Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 1 of 11
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`E-filed 2/2/2017
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`FINJAN, INC.,
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`Plaintiff,
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`v.
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`BLUE COAT SYSTEMS, LLC,
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`Case No.15-cv-03295-BLF (HRL)
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`ORDER GRANTING-IN-PART AND
`DENYING-IN-PART DEFENDANT’S
`MOTION TO STRIKE PLAINTIFF’S
`INFRINGEMENT CONTENTIONS
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`Defendant.
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`Re: Dkt. No. 89
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`Defendant Blue Coat Systems, Inc. (“Blue Coat”) moves to strike Plaintiff Finjan, Inc.’s
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`(“Finjan”) Patent Local Rule 3-1 Infringement Contentions Regarding U.S. Patent Nos. 6,154,844
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`(the ’844 Patent), 6,956,968 (the ’968 Patent), and 7,418,731 (the ’731 Patent) (together, the
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`“three patents”). For the following reasons, the court grants Blue Coat’s motion in part and denies
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`it in part.
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`BACKGROUND
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`This is the second suit between these two parties, both players in the cybersecurity
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`industry, involving these three patents. In 2013, Finjan sued Blue Coat, accusing the latter’s
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`products of infringing six of its patents. 5:13-cv-03999-BLF, Dkt. No. 1, ¶ 37. During the prior
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`case (“Blue Coat I”), Finjan sought leave to amend its infringement contentions to assert certain of
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`its patents against additional Blue Coat products (specifically, Content Analysis System (“CAS”),
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`Malware Analysis Appliance (“MAA”), and WebPulse Service (“WebPulse”)). The court granted
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`leave for Finjan to amend its infringement contentions with respect to asserting the ‘731 patent
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`against CAS, but denied it with respect to most of Finjan’s requested amendments. 5:13-cv-
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`03999-BLF, Dkt. No. 116. The court’s denial of leave to amend was justified on the grounds that
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`Finjan had failed to identify any new or recently discovered nonpublic information about the
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`products to support its amendments. Finjan, the court stated, had thus not demonstrated the
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 2 of 11
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`diligence needed to establish good cause to amend.1 Id. Blue Coat I went to trial and ended in a
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`judgment in favor of Finjan, with the jury finding that Blue Coat had infringed five of the six
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`patents asserted. 5:13-cv-03999-BLJ, Dkt. Nos. 487, 556.
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`Five days before the trial in Blue Coat I, Finjan filed the present action. Dkt. No. 1. In its
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`Patent Local Rule 3-1 infringement contentions,2 Finjan accuses Blue Coat’s products of
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`infringing ten patents, including the three patents at issue in the present motion. Finjan’s
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`infringement contentions related to the three patents are presented in the following table:3
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`Patent
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`’844
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`’968
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`’731
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`Accused Products
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`WebPulse
`Web Security Service
`Advanced Security Gateway with the MAA or Security Analytics
`ProxySG and CAS with MAA or Security Analytics
`Mail Threat Defense with the MAA or Security Analytics
`Web Security Service
`Advanced Security Gateway with the MAA
`ProxySG and CAS with MAA
`Web Security Service
`Advanced Security Gateway with the MAA or Security Analytics
`ProxySG and CAS with MAA or Security Analytics
`Mail Threat Defense with the MAA or Security Analytics
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`Blue Coat now moves to strike Finjan’s infringement contentions with respect to the three
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`patents. Blue Coat asserts that “all of the products accused for [the three] Patents were either
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`directly accused in [Blue Coat I] or the accused functionalities of the accused products were well-
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`known to Finjan . . . .” Dkt. No. 89, at 4. Several of the products currently accused were directly
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`accused in Blue Coat I or were the subject of Finjan’s denied request to amend its infringement
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`contentions there. Other products, Blue Coat asserts, are “essentially the same” as products
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`1 Amendments to infringement contentions are only permitted for “good cause.” O2 Micro Int’l
`Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006). In the Northern
`District, good cause “require[s] a showing that the party seeking leave to amend acted with
`diligence in promptly moving to amend when new evidence is revealed in discovery.” Id. at 1363.
