Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 1 of 7
`
`
`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
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`
`
`
`Plaintiff,
`
`v.
`
`SAN JOSE DIVISION
`FINJAN, INC., a Delaware Corporation,
`Case No.: 15-cv-03295-BLF-SVK
`
`
`
`PLAINTIFF FINJAN INC.’S
`
`OPPOSITION TO DEFENDANT’S
`MOTION IN LIMINE NO. 4 RE
`IRRELEVANT AGREEMENTS
`
`Date:
`October 5, 2017
`
`Time:
`1:30 pm
`Place: Courtroom 3, 5th Floor
`Judge: Hon. Beth Labson Freeman
`
`
`
`BLUE COAT SYSTEMS LLC, a Delaware
`Corporation,
`
`
`
`
`
`Defendant.
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`
`
`
`
`REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED
`
`
`
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 2 of 7
`
`
`Finjan’s OEM Agreement with Blue Coat and Finjan’s patent license agreements for the
`
`Asserted Patents and related patents are probative of the hypothetical negotiation and the factors from
`
`Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970) used for
`
`determining reasonable royalty damages. Finjan’s OEM Agreement is probative of the beginnings of
`
`Finjan’s relationship with Blue Coat that continued over the years, which eventually culminated in
`
`litigation, and is evidence of the parties’ state of mind at the hypothetical negotiation. The Microsoft
`
`agreement, which licenses the Asserted Patents, is probative of issues of secondary considerations of
`
`nonobviousness, the early interest in Finjan’s patented technology and the financial support Finjan
`
`received for its technology. Further, Finjan’s patent license agreements are probative of Georgia
`
`Pacific Factors No. 1 and 2 (“royalties received by the patentee for the licensing of the patent in suit”
`
`and “rates paid by the licensee for the use of other patents comparable to the patent in suit”) because
`
`they are licenses to Finjan’s Asserted Patents and related patents. 318 F. Supp. at 1120. Like the OEM
`
`Agreement, they also provide context and relevant information regarding royalties for the Asserted
`
`Patents, the parties’ relationship and how the parties would negotiate a license.
`
`Blue Coat seeks to exclude the overwhelming majority of Finjan’s patent license agreements,
`
`broadly calling them settlement agreements, even though the overwhelming majority of them are not
`
`borne out of litigation. These agreements, however, are licenses for the Asserted Patents and related
`
`patents, and Finjan accounts for how they are being used and the specific circumstances for each
`
`agreement. The Federal Circuit has recognized that the “most reliable license” for assessing a
`
`reasonable royalty can be one that arises out of litigation. ResQNet.com v. Lansa, Inc., 594 F.3d 860,
`
`872 (Fed. Circ. 2010); Prism Techs. LLC v. Sprint Spectrum L.P., 849 F.3d 1360, 1369-71 (Fed. Cir.
`
`2017) (confirming no error to admit settlement agreement involving other patents and other unrelated
`
`patents despite prejudice objections). Finjan’s jury instruction regarding the appropriate use of
`
`settlement agreements, and the discussion Finjan’s expert will provide at trial regarding the
`
`circumstances surrounding Finjan’s various agreements and how she used them, ensures that Blue Coat
`
`will not be prejudiced.
`
`1
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 3 of 7
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`A.
`
`The OEM Agreement Between Finjan and Blue Coat Evidences the Parties’
`History and Relationship
`Finjan’s 2002 OEM agreement, under which Blue Coat agreed to sell Finjan’s computer
`
`security products, is evidence of Finjan’s relationship over time with Blue Coat. See Dkt. No. 305-9,
`
`Declaration of Robin L. Brewer (“Brewer Decl.”), Ex. 1, Meyer Rpt. at ¶ 65. This history between the
`
`parties as partners and competitors in the computer security market is probative of Finjan’s relationship
`
`with Blue Coat and the considerations the respective parties had at the time of the hypothetical
`
`negotiation, which is part of the analysis for calculating a reasonable royalty. See Georgia-Pacific, 318
`
`F. Supp. at 1120-21.
`
`Blue Coat’s attempt to characterize the OEM agreement as a non-comparable license is a red
`
`herring because the analysis of whether a license is “comparable” is for agreements relied upon for
`
`determining a reasonable royalty. Here, this agreement shows the history and relationship of the parties
`
`and Finjan’s backstory as a company, and is not being relied upon for damages, such that Blue Coat’s
`
`cited law does not apply here. See Motion at 2:17-18 (citing TV Interactive Data Corp. v. Sony Corp.,
`
`No. 10-cv-000475-JCS, Dkt. No. 686, slip op. at *10 (N.D. Cal. Mar. 1, 2013) (Daubert ruling
`
`involving precluding an expert from relying on non-comparable licenses to support his royalty rate)).
`B.
