Case 5:15-cv-03295-BLF Document 330 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
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`
`
`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. 5 TO
`EXCLUDE IRRELEVANT
`FINANCIAL DAMAGES
`ARGUMENTS
`
`
`October 5, 2017
`Date:
`Time:
`1:30 pm
`Place: Courtroom 3, 5th Floor
`Judge: Hon. Beth Labson Freeman
`
`
`
`BLUE COAT SYSTEMS LLC, a Delaware
`Corporation,
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`
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`Defendant.
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`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
`
`CASE NO. 15-cv-03295-BLF-SVK
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`

`

`Case 5:15-cv-03295-BLF Document 330 Filed 09/28/17 Page 2 of 7
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`Blue Coat raises in this Motion in Limine No. 5 the same failed arguments this Court
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`previously rejected regarding Finjan’s presentation of trial evidence. First, there is no merit to Blue
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`Coat’s intentional mischaracterization of Finjan’s presentation of both fact and expert evidence
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`presented at trial as a “new” damages theory. Blue Coat misrepresents the trial record in Blue Coat I
`and Sophos, and the law stands that that a reasonable royalty is the minimum measure of damages for
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`patent infringement. Second, Blue Coat’s attempt to exclude more than fifteen exhibits concerning
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`Blue Coat’s acquisition and revenues without any analysis whatsoever of their content or relevance to
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`establishing a reasonable royalty should be rejected outright. This information is highly relevant to
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`determining damages and properly considered under a Georgia-Pacific analysis. At most, Blue
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`Coat’s dispute goes to the weight of the evidence and can be dealt with by cross-examination or
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`objection at trial, not through exclusion under a motion in limine.
`A.
`A Reasonable Royalty is the Minimum Award for Patent Infringement: 35 U.S.C. § 284
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`A Reasonable Royalty is the Floor to Patent Infringement Damages
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`expressly states that a reasonable royalty is the minimum damages amount for patent infringement:
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`“Upon finding for the claimant the court shall award the claimant damages adequate to compensate
`for the infringement, but in no event less than a reasonable royalty for the use made of the invention
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`by the infringer . . . .” (emphasis added). The Federal Circuit has repeatedly confirmed that a
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`reasonable royalty is “merely the floor below which damages shall not fall.” Lucent Techs., Inc. v.
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`Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009) (quotation omitted); ResQNet.com, Inc. v. Lansa,
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`Inc., 594 F.3d 860, 880 (Fed. Cir. 2010) (§ 284 provides that a reasonable royalty “is the minimum,
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`not the maximum.”) (citation omitted). Indeed, the Federal Circuit held that a “jury is entitled to
`award compensatory damages in addition to a reasonable royalty because a reasonable royalty is
`‘merely the floor below which damages shall not fall.’” Whitserve, LLC v. Computer Packages, Inc.,
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`694 F.3d 10, 33 (Fed. Cir. 2012) (emphasis added). Blue Coat’s rejection of this statutory language
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`and unequivocal precedent has no legal support. See State Indus., Inc. v. Mor-Flo Indus., Inc., 883
`F.2d 1573, 1577 (Fed. Cir. 1989) (Federal Circuit stating: “the floor for a damage award is no less
`than a reasonable royalty”) (emphasis added)). Blue Coat’s cites to other cases that simply state
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`1
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
`
`CASE NO. 15-cv-03295-BLF-SVK
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`

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`Case 5:15-cv-03295-BLF Document 330 Filed 09/28/17 Page 3 of 7
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`there are different damages approaches, such as lost profits or cost savings (Motion at 2-3), but these
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`cases do nothing to dispute the statutory mandate that a reasonable royalty is the minimum for
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`damages. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1544 (Fed. Cir. 1995) (the purpose of the
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`alternative methods in § 284 “is not to direct the form of compensation, but to set a floor below which
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`damage awards may not fall.”).
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`Finjan May Properly Summarize the Trial Evidence Regarding a Reasonable Royalty. Blue
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`Coat mischaracterizes Finjan’s presentation of evidence presented at trial that is relevant to damages.
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`Finjan fully disclosed its theories of damages to Blue Coat in its interrogatory response and its initial
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`disclosures. Dkt. No. 305-9, Declaration of Robin L. Brewer (“Brewer Decl.”), Ex. 12 at 12-19, 38-
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`40 (citing licensing practices, per subscription or per user fee, costs savings, use of infringing
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`technology, and Finjan’s damages expert report); Declaration of Hannah Lee (“Lee Opp. Decl.”) filed
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`herewith, Ex. 30, Finjan’s Corrected Second Supp. Initial Disclosures at 7-12 (same). As this Court
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`ruled in Blue Coat I, Finjan is not restricted to expert testimony to prove damages and is entitled to
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`summarize to the jury the totality of evidence presented at trial as it relates to determining a
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`reasonable royalty. Specifically, in Blue Coat I, this Court upheld the jury’s award of damages for
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`infringement of a patent for which Finjan’s expert did not present a damages calculation based on the
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`Court’s review of the evidence that Finjan presented at trial through fact witnesses. Blue Coat I, Dkt.