`2 Patent Local Rule 3-1 states that infringement contentions must contain statements of each claim
`of each patent in suit that is allegedly infringed. For each asserted claim, the contentions must
`contain each accused “apparatus, product, device, process, method, act, or other instrumentality . .
`. of each opposing party of which the party is aware.” Patent L.R. 3-1(b).
`3 Dkt. No. 107, at 4-5.
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 3 of 11
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`accused in Blue Coat I, in that Finjan only accuses functionalities that were the subject of the prior
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`case.4 Id. at 5-8. Blue Coat argues that Finjan’s contentions should be stricken because (1) they
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`represent a collateral attack on the court’s order in Blue Coat I denying leave to amend Finjan’s
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`infringement contentions, and (2) the accused products are “the same or essentially the same” as
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`the accused products in Blue Coat I, and so res judicata should apply to preclude these claims. Id.
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`at 9.
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`Finjan responds that its infringement contentions, for the most part, accuse products and
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`functionalities that “did not exist” when Finjan asserted its infringement contentions in Blue Coat
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`I. Dkt. No. 106, at 1. For the other contentions—those which Finjan sought to include in Blue
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`Coat I—Finjan asserts that the order denying leave to amend did not bar Finjan from pursuing
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`those claims in a separate action. Id.
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`Counsel for the parties appeared before the court for a hearing on this motion on
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`November 15, 2016.
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`DISCUSSION
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`The Federal Rules of Civil Procedure provide that “[t]he court may strike from a pleading
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`an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R.
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`Civ. P. 12(f). Motions to strike are intended to enable the court and the parties to “avoid the
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`4 Blue Coat summarizes its arguments regarding the relationships between its products and the
`accusations against them in the following table (Dkt. No. 89, at 16):
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`Case 1 Accused Products
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`Case 2 Accused Products
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`The ‘844, ‘731, and ‘968 Patents
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`ProxySG
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`ProxySG
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`Content Analysis System
`(“CAS”)
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`Content Analysis
`System (“CAS”)
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`Advanced Security Gateway
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`Malware Analysis
`Appliances (“MAA”)
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`Malware Analysis Appliances (“MAA”)
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`WebPulse Service
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`WebPulse Service
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`Global Intelligence
`Network
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`Web Security Service
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`MailThreat BLADE
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`WebThreat BLADE
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`FileThreat BLADE
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`Security Analytics
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`3
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`Mail
`Threat
`Defense
`(“MTD”)
`(only
`MAA and
`CAS
`functions
`accused)
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 4 of 11
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`expenditure of time and money that must arise from litigating spurious issues by dispensing with
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`those issues prior to trial.” Townshend v. Rockwell Int’l Corp., No. C99-0400SBA, 2000 WL
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`433505, at *4 (N.D. Cal., Mar. 28, 2000) (quoting Sidney-Vinstein v. A.H. Robbins, Co., 697 F.2d
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`880, 885 (9th Cir. 1983)). Motions to strike should only be granted “if it is clear that the matter to
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`be stricken can have no possible bearing upon the subject matter of the litigation.” Id.
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`Blue Coat essentially has two arguments supporting its motion to strike: that the current
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`infringement contentions are an impermissible collateral attack on the court’s order denying Finjan
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`leave to amend its infringement contentions in Blue Coat I, and that Finjan is precluded from
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`asserting the three patents against Blue Coat’s products because the products are essentially the
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`same as those accused in Blue Coat I. The court addresses the impermissible collateral attack
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`argument first.
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`A party may not use a second action to reverse a decision in a prior action. Glitsch, Inc. v.
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`Koch Eng’g Co., 216 F.3d 1382, 1384 (Fed. Cir. 2000). “When a court enters an order that a party
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`does not like, the party’s recourse is to seek relief on appeal; it is not appropriate for the party to
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`contest the court’s order by filing a new action . . . challenging the court’s ruling in the first case.”
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`Id.
