the Appliance Scanner and,
`therefore, refers to data collected by that scanner, not the Cloud Agent.
`5 Finjan makes a cursory argument that it was not required to supplement its infringement
`contentions because it claims Qualys did not comply with its discovery obligations. While
`Qualys disputes this point, it is irrelevant. Finjan never brought a motion to compel on these
`issues. Even if it had, this does not excuse its requirement to timely move to amend its
`infringement contentions to add new theories.
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`a parse tree using XML, its expert may offer opinions about different components that the expert
`contends also create parse trees using XML. But this is simply another version of the “same
`functionality” argument that Finjan advanced and lost on in the Blue Coat litigation (and discussed
`above). See Finjan, Inc. v. Blue Coat Sys., Inc., No. 15-cv-03295-BLF, Dkt. No. 271 at *12.6
`Thus, this is not a matter of merely identifying new evidence to support an existing theory; Finjan
`has added new theories by having its expert accuse new and different functionality of performing
`this step than Finjan disclosed in its claim chart. Compare Opening Brief (D.I. 158) at 8-9 with
`Exhibit 5 (D.I. 158-6) at 15-16. Any paragraphs opining on theories unrelated to the Qualys API
`should be struck.
`Second, Finjan disputes that its infringement contentions fail to disclose the critical aspect
`of dynamic building and dynamic detection – namely, that these steps must occur at specific times.
`The claims require that the “dynamic building” step occur “while said receiving receives the
`incoming stream.” See Ex. 4 (’408 Patent) at Claims 1, 22, 23, 29, 35. Similarly, the “dynamic
`detecting” step must occur “while said dynamically building builds the parse tree.” See id. But
`Finjan’s claim chart is silent as to these temporal requirements. Finjan points to a single
`ambiguous sentence (without any supporting citation or elaboration) stating that these two steps
`occur “during the scans described above.” See Exhibit 5 (D.I. 158-6) at 15-16. This language
`does not match the claim language, and Finjan points to nothing in its claim chart saying that the
`alleged “scans described above” occur when these two limitations require. This is not a matter of
`claim construction (as Finjan contends), but a simple failure by Finjan to provide a contention for
`every limitation of the claim, contravening Patent L.R. 3-1(c).
`
`6 Finjan also argues that because it disclosed an infringement theory involving Qualys API
`(which Finjan claims is part of Qualys’s QWeb component found on its Cloud Platform), it
`sufficiently disclosed a theory of infringement involving any other QWeb component that may
`involve the use of XML and/or parse tree creation even if unrelated to the Qualys API
`functionality. The Local Rules require more granularity than this, as discussed. The sole
`paragraph Finjan cites to support this argument merely includes an opinion from Medvidovic
`discussing the Qualys API. Nowhere does Finjan point to anything tying the Qualys API to the
`plethora of various components and functionalities that Medvidovic accuses in his report.
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`IV.
`
`FINJAN’S CHANGED CLAIM 29 THEORY
`Finjan’s arguments regarding Claim 29 only further reveal how Finjan is attempting to
`change its infringement theories. Finjan admits that Claim 29’s “computer-readable storage
`medium” and “accessor” claim elements both incorporate claim element 1(d) (i.e., the
`“instantiating…” step of Claim 1) by reference. Opposition at 10. As discussed, this
`“instantiating” step disclosed a theory where the only identified structure was a database found on
`Qualys’s Cloud Platform. See Opening Brief (D.I. 158) at 10-11.
`Now, Finjan’s expert opines that these two elements are practiced by Qualys’s Scanner
`Appliance, a different device. To manufacture support for its expert’s new theory, Finjan urges
`the Court to ignore what it stated in the claim chart and instead incorporate into Claim 29 language
`from Claim 1 that happens to mention a Scanner Appliance. Compare Opposition at 11 with
`Exhibit 5 (D.I. 158-6) at 4. Finjan is essentially asking the Court to rewrite its infringement
`contentions, because the contentions for the “storage medium” and the “accessor” (or the claim
`limitations incorporated by reference) clearly reference only the server-side database, not a
`Scanner Appliance. Tellingly, Finjan’s infringement contentions specifically labels the database
`as the “accessor,” and the scanner as a different device:
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`Id. at 43 (yellow arrows annotated). Finjan cannot credibly argue that its Claim 29 claim chart
`placed Qualys on reasonable notice that Finjan intended to accuse a scanner of practicing the
`“storage medium” and “accessor” limitations.
`V.