`Because Finjan’s license agreement with Microsoft covers the Asserted Patents in this case, it is
`
`The Microsoft License, Which Licenses the Asserted Patents, Is Probative
`
`probative of wide range of issues, including the early interest in Finjan’s patented technology, the
`
`financial support Finjan received for its technology, Finjan’s licensing of its patents and validity. This
`
`agreement was one of Finjan’s first patent license agreements, and
`
` showing Finjan’s decision to “retain an
`
`increased measure of control over its patents” and also noted
`
`
`
`.
`
`Brewer Decl., Ex. 1, Meyer Rpt. at ¶¶ 66-67.
`
` and decision to license Finjan’s patents
`
`at that time when Finjan was a startup company is probative of Finjan’s development of its patented
`
`technology and third party interest in it.
`
`Furthermore, contrary to Blue Coat’s claim, Dr. Meyer did not claim that the Microsoft
`
`agreement has no value at all. Rather, she testified that she analyzed all the agreements, including the
`
`2
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 4 of 7
`
`
`Microsoft agreement, and identified how it informed her opinion. Declaration of Hannah Lee (“Lee
`
`Opp. Decl.”) filed herewith, Ex. 12, Meyer 5/8/17 Depo Tr. at 122:13-125:7 (testifying that her
`
`testimony was taken out of context and that she could not assign relative importance of the Microsoft
`
`agreement versus other information contained in her report). While this agreement may not be
`
`“informative as to the hypothetical license that would have occurred between Finjan and Blue Coat,”
`
`(Brewer Decl., Ex. 1 at ¶ 112) it is probative of Georgia Pacific Factor 1 which is “royalties received
`
`by the patentee for licensing of the patent in suit, proving or tending to prove an established royalty.”
`
`Id., ¶ 62. For this very reason, this agreement was admitted in other cases, even though Finjan’s expert
`
`in those cases, including in Blue Coat I and Sophos, did not rely upon them.
`
`Also, while finding the Microsoft license fundamentally different because it involved an
`
` addition to a monetary license fee, Dr. Meyer explains that the Microsoft license had an
`
`element common to Finjan’s other license agreements, e.g.,
`
`
`
` Brewer Decl., Ex. 1, Meyer Rpt. at ¶¶ 66-67,
`
`120, 123. Based on the common licensing provision in Microsoft and other licenses, Dr. Meyer
`
`explained that
`
`
`
`, showing Finjan’s intent and policies regarding licensing its
`
`patents, as well as the nature and scope of its licenses. Id.; Georgia-Pacific factor 3 and 4 (“nature and
`
`scope” and restrictions on license and “licensor’s established policy”). Thus, the Microsoft license is
`
`also probative of various Georgia Pacific factors.
`
`Finally, the Microsoft agreement, like the other licenses covering the Asserted Patents, is
`
`probative of secondary considerations of non-obviousness. In re GPAC Inc., 57 F.3d 1573, 1580 (Fed.
`
`Cir. 1995) (“Licenses taken under the patent in suit may constitute evidence of nonobviousness”).
`
`Finjan’s three validity experts, Drs. Jaegar, Goodrich and Lyon, provided opinion testimony regarding
`
`this agreement. Lee Opp. Decl., Ex. 26, Goodrich Reb. Rpt. at ¶¶ 443-47; id. Ex. 27, Dr. Jaeger Reb.
`
`Rpt. at ¶¶ 266-70, id. Ex. 28, Dr. Lyon Reb. Rpt. at ¶¶ 290-93. Thus, it should not be excluded.
`
`C.
`
`Finjan’s Patent License Agreements For the Asserted Patents Are Probative Of
`The Issue of Validity and Damages
`Finjan’s license agreements with Intel/McAfee, Webroot, Websense, F-Secure, Proofpoint,
`3
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 5 of 7
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
` F5, Veracode, Sophos, and Avira are all licenses that cover the
`Avast,
`Asserted Patents, such Blue Coat has no support for its claim that they are “non-comparable.”1 First,
`for the same reasons explained above, they are probative of secondary considerations of
`
`nonobviousness. In re GPAC, 57 F.3d at 1580.
`
`Second, Finjan’s settlement agreements (which are only the Intel, Webroot, Websense,
`
`Proofpoint and Sophos agreements out of the 14 total agreements Blue Coat raised) where the Asserted
`
`Patents are licensed is probative of Georgia Pacific factors 1-4, as they evidence royalties Finjan has
`
`received for the Asserted Patents, rates that licensees are willing to pay for the Asserted Patents, the
`
`scope and restrictions on Finjan’s licenses, and Finjan’s licensing practices. For this reason, Finjan’s
`
`settlement agreements were admitted in prior litigations, including in Blue Coat I and Sophos. Further,
`
`this information regarding Finjan’s licensing practices and Blue Coat’s position for the hypothetical
`
`negotiation provided Dr. Meyer background and the basis for those agreements she found to be the
`
`most informative or relied upon for her opinion. Brewer Decl., Ex. 1, Meyer Rpt. at ¶¶ 109-111.