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`The parties cite two competing lines of cases discussing the prohibition on impermissible
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`collateral attacks. In the first, favored by Blue Coat, courts have held that subsequent actions
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`represented impermissible collateral attacks on orders in prior actions that were still ongoing. For
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`example, in Icon-IP PTY Ltd. v. Specialized Bicycle Components, Inc. [“Icon II”], the court held
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`that a party’s infringement contentions against new bicycle seat models were an impermissible
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`collateral attack on the court’s denial of leave to amend the infringement contentions in Icon I to
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`include those new models. No. 13-cv-03677-JST, 2013 WL 10448869, at *1-2 (N.D. Cal., Oct.
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`22, 2013). The court noted that, if it had allowed the second action to continue, it would likely
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`have had to consolidate it with the first action, and this consolidation would have “negated, and
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`essentially reversed” the Icon I order. Id. at *2.
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`In the line of cases favored by Finjan, courts held that prior court orders denying leave to
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`amend infringement contentions did not preclude separate future actions alleging the same
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`Northern District of California
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 5 of 11
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`infringement contentions where the second actions would not effectively reverse or negate the
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`orders in the prior actions. Finjan cites Fujitsu Limited v. Tellabs Operations, Inc. as an example.
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`No. 13-C-3229, 2013 WL 361810 (N.D. Ill., Jan. 20, 2013). In that case, the court held that a
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`second action alleging infringement based on new products did not represent an impermissible
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`collateral attack on the court’s order denying leave to include those new products in amended
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`infringement contentions in an earlier suit. The court in Fujitsu reasoned that the earlier court “did
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`not rule that Fujitsu Limited was forever barred from suing” based on those claims. Id. at *4. A
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`recent Northern District decision has followed Fujitsu. In that case, the court held that there was
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`no collateral attack on an earlier opinion where the prior order did not explicitly bar the plaintiff
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`from alleging infringement with respect to new products, even when the prior case was still
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`pending. Avago Technologies General IP v. Asustek Computer, Inc., No. 15-cv-04525-EMC,
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`2016 WL 1623920, at *2 (N.D. Cal., Apr. 25, 2016).
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`Here, the court is persuaded that, as far as the collateral attack argument is concerned, the
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`present situation is more similar to Fujitsu than to Icon. The court does not read the order in Blue
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`Coat I denying Finjan leave to amend its infringement contentions with respect to ProxySG, CAS,
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`and MAA to prohibit Finjan from accusing these products in subsequent suits. And there is no
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`concern here regarding reversing or negating the court’s order in Blue Coat I, as there has been a
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`final judgment on the merits in that suit.
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`That the present suit is not an impermissible collateral attack on the order in Blue Coat I,
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`however, does not mean that Finjan is home free: it may still be precluded from asserting some or
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`all of its new infringement contentions for other reasons, to which the court now turns.
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`The doctrine of res judicata applies when there is “‘(1) an identity of claims; (2) a final
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`judgment on the merits; and (3) identity or privity between parties.’” Stewart v. U.S. Bancorp,
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`297 F.3d 953, 956 (9th Cir. 2001). The parties do not dispute that the second and third elements
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`exist here. For the first element, in the patent infringement context (for which Federal Circuit law
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`governs), claims are identical “when ‘the accused device in the action before the court is
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`‘essentially the same’ as the accused device in a prior action between the parties that was resolved
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`by a judgment on the merits.” Icon-IP PTY Ltd., 2013 WL 10448869, at *3 (quoting Acumed LLC
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`Northern District of California
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 6 of 11
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`v. Stryker Corp., 525 F.3d 1319, 1324 (Fed. Cir. 2008)).5 Accused products are essentially the
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`same when “the differences between them are merely ‘colorable’ or ‘unrelated to the limitations in
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`the claim of the patent.’” Id. The party seeking to apply preclusion bears the burden of showing
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`that the products at issue are essentially the same. Id.
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`The related doctrine of claim-splitting, a “subspecies” of claim preclusion, may also apply
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`to bar a litigant’s claims. Icon-IP PTY Ltd., 2013 WL 10448869, at *2-3. Claim-splitting is
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`different from res judicata in that it does not require a final judgment on the merits in the first suit.
