Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 1 of 7
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`
`
`PAUL ANDRE (State Bar No. 196585)
`pandre@kramerlevin.com
`LISA KOBIALKA (State Bar No. 191404)
`lkobialka@kramerlevin.com
`JAMES HANNAH (State Bar No. 237978)
`jhannah@kramerlevin.com
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 752-1700
`Facsimile: (650) 752-1800
`
`Attorneys for Plaintiff
`FINJAN, INC.
`
`
`
`
`IN THE UNITED STATES DISTRICT COURT
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`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`
`
`Plaintiff,
`
`v.
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`SAN JOSE DIVISION
`FINJAN, INC., a Delaware Corporation,
`Case No.: 15-cv-03295-BLF-SVK
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`
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`PLAINTIFF FINJAN INC.’S
`
`OPPOSITION TO DEFENDANT’S
`MOTION IN LIMINE NO. 3 TO
`EXCLUDE EVIDENCE AND
`ARGUMENT CONCERNING
`IRRELEVANT PROCEEDINGS
`
`
`October 5, 2017
`Date:
`Time:
`1:30 pm
`Place: Courtroom 3, 5th Floor
`Judge: Hon. Beth Labson Freeman
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`
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`BLUE COAT SYSTEMS LLC, a Delaware
`Corporation,
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`
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`
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`Defendant.
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`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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`

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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 2 of 7
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`Blue Coat’s Motion in Limine No. 3 should be denied because it seeks to exclude relevant
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`evidence of jury verdicts and PTO decisions that this Court has previously held admissible. Jury
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`verdicts from prior litigations between the same parties or involving the same patents are probative, at
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`minimum, to issues of damages and willful infringement at trial. To be clear, Finjan does not seek to
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`introduce any verdicts from any prior cases to prove infringement or validity in this case. But the
`probative value of the verdicts in the Blue Coat I, Secure Computing, and Sophos1cases far outweigh
`any potential prejudice. These verdicts involve the same parties and overlapping patents, and experts on
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`both sides rely on these verdicts to calculate damages in this case. The Blue Coat I verdict is especially
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`probative, as it also proves that Blue Coat continued to willfully infringe Finjan’s patents in spite of a
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`verdict declaring that it was infringing some of those same patents – and also this Court’s post-trial
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`order finding that the evidence supported that verdict.
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`In addition, many of the PTO decisions that Blue Coat seeks to exclude are necessary at trial to
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`rebut evidence of invalidity and prior art references that Blue Coat will introduce, in an attempt to
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`invalidate the ‘086 and ‘408 Patents. These decisions, and Blue Coat’s attempts to invalidate the
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`asserted patents before the PTO, are also probative on Blue Coat’s willful infringement of those patents
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`and the jury should take them into consideration. Any concerns that Blue Coat has about potential
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`prejudice stemming from the three prior verdicts or these PTO decisions can be addressed with an
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`appropriate limiting instruction, similar to those that this Court has entered in the past. Thus, the
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`probative value of this evidence far outweighs any slight potential for prejudice. And to wholly exclude
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`it in lieu of a limiting order would unnecessarily prejudice Finjan’s ability to present its case for
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`damages and willful infringement, and to rebut invalidity evidence using the PTO decisions, at trial.
`Final Verdicts from Secure Computing, Blue Coat I, and Sophos Are Admissible
`A.
`Consistent with Federal Circuit precedent, this Court has held that final verdicts from prior
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`litigations are probative and admissible at trial, especially where those verdicts involved the same
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`parties or patents as the case at bar. In fact, jury verdicts from prior litigations are especially
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`admissible at trial to prove damages and willful infringement. See Applied Med. Resources Corp. v.
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`1 Finjan adopts the same abbreviations herein as defined in Blue Coat’s Motion in Limine No. 3.