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`No. 543 at 9. A jury may rely on all the record evidence to determine damages, regardless of whether
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`it comes through an expert. See Apple, Inc. v. Motorola, Inc., 757 F.3d 1286, 1330 (Fed. Cir. 2014)
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`(expert evidence not necessary for determining a reasonable royalty); see also Dow Chem. Co. v. Mee
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`Indus., Inc., 341 F.3d 1370, 1382 (Fed. Cir. 2003) (“[§] 284 is clear that expert testimony is not
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`necessary to the award of damages, but rather ‘may [be] receive[d]…as an aid’”); Golden Bridge
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`Tech. v. Apple Inc., No. 5:12-cv-04882-PSG, 2014 WL 4057187, at *2 (N.D. Cal. June 1, 2014)
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`(excluding expert but plaintiff “free to offer evidence of its damages from other, fact witnesses”);
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`CPG Prods. Corp. v. Pegasus Luggage, Inc., 776 F.2d 1007, 1010-11 (Fed. Cir. 1985) (trial evidence
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`sufficient to rule on royalty rate).
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`Blue Coat mischaracterizes portions of the trial transcript in both Blue Coat I and Sophos
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`2
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
`
`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 330 Filed 09/28/17 Page 4 of 7
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`where Finjan’s counsel properly argued in its closing argument, consistent with the aforementioned
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`precedent, that a reasonable royalty is the floor and the jury may award damages in an amount higher
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`than that based on the record evidence. In both cases, the Court permitted Finjan to summarize the
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`trial evidence to provide context for the hypothetical negotiation, although in Sophos the Court
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`precluded Finjan from presenting a specific computation to the extent it went “beyond what the
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`damages expert[] and . . . other witnesses in this trial have testified to.” Brewer Decl., Ex. 103,
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`Sophos Trial Tr. at 1737:13-17. In addition, Blue Coat’s disclosure arguments are a red-herring
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`because Finjan disclosed at the outset of this case (including in its interrogatory response) its damages
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`theory premised on facts. That Finjan will summarize this evidence after it is presented to the jury
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`does not mean Finjan is presenting a “new” damages theory. Blue Coat also misrepresents Finjan’s
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`edits to the proposed pretrial materials. Finjan revised the proposed jury instruction regarding a
`reasonable royalty to make it nearly identical to the instruction given in Blue Coat I. Compare
`Brewer Decl., Ex. 100 at 57-58 with Lee Opp. Decl., Ex. 31, Blue Coat I, Dkt. No. 437 at 46.1 Finjan
`revised the verdict form to reflect that the jury may award damages in a form different from that
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`adopted by the parties’ experts based on the trial evidence. Brewer Decl., Ex. 100.
`B.
`Evidence Regarding Blue Coat’s Acquisition: Blue Coat provides no legal justification for
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`Finjan May Introduce Acquisition and Total Revenue Evidence
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`excluding information relating to its acquisition by Symantec. Information regarding company
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`acquisitions is properly considered in determining a reasonable royalty. Function Media, LLC v.
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`Google, Inc., No. 2:07-CV-279-CE, 2010 WL 272409, at *2-3 (E.D. Tex. Jan 15, 2010) (expert
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`properly relied on acquisition of companies to determine reasonable royalty); Fresenius Med. Care
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`Holding Inc. v. Baxter Int'l, Inc., 224 F.R.D. 644, 653 (N.D. Cal. 2004) (amount paid to acquire a
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`company with desired patents is relevant to a reasonable royalty analysis) (citation omitted).
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`Blue Coat, however, seeks to exclude fifteen exhibits without providing any analysis
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`1 Blue Coat concedes that Finjan’s damages expert in this case has disclosed a price per user opinion.
`See Brewer Decl., Ex. 1, Meyer Rpt. at ¶¶ 170-174.
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`3
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 330 Filed 09/28/17 Page 5 of 7
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`whatsoever of their content or relevance to a damages analysis under Georgia-Pacific.2 These
`exhibits, described below, provide highly relevant information regarding the Blue Coat acquisition,
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`including the implications and results of the integration of Blue Coat’s product offerings:
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` Brewer Decl., Ex. 112 at 2-4, 7 is an industry publication that includes a page
`dedicated to “Blue Coat acquisition benefits,” including reference to specific Blue Coat
`product markets and the effect on the ability to compete, product margins and market
`growth, as well as “key product integrations” between Blue Coat and Symantec.