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`Id. But like res judicata, claim-splitting applies when the two products are the same or essentially
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`the same. Fujitsu Ltd. v. Tellabs Operations, Inc., No. 13-C-3229, 2013 WL 361810, at *1, 3
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`(N.D. Ill., Jan. 20, 2013) (“Because the accused products are exactly the same in this scenario
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`[despite the plaintiff alleging new infringement theories], these claims arise from the same
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`transactional facts and cannot be brought in a separate lawsuit between the same two parties);
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`Adaptix, Inc. v. Amazon, Inc., No. 15-cv-01379-PSG, 2015 WL 4999944, at *11 (N.D. Cal., Aug.
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`21, 2015) (precluding plaintiff from litigating infringement contentions that were brought or could
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`have been brought in earlier cases).
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`Blue Coat argues that res judicata should bar each of Finjan’s infringement contentions
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`because (1) ProxySG, CAS, MAA, and WebPulse were accused in Blue Coat I and there is thus an
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`identity of claims against these products, and (2) Secure Analytics, Global Intelligence Network,
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`Web Security Service, Advanced Security Gateway, and Mail Threat Defense are all “essentially
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`the same” as the products accused in Blue Coat I because the accused functionalities in this case
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`are the same as those in the prior case. Finjan responds that res judicata should not apply because
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`(1) Advanced Security Gateway and Mail Threat Defense are new products that did not exist at the
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`relevant time during Blue Coat I, (2) new sandboxing technologies were added into (and are now
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`being accused in) WebPulse and Web Security Service, and (3) ProxySG with CAS and MAA,
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`though asserted in Blue Coat I, were not precluded by the court’s order in that case.
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`5 Acumed clarifies that a claim for patent infringement is barred by claim preclusion when it
`“arises from the same transactional facts as a prior action.” Acumed LLC v. Stryker Corp., 525
`F.3d 1319, 1324 (Fed. Cir. 2008). “[T]wo claims for patent infringement do not arise from the
`same transactional facts unless the accused devices in each claim are ‘essentially the same.’” Id.
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 7 of 11
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`The court is persuaded that the doctrine prohibiting claim-splitting applies to preclude
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`Finjan’s infringement contention against ProxySG and CAS with MAA. This combination of
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`products was accused in Blue Coat I (of infringing a patent not at issue in the present motion), and
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`Finjan does not deny that this suit involves the same combination of products. See Dkt. No. 106-
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`4, at p. 16. Additionally, the three patents at issue here were also asserted in the prior suit. In fact,
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`the court in Blue Coat I denied Finjan leave to amend its infringement contentions to assert these
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`patents against these products because Finjan failed to demonstrate that it acted with diligence.
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`The court’s order in Blue Coat I suggests that Finjan, had it acted with diligence, could have
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`asserted these patents against these products in Blue Coat I. Even though no final decision on the
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`merits was reached for these infringement contentions in Blue Coat I, no such decision is
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`necessary for claim-splitting to apply.6 To sum up, with respect to ProxySG and CAS with MAA,
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`the products and patents are exactly the same as those in the first suit, and Finjan could have
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`brought its infringement contentions accusing these products of infringing these patents then.
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`Finjan is thus not entitled to a second bite at this apple, and the court grants Blue Coat’s motion to
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`strike as to this infringement contention.
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`Finjan has also accused “ProxySG and CAS with MAA or Security Analytics” in two
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`separate infringement contentions. To the extent that these infringement contentions rely on only
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`“ProxySG and CAS with MAA” to allege infringement, Finjan is precluded for the reasons
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`described above. However, as Security Analytics was not accused in the prior suit, and Blue Coat
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`has not proved that it is the same or essentially the same as products accused in the prior suit,7
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`Finjan remains free to accuse it, including in combination with products that Finjan could have
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`accused previously. Thus, the court grants-in-part Blue Coat’s motion to strike the “ProxySG and
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`6 See Robert A. Matthews, Jr., 6 Annotated Patent Digest § 38:10 (Jan. 2017) (“A denial of a
`motion to amend can operate as a final judgment on the merits for the claim sought to be added by
`the proposed amendment, and thereby create claim preclusion if the same claim is sought to be
`asserted in a latter suit. The theory stems [from] the goal of preventing duplicative litigation of
`claims that could have been brought in the earlier case.”) (citing Crystal Import Corp. v. AVID
`Identification Sys., Inc., 582 F. Supp. 2d 1166 (D. Minn. 2008) (applying claim preclusion when a
`prior denial of a motion to amend was based on untimeliness, and ruling that the prior denial
`operated as a final judgment on the merits)).
