Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 1 of 8
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`PAUL J. 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
`HANNAH LEE (State Bar No. 253197)
`hlee@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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`FINJAN, INC., a Delaware Corporation,
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`
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`Plaintiff,
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`v.
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`SAN JOSE DIVISION
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`Case No.: 15-cv-3295-BLF-SVK
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`PLAINTIFF FINJAN, INC.’S REPLY
`BRIEF IN SUPPORT OF ITS PARTIAL
`RENEWED MOTION FOR JUDGMENT
`AS A MATTER OF LAW PURSUANT TO
`FED. R. CIV. P. 50(b)
`
` January 5, 2018
`Date:
`Time: 3:00 p.m.
`Place: Courtroom 3, 5th Floor
`Before: Hon. Beth Labson Freeman
`
`
`BLUE COAT SYSTEMS, LLC, a Delaware
`Corporation,
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`
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`Defendant.
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`__________________________________________________________________________________
`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`CASE NO. 15-cv-03295-BLF-SVK
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 2 of 8
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`Blue Coat does not have legally sufficient evidence to support its defenses, particularly with
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`respect to Finjan’s claim of damages for GIN/Webpulse. The record evidence at trial was undisputed,
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`namely that Blue Coat made its infringing GIN/Webpulse in the United States. Each and every
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`element of the asserted system claims were put together in the United States. Finjan presented
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`substantial evidence in support of its claims with respect to the ‘844 and ‘494 Patents through the
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`extensive and credible testimony of several highly regarded expert witnesses in the field (Drs. Cole,
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`Mitzenmacher, and Medvidovic), Finjan fact witnesses, numerous exhibits including Blue Coat
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`documents, source code, and the deposition testimony of Blue Coat witnesses. By contrast, Blue Coat,
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`in rebuttal, failed to present legally sufficient evidence to support its rebuttal case, relying principally
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`on the conclusory and contradictory testimony of its fact witnesses and single expert witness, Dr.
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`Nielson.
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`For Blue Coat’s infringement of GIN/Webpulse, which is not a product that Blue Coat sells and
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`has no reported revenue for in its accounting records, Finjan applied Blue Coat’s users to value Blue
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`Coat’s infringement for the ‘844 and ‘494 Patents, and based its claim of damages on the smallest
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`infringing components in GIN/Webpulse: (i) the FRS portion of GIN that infringes the ‘844 Patent,
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`which is newly added technology that was not part of Blue Coat I and (ii) a 2.7% increase in use of
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`new technology in DRTR for infringement of the ‘494 Patent that was not accounted for in the Blue
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`Coat I verdict. This approach for a reasonable royalty, however, is not based on a case of finding
`infringement based on use, as the infringement is already established with the fact that Blue Coat
`makes the entire GIN/Webpulse that infringes Finjan’s asserted claims for the ‘844 and ‘494 Patents in
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`the United States. Thus, for the reasons discussed herein and in Finjan’s opening brief, Finjan
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`respectfully requests the Court grant Finjan’s Partial Renewed Motion for Judgment as a Matter of
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`Law (“Motion”).
`I.
`Finjan is entitled to JMOL that Blue Coat owes damages for making an infringing
`system in the United States.
`Notwithstanding the fact that Blue Coat waived any argument that GIN/Webpulse is not made
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`in the United States, as discussed below, the record evidence in this case establishes that
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`1
`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
`
`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 3 of 8
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`GIN/Webpulse is made in the United States. For Blue Coat’s infringement of making the infringing
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`system in the United States, Finjan is entitled to a reasonable royalty. As a preliminary matter, the
`Federal Circuit has held that infringement occurs when one of the following enumerated activities —
`making, using, selling, offering for sale or importing into the United States -- is established within the
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`territory of the United States. Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 1283, 1306
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`(Fed. Cir. 2015) (“territoriality is satisfied when and only when any one of those domestic actions for
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`that unit (e.g., sale) is proved to be present, even if others of the listed activities for that unit (e.g.,
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`making, using) take place abroad.”).