`1
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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`

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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 3 of 7
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`U.S. Surgical Corp., 435 F.3d 1356, 1366 (Fed. Cir. 2006) (affirming the admission of a prior verdict
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`between the same parties on the same patent, as relevant to the reasonable royalty analysis, willful
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`infringement, and the Defendant’s state of mind on both of those issues); Maxwell v. J. Baker, Inc., 86
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`F.3d 1098, 1109-10 (Fed. Cir. 1996) (holding “[t]he objective of the reasonable royalty calculation is
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`to determine the amount necessary to adequately compensate for an infringement” and it is proper for
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`the fact finder to consider additional factors outside of Georgia-Pacific including “[t]he fact that an
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`infringer had to be ordered by a court to pay damages, rather than agreeing to a reasonable royalty”)
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`(citations omitted). Blue Coat’s attempt to exclude this evidence, involving damages for the Asserted
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`Patents or related patents, particularly one involving the same parties, is not supported by the law.
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`See, e.g., Applied Medical, 435 F.3d at 1366; Blue Coat I, infra, Dkt. No. 367 at 12; see also
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`Declaration of Hannah Lee (“Lee Opp. Decl.”) filed herewith, Ex. 23, Sophos, infra, Dkt. No. 262 at
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`16. And contrary to Blue Coat’s assertions, Finjan has no intention of using these prior verdicts to
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`prove liability or validity; it has separate proofs for these issues. Finjan agrees that these prior
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`verdicts are not relevant to infringement or validity, but they are relevant to damages and Blue Coat’s
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`willful infringement under precedent from this Court and the Federal Circuit. Id.
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`In Blue Coat I, this Court denied Blue Coat’s motion in limine to exclude the Secure
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`Computing verdict, finding that the prior verdict was relevant to damages. See Blue Coat I, Dkt. No.
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`367 at 12 (holding the Secure Computing verdict was relevant, especially considering two of the six
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`patents-at-issue overlapped). Similarly, in another case in this District, Sophos, the Court permitted
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`evidence of prior patent litigation between the parties in the District of Delaware. Lee Opp. Decl., Ex.
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`23, Sophos, Dkt. No. 262 at 16 (finding that the verdict from a prior action between Finjan and
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`Sophos admissible because it was relevant to damages, the relationship and history between the
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`parties, the reasonable royalty rate, and proving willful infringement). Here, evidence of the Blue
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`Coat I verdict is especially relevant because the parties in these actions are the same and three of
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`Finjan’s eight Asserted Patents overlap. See Motion at 3:3-4. Blue Coat’s damages expert relies on
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`the verdict from Blue Coat I for his opinion that Blue Coat already paid damages for an accused
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`product. See, e.g., Lee Opp. Decl., Ex. 24, Thomas Rpt. at 98 ¶ 250 (“it would appear that this
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`2
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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`

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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 4 of 7
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`method is double counting damages for WebPulse with the jury award in Blue Coat I”). He also
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`states the hypothetical negotiation date for certain Asserted Patents is September 22, 2015, which
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`about two months after the Blue Coat I verdict. Id. at 31-32. Therefore, according to the date set
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`forth by Blue Coat’s expert, the Blue Coat I verdict is at least relevant to “Defendant’s state of mind
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`entering the hypothetical negotiation and to the parties’ relative bargaining strength” at the time of the
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`hypothetical negotiation for this case. See id.; see also Blue Coat I, Dkt. No. 367 at 12:18-22 (“As
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`Plaintiff properly notes, the jury verdict in that case occurred around the time of the hypothetical
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`negotiation in this case and involved two of the six patents-in-suit here.”). Blue Coat’s argument that
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`the Blue Coat I is irrelevant is belied by the fact that its own damages expert relies on the verdict to
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`support his opinions. Lee Opp. Decl., Ex. 24, Thomas Rpt. at 98 (discounting damages as a result of