`7 Blue Coat’s assertion that the previously accused BLADE products are part of Security Analytics
`does not sufficiently demonstrate that the latter is no more than the sum of the former parts.
`7
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`Northern District of California
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`United States District Court
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`CAS with MAA or Security Analytics” infringement contentions, but Finjan remains free to
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`accuse “ProxySG and CAS with . . . Security Analytics.” The court grants Finjan leave to amend
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`these two infringement contentions (for the limited purpose of addressing this decision) within 30
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`days of the date of this order.
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`For the remainder of the infringement contentions, the court is not persuaded that res
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`judicata acts as a bar. Claim preclusion only bars “the particular infringing acts . . . that are
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`accused in the first action or could have been made subject to that action.” Brain Life, LLC v.
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`Elekta, Inc., 746 F.3d 1045, 1054 (Fed. Cir. 2014) (quoting Aspex Eyewear Inc. v. Marchon
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`Eyewear, Inc., 672 F.3d 1335, 1343 (Fed. Cir. 2012)). Claim preclusion will not bar claims that
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`could not have been asserted in the prior lawsuit because the acts of infringement had not yet
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`occurred at that time. Id. These principles apply “even when the products are the same in both
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`suits.” Id. at 1056. In the patent context, there is an exception to these rules for adjudged non-
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`infringers. Under the Kessler doctrine, parties may be precluded from filing suit against a product
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`that has been found not to infringe a patent; this allows the non-infringer to avoid “repeated
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`harassment for continuing its business as usual.” Id.; see also Kessler v. Eldred, 206 U.S. 285
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`(1907). Kessler does not apply, however, when a product has previously been adjudged to
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`infringe.
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`Finjan cites Adobe Systems Inc. v. Wowza Media Systems, LLC, 72 F. Supp. 3d 989 (N.D.
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`Cal. 2014), to support its argument that res judicata does not bar its infringement contentions
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`accusing new products and technologies, and the court finds this case instructive. In Adobe, the
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`plaintiff sued the defendant for patent infringement, and the defendant released a new version of
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`an accused product after final infringement contentions were due. Id. at 991. The plaintiff filed an
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`expert report involving the new version, but the court held that the infringement contentions “did
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`not reach” the recently released version. Id. at 991-92. The plaintiff then sued the defendant in a
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`second suit, accusing the newer versions of the product. Id. The court in the second suit held that
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`res judicata did not bar the plaintiff from accusing the new versions, because the plaintiff “was not
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`attempting to circumvent its own lack of diligence” in the prior suit, but rather “attempting to add
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`to the litigation claims that had accrued following the submission of the infringement
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`8
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 9 of 11
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`contentions.” Id. at 995. The court noted that res judicata “does not bar the assertion of new
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`rights acquired during the action which might have been, but were not litigated.” Id., (quoting
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`Aspex Eyewear, Inc. v. Marchon Eyewear, Inc., 672 F.3d 1335, 1345 (Fed. Cir. 2012)).
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`Advanced Security Gateway was released after the trial in Blue Coat I, and the Mail Threat
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`Defense product was released after the close of fact discovery in that litigation. Hannah Decl.,
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`Exs. 11, 12. Additionally, Blue Coat introduced a new form of “sandboxing” technology into
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`WebPulse and Web Security Service in March 2015. Hannah Decl., Exs. 13, 14. Expert
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`Discovery in Blue Coat I closed on February 27, 2015, before all of these events. 13-cv-03999-
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`BLF, Dkt. Nos. 98, 143. As Finjan did not have the opportunity to accuse the aforementioned
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`products and technologies in the prior suit, and as their alleged infringement was not litigated in
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`the prior suit, under Brain Life and Adobe, Finjan is not precluded from accusing them now.