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` Brewer Decl., Exs. 110, 114 are industry publications discussing the actual and
`expected effects of the acquisition on the companies’ enterprise market growth and
`competition, and include an “Investment Thesis” identifying Blue Coat product
`offerings that made the acquisition a “wise decision.”
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` Brewer Decl., Exs. 115-117 at 1, 2 are industry publications that discuss the reasons
`for the acquisition, the expected effects of the acquisition on competition with other
`market players, and how the industry expected the acquisition to affect growth and
`revenues of the companies’ enterprise segment.
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` Brewer Decl., Ex. 107 is a Symantec and Blue Coat marketing document providing
`statistics regarding the combined company, including the expected number of e-mails
`scanned per day, web requests categorized per day, previously unseen threats per day,
`and the number of customers, cloud applications, data centers and endpoints protected
`by the integrated product offerings.
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` Brewer Decl., Exs. 108, 109 are Symantec press releases regarding the acquisition of
`Blue Coat and describing the interaction of specific Blue Coat and Symantec products
`that resulted in increased protection through the sharing or threat telemetry, as well as
`the goals the acquisition will further, including the capabilities Blue Coat’s product
`offerings allow.
`
` Brewer Decl., Exs. 104-106, 111, 113 are industry publications and a Symantec
`document that discuss the results and expectations of the Blue Coat acquisition,
`including revenue contributions.
`This information is highly relevant to at least the following Georgia-Pacific factors: the rates
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`paid for use of other comparable technology (factor 2), utility and advantages of the patented
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`technology (factor 9), the nature and benefits of the patented invention (factor 10), the extent to which
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`Blue Coat has made use of the invention (factor 11), the portion or profit or selling price allowed for
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`use of the invention (factor 12), and the amount of the hypothetical negotiation (factor 15). Blue Coat
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`also ignores the manner in which Finjan’s damages expert, Dr. Christine Meyer, relies on the Blue
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`2 “Georgia-Pacific” refers to Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp.
`1116 (S.D.N.Y. 1970), mod. and aff’d, 446 F.2d 295 (2d Cir. 1971), cert. denied, 404 U.S. 870 (1971).
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`4
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 330 Filed 09/28/17 Page 6 of 7
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`Coat acquisition in support of her reasonable royalty opinion. Specifically, Dr. Meyer evaluated the
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`Blue Coat acquisition in the context of the hypothetical negotiation, explained the acquisition would
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`require a renegotiation of the parties’ hypothetical license, identified the efficiencies expected as a
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`result of the acquisition, and relied on industry publications regarding the acquisition to project sales.
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`Brewer Decl., Ex. 1 at ¶¶ 154-155. Thus, this information is highly relevant to Dr. Meyers’ opinions.
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`Evidence Regarding Blue Coat’s Total Revenues: Blue Coat again provides no analysis of
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`any of the revenue-related documents it seeks to exclude or the manner in which Finjan’s damages
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`expert uses such information to support her opinion. Finjan’s damages expert explained that the Blue
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`Coat acquisition’s actual and anticipated effect on revenues are relevant to the renegotiation of the
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`hypothetical license following the acquisition, including to the parties’ bargaining positions and the
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`amount the parties would have considered and agreed to at that time. Brewer Decl., Ex. 1 at ¶¶ 123,
`155-158.3 Dr. Meyer relied on industry projections regarding Blue Coat’s revenue growth in the
`enterprise segment, which relates to the accused products, following its acquisition by Symantec,
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`compared them against Blue Coat’s internal projections for the accused products, and accounted for
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`reporting differences in forming her opinion. Id. at ¶ 155. Thus, Blue Coat’s overall revenues, and in
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`particular those relating to Blue Coat’s acquisition, are relevant to at least the following Georgia-
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`Pacific factors: the commercial relationship between the parties and licensees (factor 5), the effect of
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`selling the patented technology in promoting sales of other products (factor 6), established
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`profitability of the products under the patent (factor 8) and factor 15. Reliance on these revenues
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`would not “skew the damages horizon for the jury” because they are specifically related to the impact
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`the acquisition had on enterprise segment revenues and the parties’ hypothetical negotiation.
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`This Court previously held that Blue Coat’s objections to exhibits regarding acquisitions and
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`revenues relevant to Finjan’s damages opinion are properly handled by an objection at trial. Blue
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`Coat I, Dkt. No. 367 at 7. Blue Coat’s objections herein should similarly be handled at trial.
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`3 See State Contr. & Eng’g Corp. v. Condette Am., Inc., 346 F.3d 1057, 1072 (Fed. Cir. 2003) (profit
`margin can be relevant to the determination of a royalty rate in a hypothetical negotiation).
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`5
`PLAINTIFF’S OPPOSITION TO BLUE COAT’S
`MOTION IN LIMINE NO. 5
`
`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 330 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. 5
`
`CASE NO. 15-cv-03295-BLF-SVK
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