`FINJAN’S CHANGED “RECEIVING” THEORY
`As discussed in Qualys’s Opening Brief, Finjan disclosed two theories for the “receiving”
`limitation that each involved a client device requesting content from a source computer on the
`Internet. Under Finjan’s theory, that content was received by either the Qualys Cloud Platform
`(Contention 1) or by a scanner dispersed within a customer’s network (Contention 2). See Exhibit
`5 (D.I. 158-6) at 2-3. Medvidovic changed the infringement theory in his expert report, however,
`and now contends that Scanner Appliances and Virtual Scanners infringe by requesting data from
`devices within a customer’s own network. See Opening Brief (D.I. 158) at 12-13.
`Finjan argues that Medvidovic’s theories were disclosed because the chart supposedly
`provides a theory where a “receiver” “is a part of a client device” and receives data “before
`communicating over a network.” This is a total fabrication. Finjan’s claim chart identifies only
`three locations for the “receiver”: Qualys’s Cloud Platform, an “Internet Remote Scanner,” or a
`“QualysGuard Scanner Appliance”:
`
`Exhibit 5 (D.I. 158-6) at 2-4. The claim chart refers to a client device as a different component
`that requests the content the receiver ultimately receives but does not say that these are the same
`devices. See id. Further, each of Finjan’s theories disclose that the “receiver” receives the
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`incoming stream “from a source computer, such as the Internet.” Id. (emphasis added).7 There
`is no theory either of a “receiver” being on a client device or of that “receiver” receiving data
`before communicating over a network (and, likewise, there is also no theory in the claim chart of
`a Scanner Appliance, Virtual Scanner, or Cloud Agent being installed on a client device).
`Finjan next argues that neither the claims nor its contentions say the content must come
`from the Internet, but this misses the key point. It is Finjan’s burden to disclose its theories as
`specifically as possible, and the claim chart identifies no other source but the Internet. Finjan also
`argues that these distinctions do not matter because the claims are agnostic as to where the data is
`received from. But this overlooks a critical requirement of Patent L.R. 3-1(c). That rule requires
`Finjan to specify both what the allegedly infringing components are and, critically, how they
`infringe. Indeed, Finjan quibbles over Qualys’s use of the word “intercept,” but the key point is
`that Finjan did not disclose any theory in its claim chart where a Scanner Appliance, Virtual
`Scanner, or Cloud Agent receives content from a client device located on the customer’s own
`network, as Medvidovic now opines. Compare Exhibit 5 (D.I. 158-6) at 2-4 with Exhibit 1 at ¶¶
`184-197.8 9
`VI. MEDVIDOVIC’S NEW DATE OF FIRST INFRINGEMENT OPINIONS
`In ¶ 21 of his report, Medvidovic offers the specific opinion that “the date of first
`infringement was no earlier than 2005.” Exhibit 1 at ¶ 21. His opinion contradicts Finjan’s earlier
`contentions that the date of first infringement is November 29, 2018. See D.I. 100-11 at 11, Ex. 8
`at 4. This opinion should be struck as inconsistent with Finjan’s contentions.10
`
`7 Finjan’s argument is further baffling because it does not explain how a configuration where
`the receiver receives data before communicating over a network can possibly satisfy the claim’s
`requirement of receiving “an incoming stream of program code.”
`8 Finjan argues that Virtual Scanners can be installed on a client device, but the cited portions
`of Medvidovic’s report do not support this assertion.
`9 Finjan argues that even if its infringement contentions only disclose receiving content over
`the Internet, such a limitation is irrelevant as to Qualys’s “Vulnerability Features.” Also, Finjan
`curiously contends that Qualys is not seeking to strike any theories regarding the so-called
`“Vulnerability Features.” This is incorrect, as the paragraphs Qualys seeks to strike for this issue
`specifically include the Vulnerability Features.
`10 Finjan quibbles over the inclusion in this section of additional paragraphs, but as Qualys
`noted in its Opening Brief, it seeks to strike these additional paragraphs for containing previously
`(continued...)
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`VII.
`
`FINJAN’S DOE THEORIES ARE INADEQUATELY VAGUE
`Finjan argues that its DOE theories “set forth a specific theory as to the function-way-result
`test.” Opposition at 14-15. However, Finjan’s contentions do little more than recite the bare
`elements of the test along with the claim language for the “instantiating…” step. They also
`combine every single accused product into a single cursory contention without identifying any
`specific component or functionality in any accused product that Finjan contends is insubstantially
`different from the claimed “instantiating…” step. See Exhibit 5, D.I. 158-6 at 13. These
`contentions fail to place Qualys on notice as to Finjan’s theories, and therefore Finjan failed to
`preserve the theories for use by Medvidovic. Medvidovic’s corresponding portions of his report
`should be struck.