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`Blue Coat’s arguments that Finjan should nevertheless be precluded from accusing these
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`products are unavailing. Blue Coat argues that Finjan’s “new products” argument fails because
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`Advanced Security Gateway and Mail Threat Defense are “essentially the same” as the previously
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`accused products. As explained above, however, the accused products released after the close of
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`discovery in the prior suit represent new claims that were not previously litigated. See Lawlor v.
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`Nat’l Screen Service Corp., 349 U.S. 322, 327-28 (1955) (“While the 1943 judgment precludes
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`recovery on claims arising prior to its entry, it cannot be given the effect of extinguishing claims
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`which did not even then exist and which could not possibly have been sued upon in the previous
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`case.”); Brain Life, LLC v. Elekta, Inc., 746 F.3d 1045, 1054-56 (Fed. Cir. 2014). Additionally,
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`the fact that Blue Coat I ended in a finding of infringement makes this case more similar to Adobe
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`Systems, Inc. v. Wowza Media Systems, LLC, 72 F. Supp. 3d 989, 995 (N.D. Cal. 2014) (finding
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`that res judicata did not bar a claim against a new product where there had been no prior non-
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`infringement ruling) than to Adaptix, Inc. v. Amazon, Inc., No. 15-cv-01379-PSG, 2015 WL
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`4999944, at *11 (N.D. Cal., Aug. 21, 2015) (applying res judicata as a bar where there had been a
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`prior non-infringement judgment).8
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`8 Nystrom, on which Adaptix relies, also involved a prior non-infringement judgment. Nystrom v.
`Trex Co., Inc., 580 F.3d 1281, 1282, 1284 (Fed. Cir. 2009).
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`Northern District of California
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`United States District Court
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 10 of 11
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`Blue Coat next argues that Finjan’s “new technology” argument fails because sandboxing
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`existed in Blue Coat’s products prior to the close of fact discovery in Blue Coat I. Though Blue
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`Coat asserts that a sandboxing functionality existed within its products during Blue Coat I, Dkt.
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`No. 118, Finjan argues that the new sandboxing functionality inserted into the accused products
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`meets the claim limitations in new ways. At this point in the litigation, the court lacks the
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`information needed to determine if the new sandboxing functionality is essentially the same as the
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`previously existing sandboxing functionality. Regardless, to the extent that the new functionality
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`was added after the close of fact discovery in the prior suit, the court is persuaded that Finjan is
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`not precluded from accusing products that have incorporated the new functionality (i.e., WebPulse
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`and Web Security Service). It would be unjust to preclude Finjan for failing to predict how Blue
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`Coat would combine functionalities in its products in the future.
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`The court thus determines that Finjan is not precluded from accusing WebPulse, Web
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`Security Service, Advanced Security Gateway, or Mail Threat Defense.
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`CONCLUSION
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`For the reasons stated above, the court grants Blue Coat’s motion to strike with respect to
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`some of Finjan’s infringement contentions and denies it with respect to others. The infringement
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`Motion to Strike Disposition
`DENIED
`DENIED
`DENIED
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`GRANTED-IN-PART
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`DENIED
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`DENIED
`DENIED
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`GRANTED
`DENIED
`DENIED
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`GRANTED-IN-PART
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`Patent
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`’844
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`’968
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`’731
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`Northern District of California
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`contentions and their dispositions are summarized in the following table.
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`Accused Products
`WebPulse
`Web Security Service
`Advanced Security Gateway with
`the MAA or Security Analytics
`ProxySG and CAS with MAA or
`Security Analytics
`Mail Threat Defense with the MAA
`or Security Analytics
`Web Security Service
`Advanced Security Gateway with
`the MAA
`ProxySG and CAS with MAA
`Web Security Service
`Advanced Security Gateway with
`the MAA or Security Analytics
`ProxySG and CAS with MAA or
`Security Analytics
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`Case 5:15-cv-03295-BLF Document 181 Filed 02/02/17 Page 11 of 11
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`Mail Threat Defense with the MAA
`or Security Analytics
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`DENIED
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`IT IS SO ORDERED.
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`Dated: 2/2/2017
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`HOWARD R. LLOYD
`United States Magistrate Judge
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