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`the Blue Coat I jury award). More importantly, the Blue Coat I verdict is directly relevant to Finjan’s
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`allegations of willful infringement because it shows that Blue Coat continued to infringe Finjan’s
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`patents, including patents that it was found to infringe in Blue Coat I, even well after the jury’s verdict
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`of infringement and the Court’s post-trial order that there was substantial evidence supporting that
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`verdict. See Lee Opp. Decl., Ex. 23, Sophos, Dkt. No. 262 at 16 (admitting a prior verdict between
`the parties because it was relevant to willful infringement).2
`Similarly, the Secure Computing verdict is also relevant to damages in the instant matter. Blue
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`Coat does not dispute that, in Secure Computing, the jury awarded Finjan damages for three related
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`patents to the Asserted Patents based on a reasonable royalty of between 8-16%, which is a royalty
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`rate Finjan has used for its licensing activities, including in this action and in the prior litigation
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`between these parties. Dkt. No. 305-9, Declaration of Robin L. Brewer, Ex. 1, Meyer Rpt. at 32 (“the
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`rates used in the litigation settlements to determine the lump sum payments closely match… the
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`reasonable royalty rates set by the jury in the Secure Computing litigation, which were also utilized in
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`the Blue Coat and Sophos jury trials”); id. at 59 (discussing use of 8 to 16 percent in Finjan’s
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`2 The fact that the Blue Coat I verdict is on appeal does not alter its relevance, and the only case Blue
`Coat cites for this proposition is inapposite. Motion at 2:27-28. In Applied Materials, Inc. v.
`Advanced Semiconductor Materials Am., Inc., the Court excluded evidence of pending litigations from
`being asserted only for the purposes of proving liability. No. C 92-20643 RMW, 1995 WL 261407, at
`*7 (N.D. Cal. Apr. 25, 1995).
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`3
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 5 of 7
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`licensing negotiations). Blue Coat’s arguments regarding the “25 percent rule” have nothing to do
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`with Dr. Meyer’s analysis of the Secure Computing case, and Dr. Meyer’s opinions are not based on
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`the 25 percent rule to calculate damages. See Motion at 4:4-9. Moreover, it was determined that the
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`jury did not rely on the 25 percent rule(also known as the “rule of thumb”) when calculating damages
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`in Secure Computing, so there is no support for Blue Coat’s argument. Finjan, Inc. v. Sophos, Inc.,
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`No. 14-cv-01197-WHO, 2016 WL 4268659, at *5 (N.D. Cal. Aug. 15, 2016); Finjan, Inc. v. Secure
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`Computing Corp., 626 F.3d 1197, 1212 (Fed. Cir. 2010) (affirming damages award based on 8-16%
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`royalty rates because the jury determined a lesser amount). This Court already rejected this argument
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`made in Blue Coat I, finding that the outcome from the Secure Computing case was relevant “to the
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`jury’s consideration of damages.” Blue Coat I, Dkt. No. 367 at 12.
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`Finally, the Sophos verdict is relevant to the instant matter, as two of the seven Asserted
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`Patents, namely the ‘844 and ‘494 Patents, were also asserted in that case. In Sophos, the jury
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`awarded $15 million for infringement of Finjan’s patents, which was consistent with an 8-16% royalty
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`rate. Contrary to Blue Coat’s characterization, the Court in Sophos did not state there was no support
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`for the damages award, but rather, the $15 million damages award was “within the range of Finjan’s
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`prior licensing agreements and jury awards” that was presented at trial. Lee Opp. Decl., Ex. 25,
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`Sophos, Dkt. No. 453 at 22. It is improper to ignore the most relevant licensing agreements involving
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`the Patents-In-Suit, even where those agreements arose out of litigation. There was nothing
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`speculative about the verdict in Sophos, which involved some of the same patents and is probative of
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`damages. See Maxwell, supra, 86 F.3d at 1109-10 (holding the fact finder may consider damages
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`ordered by a court); see also Blue Coat I, Dkt. No. 367 at 12 (admitting a prior verdict where two of
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`the six patents-at-issue overlapped); see also Lee Opp. Decl., Ex. 23, Sophos, Dkt. No. 262 at 16
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`(admitting a prior verdict involving the same parties). Therefore, the Court should deny Blue Coat’s
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`motion in limine.