`VIII. FINJAN’S FOREIGN SALES THEORY HAS ALREADY BEEN FOUND
`IRRELEVANT
`Finjan’s argument misunderstands the import of Judge Hixson’s September 17 Order and
`the Court’s Order overruling Finjan’s objections thereto. Specifically, Finjan argues that the
`Court’s September 17 and December 4 Orders “did not remove the subject of ‘foreign sales’ from
`the scope of trial.” Opposition at 15. This overlooks the fact that Judge Hixson determined that
`Finjan had failed to preserve any theory rendering Qualys’s foreign sales activity relevant to the
`case:
`
`But as matters stand now, Finjan is trying to obtain discovery based on
`infringement theories that are way outside its infringement contentions, fact
`discovery is about to close, and Finjan has not even asked Judge Gonzalez
`Rogers for permission to amend. The undersigned is quite skeptical that
`Finjan’s new infringement theories will ever be in this case.
`
`. . .
`
`Rather, the Court’s point is that we are almost at the end of fact discovery,
`and Finjan seems to have done nothing to make its new infringement theories
`part of its liability case.
`
`undisclosed theories regarding the “dynamic building” step and that are discussed above. See
`Opening Brief at 13. Finjan also attempts to cast aspersions on Qualys’s expert’s report, but
`such argument is irrelevant to this issue.
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`D.I. 105 at 3-4. In making this ruling, Judge Hixson specifically addressed the same foreign sales
`theory that it now advances through its experts:
`Finjan has a few back up arguments, but they are makeweights. Finjan argues
`that Qualys’s foreign customers benefit from security updates that Qualys
`develops from information that it gains in part from the infringing domestic
`use by its U.S. customers of Qualys’s products. That argument is irrelevant,
`however, because the reasonable royalty compensates for infringement, and
`Finjan’s argument does not demonstrate that the foreign sales are of products
`that infringe. Also, Finjan does not even articulate how the value of that
`“benefit” would be reflected in the foreign sales information it seeks.
`
`See D.I. 105 at 4 n. 4 (highlighting and emphasis added); see also D.I. 100 at 2-3. The highlighted
`portion above specifically concerns the foreign sales theory now offered by Finjan’s experts. In
`the wake of Judge Hixon’s order, which this Court affirmed, Finjan never sought to amend its
`contentions to articulate an infringement theory based on Qualys’s foreign sales. As such, Finjan’s
`foreign sales infringement theory is subject to the “law of the case” doctrine under which “a court
`is generally precluded from reconsidering an issue that has already been decided…” U.S. v.
`Alexander, 106 F.3d 874, 876 (9th Cir. 1997). Finjan has not argued that the Court should depart
`from this ruling. The mere fact that Judge Hixson’s relevance determination was made in the
`context of a motion to compel does not change its significance. That Finjan then appealed Judge
`Hixson’s determination to the Court and again lost only further underscores the point. Finjan has
`been heard on this issue and did not prevail. It should not be permitted to sneak these theories
`back into the case through its experts.
`
`IX.
`
`CONCLUSION
`For the foregoing reasons, the Court should grant Qualys’s motion to strike portions of the
`expert reports of Drs. Nenad Medvidovic, Eric Cole, and DeForest McDuff that exceed the scope
`of Finjan’s Infringement Contentions. Qualys also wishes to inform the Court that the outcome of
`this Motion as well as its pending first Motion to Strike (D.I. 126) could have a significant impact
`on the size and scope of this litigation. For example, over 81% of the damages sought by Finjan
`in this case pertain to the ’408 Patent, and over 40% of the damages pertain to its alleged foreign
`sales theory. Qualys believes resolution of these two motions could materially impact the number
`of issues for the Court to address through summary judgment and Daubert motions.
`
`CASE NO. 4:18-cv-07229-YGR
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`Case 4:18-cv-07229-YGR Document 166 Filed 02/16/21 Page 12 of 12
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`Respectfully submitted,
`
`WILSON SONSINI GOODRICH & ROSATI
`
`Dated: February 16, 2021
`
`By:
`
`/s/ Christopher D. Mays
`CHRISTOPHER D. MAYS
`
`Counsel for
`QUALYS INC.
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`CASE NO. 4:18-cv-07229-YGR
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