`
`Settlements are often admissible where they involve the Asserted Patents. Prism, 849 F.3d
`
`1360 at 1369-71 (admitting settlement covering patents in suit where there was “consideration of
`
`various aspects … of the particular litigation settlements offered for admission into evidence”); see also
`
`In re MSTG, Inc., 675 F.3d 1337, 1348 (Fed. Cir. 2012) (“settlement agreements can be pertinent to the
`
`issue of reasonable royalties.”). Here, Dr. Meyer considered all Finjan agreements that license the
`
`Asserted Patents, and accounted for the similarities and differences in the agreements and how they
`
`impacted her ultimate opinion. Brewer Decl. Ex. 1, Meyer Rpt. at ¶¶ 64-123. She found Finjan’s
`
`settlement license agreements relevant because aside from the Asserted Patents, there is significant
`
`overlap in the technology covered in the agreements with the Asserted Patents and consistency across
`
`agreements in Finjan’s approach to licensing. Id., ¶¶ 64, 73-82, 89-90, 109-111, 114-117, 119. Her
`
`discussion included describing the circumstances of the Intel agreement and how she used the facts
`
`leading up to that agreement, which is a license for all the Asserted Patents. Id., ¶¶ 73-77, 111, 114-
`
`115. The amount of the license alone does not make it inadmissible.
`
`
`1 Georgia Pacific factor 2 for comparability addresses “other patents”, i.e., not the patents-in-suit.
`4
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 6 of 7
`
`
`Thus, Finjan’s agreements are admissible because they are more probative than prejudicial.
`
`See, e.g. Mformation Techs., Inc., v. Research In Motion Ltd., No. C 08-04990-JW, 2012 WL 2339762,
`
`at *3 (N.D. Cal. June 7, 2012) (denial of similar motion in limine where expert explained “how she
`
`used each licensing agreement” and how the agreement “would be adjusted to account for
`
`differences”); Blue Coat I, Dkt. No. 367 at 8:14-17 (settlements admitted where “…the jury is provided
`
`evidence of these similarities and differences so that they may consider the relevance of the challenged
`
`settlement agreements”); Sentius Int’l, LLC v. Microsoft Corp., No. 5:13-cv-00825-PSG, 2015 WL
`
`451950, at *1 (N.D. Cal. Jan. 27, 2015) (to rely on settlement for damages, patentee must only show
`
`consideration of it “is sufficiently reliable to be admissible under Daubert”); GPNE Corp. v. Apple,
`
`Inc., Case No. 5:12–cv–02885–LHK, 2014 WL 1494247, at *9–10 (N.D. Cal. Apr. 16, 2014)
`(permitting a damages expert to testify where he relied on litigation settlement agreements).2
`Blue Coat misquotes Dr. Meyer who explained how the settlement agreements were probative
`
`in her report and at deposition. She testified how she used the agreements and that the “license
`
`agreements rising out of settlement are generally consistent with both agreements reached outside of
`
`settlement, with documents, showing Finjan’s licensing model and with discussions that I’ve had with
`
`[Finjan] about [its] licensing approach” and therefore “is informative.” Lee Opp. Decl., Ex. 12, 5/8/17
`
`Meyer at 119:9-21. She also testified that she explains “the relevance of the settlement agreements”
`
`and “the probative nature of those settlement agreements,” pointing to her report. Lee Opp. Decl., Ex.
`
`12, 5/8/17 Meyer 121:10-122:12; Brewer Decl., Ex. 1, Meyer Rpt. at ¶¶ 109-110.
`
`Finally, Finjan’s proposed jury instruction regarding settlement agreements, like one given in
`
`Blue Coat I (Blue Coat I, Dkt. No. 437 at 47), describes how a settlement agreement is different from
`
`other license agreements. This in combination with Dr. Meyer’s explanation ensures no prejudice to
`
`Blue Coat. For the foregoing reasons, the Court should deny Blue Coat’s Motion in Limine No. 4.
`
`
`2 Blue Coat’s cases are not analogous. Hanson v. Alpine Valley Ski Area, Inc. only dealt with offers to
`license. 718 F.2d 1075, 1079 (Fed. Cir. 1983). The agreements excluded in ResQNet.com involved
`different technology and was not a license to the patents-in-suit. 594 F.3d at 872-73. LaserDynamics,
`Inc. v. Quanta Comp., Inc. is nothing like this case, where the settlement agreement was executed
`shortly before trial and the defendant had been subjected to numerous sanctions. 694 F.3d 51, 77-78
`(Fed. Cir. 2012).
`
`5
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`

`

`Case 5:15-cv-03295-BLF Document 329 Filed 09/28/17 Page 7 of 7
`
`
`
`
`DATED: September 28, 2017
`
`
`
`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. 4
`
`Case No. 15-cv-03295-BLF-SVK
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`
`
`