`B.
`Finjan should be permitted to introduce final decisions of the PTO at trial because they are
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`Evidence Regarding Final PTO Decisions is Proper
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`probative evidence regarding validity issues and “must be considered, particularly when the
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`4
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
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`Case No. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 6 of 7
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`challenge…was based on the same prior art as is at issue in the litigation.” Volterra Semiconductor
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`Corp. v. Primarion, Inc., No. C-08-05129 JCS, 2011 WL 4079223, at *6 (N.D. Cal. Sept. 12, 2011)
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`(holding the plaintiff was “entitled to introduce evidence that the PTO upheld the claims of the
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`[asserted] patents over the same prior art”).
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`The PTO issued final decisions denying institution of IPRs and Final Written Decisions
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`upholding the validity of asserted claims in five of the Asserted Patents. These Decisions are highly
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`probative of validity because Blue Coats seeks to assert the same prior art references at trial that it
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`asserted before the PTO. Blue Coat only seeks to exclude these Decisions because they were
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`unsuccessful in having the PTO determine that the asserted claims of these patents were invalid. But
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`under precedent from this Court and the Federal Circuit, these PTO proceedings must be considered.
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`Volterra, supra, 2011 WL 4079223, at *6 (citing PowerOasis v. T–Mobile USA, Inc., 522 F.3d 1299,
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`1304 (Fed. Cir. 2008)).
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`Finally, there is no likelihood of jury confusion or prejudice because the Court can provide
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`appropriately jury instructions explaining the PTO proceedings. Univ. Elecs., Inc. v. Universal
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`Remote Control, Inc., No. SACV 12-00329 AG (JPRx), 2014 WL 8096334, at *7 (C.D. Cal. Apr. 21,
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`2014) (denying MIL because “[a]ny potential confusion [regarding the PTO’s rejection of
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`Defendant’s IPR petition] can be addressed by appropriate jury instructions”); see also Halo Elecs.,
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`Inc. v. Pulse Elecs., Inc., No. 2:07-cv-00331-PMP, 2013 WL 4458754, at *15 (D. Nev. Aug. 16,
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`2013), aff'd, 769 F.3d 1371 (Fed. Cir. 2014) (“[t]he Court’s instructions [regarding final PTO
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`decisions on reexam] during trial and at the close of evidence cured the potential prejudice”);
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`Fresenius Med. Care Holdings, Inc. v. Baxter Int’l, Inc., No. C 03-1431 SBA, 2006 WL 1330003, at
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`*4 (N.D. Cal. May 15, 2006) (permitting reexamination decisions because “any prejudicial effect on
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`the jury could be alleviated by the appropriate jury instructions”); Mendenhall v. Cedarapids, Inc., 5
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`F.3d 1557, 1563-64 (Fed. Cir. 1993) (upholding the district court’s jury instruction on “what weight to
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`give the Patent Office’s determination” and “the evidence presented to the Patent Office.”). Thus, the
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`probative value of PTO decisions far outweighs any potential for prejudice, and under precedent from
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`this Court and the Federal Circuit, the jury must be allowed to consider this evidence.
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`5
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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`

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`Case 5:15-cv-03295-BLF Document 328 Filed 09/28/17 Page 7 of 7
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`DATED: September 28, 2017
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`Respectfully submitted,
`
`
`By: /s/ Lisa Kobialka
`
`
`Paul J. Andre (State Bar. No. 196585)
`Lisa Kobialka (State Bar No. 191404)
`James Hannah (State Bar No. 237978)
`KRAMER LEVIN NAFTALIS
` & FRANKEL LLP
`990 Marsh Road
`Menlo Park, CA 94025
`Telephone: (650) 752-1700
`Facsimile: (650) 752-1800
`pandre@kramerlevin.com
`lkobialka@kramerlevin.com
`jhannah@kramerlevin.com
`
`Attorneys for Plaintiff
`FINJAN, INC.
`
`6
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 3
`
`Case No. 15-cv-03295-BLF-SVK
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