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`Once infringement is established domestically, a reasonable royalty can be calculated based on
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`some other metric with respect to the infringing product, such as the use or sale of the infringing
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`product, even if that use or sale would not constitute infringement itself under § 271(a) because the use
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`or sale occurred extraterritorially. Id. (“[o]nce one extends the extraterritoriality principle to confining
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`how damages are calculated, it makes no sense to insist that the action . . . for measurement itself be an
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`infringing action.”)(emphasis in original). In fact, a reasonable royalty based on worldwide use can
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`apply where an infringing product is made in the United States and used extraterritorially. Goulds'
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`Mfg. Co. v. Cowing, 105 U.S. 253 (1881) (approving an award for damages based on an accounting of
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`defendant’s profits, reaching units made in the United States even though some were to be used only
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`abroad); see also Card-Monroe Corp. v. Tuftco Corp., No. 1:14-cv-292, 2017 WL 3841878, at *45
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`(E.D. Tenn. Sept. 1, 2017) (citing Carnegie Mellon, the Court permitted patent damages from foreign
`sales based on making the infringing system in the United States). Thus, all of Blue Coat’s arguments
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`conflate infringement principles with damages, which is wholly improper.
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`Here, because Blue Coat’s infringing system is deployed elsewhere after it is made in the
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`United States, Finjan can calculate damages based on extraterritorial activity. Because Blue Coat does
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`not sell GIN/Webpulse and it is not a product listed with revenues in its accounting records, Finjan
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`applied users to calculate a reasonable royalty since there was no sales information. Tr. Trans. at p.
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`1242, lines 16-17, p. 1244, lines 16-19, p. 1388, lines 13-19 (“GIN is not a product just like Webpulse
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`is not a product. You don’t buy Webpulse and you don’t buy GIN”), p. 1884, lines 5- p. 1885, line 9;
`2
`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 4 of 8
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`1887, lines 7-13. If GIN/Webpulse was a product that Blue Coat sold, Finjan could also calculate a
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`reasonable royalty for Blue Coat’s infringement of “making” the infringing system in the United States
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`by using revenues. See, e.g., Railroad Dynamics Inc. v. A. Stucki Co., 727 F.2d 1506, 1519 (Fed. Cir.
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`1984) (foreign sales properly included in royalty calculation where infringing product made in the
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`United States and sold outside the United States). Thus, Finjan is entitled to a reasonable royalty for
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`Blue Coat’s making in the United States based on worldwide users, who use the infringing system that
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`is made in the United States.
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`Blue Coat’s confusing arguments regarding the NTP, Inc. v. Research in Motion Ltd., 418 F.3d
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`1282, 1317 (Fed. Cir. 2005) are misplaced. The NTP cases dealt with “use” for the infringement
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`scenario, which is not the subject of Finjan’s infringement case. Specifically, NTP held that “[t]he use
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`of a claimed system under section 271(a) is the place at which the system as a whole is put into
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`service, i.e. the place where control of the system is exercised and beneficial use of the system
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`obtained.” Id. As the Court precluded Finjan from presenting to the jury a “use” infringement case,
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`this issue should not be conflated with Finjan’s arguments regarding the fact that Blue Coat makes the
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`infringing GIN/Webpulse system in the United States.
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`II.
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`Blue Coat Is Collaterally Estopped
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`Blue Coat is collaterally estopped from challenging that GIN/Webpulse is made in the United
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`States. The Court in Blue Coat I held that there was substantial unrebutted evidence for the jury to
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`conclude that Webpulse was “made in the United States.” Dkt. 543 at 9-10. Contrary to Blue Coat’s
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`characterization, the Court in Blue Coat I did not restrict its finding regarding worldwide users to the
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`“use” prong of Section 271(a). Therefore, Blue Coat’s argument that collateral estoppel does not apply
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`here is baseless.
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`More importantly, Blue Coat does not argue that where GIN/Webpulse is “made” is a different
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`location than what was unrebutted in Blue Coat I. Moreover, with respect to GIN, it is undisputed that
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`Webpulse is a part of GIN, and GIN is made in the United States. See, e.g., Dkt. No. 424 at 11-12; Tr.
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`at 482:6-8; 1387:21-24. At trial, it was undisputed that GIN/Webpulse was compiled in the United
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`States. Id.; see also Tr. Trans. at p. 886, lines 16-23, p. 982, lines 22 through p. 987, line 2; p. 1052,
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`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 5 of 8
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`line 22 through p. 1053, lines 24-25; p. 1129, line 9-15, p. 1130, line 9-15. Once it is compiled, it is a
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`completed system. Thus, the fact that it is undisputed that GIN/Webpulse is compiled entirely in the
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`United States establishes that it is made in the United States. At the very least, collateral estoppel
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`applies to preclude Blue Coat from arguing otherwise in this case. Spectrum Pharm., Inc. v.
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`Innopharma, Inc., No. 12-260-RGA-CJB, 2015 WL 3374922, at *3 (D. Del. May 22, 2015) (collateral
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`estoppel applies when issues are “substantially similar” to those previously litigated).
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`Further, Blue Coat unsuccessfully argues that Finjan is barred from making its collateral
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`estoppel argument because it did not raise it in is Rule 50(a) motion. Collateral estoppel is an
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`argument, not an “issue” that a party would need to separately raise in a Rule 50(a) motion in order to
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`preserve it in a Rule 50(b) motion. Notwithstanding this, Blue Coat’s waiver argument is meritless
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`because it had sufficient notice of Finjan’s estoppel argument. Finjan specifically raised this argument
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`during trial in its response to Blue Coat’s trial brief submitted to the Court regarding manufacture and
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`use of GIN. See Dkt. No. 405 at 1-2; see also McClure v. Biesenbach, No. SA-04-CA-0797-RF, 2008
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`WL 3978062, at *1 (W.D. Tex. July 25, 2008) (no waiver when party had notice of the argument
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`during trial).
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`III.
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`Blue Coat’s Arguments Have Changed Over Time and Are Inconsistent
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`Blue Coat’s arguments against worldwide users rely upon Blue Coat’s rewriting of the asserted
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`claims to improperly convert them into computer hardware claims or method claims. The asserted
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`claims of the ‘494 and ‘844 Patents cover “systems” that do not necessarily require the use of any
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`physical computer devices or hardware. See Claim 15 of the ‘844 Patent (“An inspector system …”);
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`Claim 10 of the ‘494 Patent (“A system for managing Downloadables…”). Thus, the claims are not
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`necessarily computer hardware claims. Similarly, infringement of the asserted claims do not
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`necessarily require the use of the “systems” in the United States, as infringement can be proven with
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`the fact that these “systems” are made in the United States. 35 U.S.C. 271(a) (“Except as otherwise
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`provided in this title, whoever without authority makes, uses, offers to sell, or, sells any patented
`invention, within the United States, or imports into the United States any patented invention during the
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`term of the patent, therefor, infringes the patent.”) (emphasis added); Finjan, Inc. v. Secure Computing
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`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 6 of 8
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`Corp., 626 F.3d 1197, 1204-05 (Fed. Cir. 2010) (holding that system claims that recite software
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`components with specific purposes, e.g. “a logical engine,” “a communications engine,” and “a linking
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`engine,” do not require that the user activate or use the code for infringement of the system claim to
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`occur). In arguing about “use” of the infringing systems, Blue Coat is attempting to rewrite the
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`systems claims and interpreting them to be method claims for purposes of infringement.
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`Blue Coat mistakenly claims that Finjan is “relitigat[ing] a position that it lost at the jury
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`instruction stage.” Dkt. No. 484 at 15-16. This is wholly inaccurate. During trial and during the jury
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`instruction charge conferences, Blue Coat never disputed that software is made when source code is
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`compiled into a program. CNET Networks, Inc. v. Etilize, Inc., 528 F. Supp. 2d 985, 994 (N.D. Cal.
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`2007) (discussing computer software as consisting of source code that can later be stored after
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`compilation onto a computer readable medium or CD-ROM). The substantial evidence at trial, which
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`Blue Coat failed to rebut, showed that Blue Coat’s GIN/Webpulse is a software “system” that is fully
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`made in the United States without the need for additional components to be installed outside of the
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`United States. Dkt. No. 469 at 11-12. There is no dispute that GIN/Webpulse’s source code is
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`maintained in the United States, it is compiled in the United States, and all updates of GIN/Webpulse
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`are made in the United States and pushed out to all of its data centers worldwide. Dkt. No. 424 at 11-
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`12; Dkt. No. 469 at 11-12. Blue Coat does not dispute these facts, and thus, there can be no dispute
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`that Blue Coat infringes under the “make” prong of § 271(a).
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`Although Blue Coat states that foreign GIN/Webpulse users “use” hardware combined abroad
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`with software downloaded from the nearest foreign data center (Opp. at 17), this argument is
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`misleading. As discussed above, Finjan’s assertion of infringement was not based upon “use” of the
`systems or installation,1 and, moreover, the foreign data centers host the GIN/Webpulse system that
`was made in the United States, as well as updated from the United States.
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`1 The Court foreclosed Finjan from presenting an infringement claim based on Blue Coat’s “use”
`pursuant to the case law that followed NTP, Inc. v. Research in Motion Ltd., 418 F.3d 1282, 1317 (Fed.
`Cir. 2005).
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`5
`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 7 of 8
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`In addition, Microsoft, Eolas, and Centillion are both factually and legally distinguishable. In
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`those cases, the claims required hardware components, such as a server. Thus, the claims in those
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`cases are nothing like the case asserted here, where Blue Coat infringes the ‘844 and ‘494 Patents
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`because it makes the entire infringing software system in the United States. See Eolas Techs., Inc. v.
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`Microsoft Corp., 399 F.3d 1325, 1330-31 (Fed. Cir. 2005) (citing U.S. Patent No. 5,838,906 that
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`requires a “client workstation”); Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 1753 (2007)
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`(infringement occurred only when software was installed abroad); Centillion Data Sys., LLC v. Qwest
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`Commc’ns Int’l, Inc., 631 F.3d 1279, 1281 (Fed. Cir. 2011) (claim requiring “personal computer data
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`processing means”). As the Federal Circuit has articulated, “in every infringement analysis, the
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`language of the claims, as well as the nature of the accused product, dictates whether an infringement
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`has occurred.” Finjan, Inc., 626 F.3d at 1204 (citing Fantasy Sports Props. v. Sportsline.com, Inc.,
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`287 F.3d 1108, 1118 (Fed. Cir. 2002)). In addition, Microsoft is also distinguishable because it
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`concerned § 271(f), where the infringement only occurred abroad once the exported component was
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`loaded with Windows software so it could perform the patented speech processor claimed in the
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`asserted patent in that case. As a result, the infringement occurred overseas, not in the United States.
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`127 S. Ct. at 1755-60. Here, the infringement is in the United States, as the infringing GIN/Webpulse
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`system components are all made in the United States.
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`Furthermore, Blue Coat mischaracterizes Finjan’s statements of “specific computer
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`components” in other briefs. Finjan’s statements referred to “specific computer components,” but
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`never restricted those specific components to hardware components. Thus, Blue Coat’s citation to
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`these statements does nothing to support its argument that the claims require the use of hardware
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`components for infringement to occur.
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`CONCLUSION
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`For the foregoing reasons as well as those set forth in Finjan’s opening brief, the Court should
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`grant Finjan’s renewed motion for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b) that
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`(1) Blue Coat infringes the ‘844 and ‘494 Patents; (2) Blue Coat’s infringement was and continues to
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`6
`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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`Case 5:15-cv-03295-BLF Document 492 Filed 01/04/18 Page 8 of 8
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`be willful; and (3) Blue Coat owes damages of no less than a reasonable royalty for infringement of
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`the ‘844 Patent and ‘494 Patent, i.e. $29.8 million and $16.2 million respectively.
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`Dated: January 4, 2018
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`Respectfully submitted,
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`
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`By: /s/ Paul Andre
`
`Paul J. Andre (SBN 196585)
`Lisa Kobialka (SBN 191404)
`James Hannah (SBN 237978)
`Hannah Lee (SBN 253197)
`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
`hlee@kramerlevin.com
`
`Attorneys for Plaintiff
`FINJAN, INC.
`
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`FINJAN’S REPLY ISO PARTIAL RENEWED MOTION
`FOR JUDGMENT AS A MATTER OF LAW PURSUANT
`TO RULE 50(b)
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`CASE NO. 15-cv-03295-BLF-SVK
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