Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 1 of 9
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`FINJAN, INC.,
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`Plaintiff,
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`v.
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`SONICWALL, INC.,
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`Defendant.
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`Case No. 17-cv-04467-BLF (VKD)
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`ORDER DENYING LEAVE TO
`AMEND INFRINGEMENT
`CONTENTIONS
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`Re: Dkt. No. 216
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`In this patent infringement action, plaintiff Finjan, Inc. (“Finjan”) moves for leave to
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`amend its infringement contentions. Dkt. No. 216. Defendant SonicWall, Inc. (“SonicWall”)
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`opposes. Dkt. No. 221. The motion was referred to the undersigned judge. Dkt. No. 75. The
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`Court heard oral argument on the matter on January 28, 2020. Dkt. No. 227. Having considered
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`the parties’ submissions and arguments made at the hearing, the Court denies Finjan’s motion for
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`leave to amend.
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`I.
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`BACKGROUND
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`On April 10, 2018, Finjan served its original infringement contentions, asserting
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`infringement of the following ten patents: U.S. Patent Nos. 6,154,844 (“the ’844 patent”);
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`7,058,822 (“the ’822 patent”); 6,804,780 (“the ’780 patent”); 7,613,926 (“the ’926 patent”);
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`7,647,633 (“the ’633 patent”); 8,141,154 (“the ’154 patent”); 8,677,494 (“the ’494 patent”);
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`7,975,305 (“the ’305 patent”); 8,225,408 (“the ’408 patent”); and 6,965,968 (“the ’968 patent”).
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`See Dkt. No. 112-2 at 2. After SonicWall objected to this original disclosure, Finjan served
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`supplemental infringement contentions on November 9, 2018. Dkt. No. 118 at 2.
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`SonicWall moved to compel further supplemental infringement contentions on January 31,
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 2 of 9
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`2019. Dkt. No. 112. Finjan opposed the motion on February 15, 2019. Dkt. No. 118. In its
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`opposition, Finjan made specific representations about its infringement theories, including the
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`following statements:
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`[C]ertain products are appliances that are capable of infringing
`malware analysis “on the box” (without connecting to the cloud) and
`infringe through the use of this analysis engine. However, these
`products can also connect to Capture ATP in the “cloud” for further
`malware analysis that also infringes.
`. . .
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`Thus, Finjan’s contention is that SonicWall’s Gateway, ESA, and
`SMA instrumentalities infringe on their own, but also infringe when
`used with Capture ATP, as identified in Finjan’s infringement
`contentions. Thus, Finjan’s contentions explain how products
`infringe alone or with Capture ATP.
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`Dkt. No. 118 at 6, 7 (footnote omitted); see also Dkt. No. 129 at 12:09–14:57.
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`On May 1, 2019, the Court granted SonicWall’s motion and ordered Finjan to amend its
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`infringement contentions. Dkt. No. 146. That order required Finjan to eliminate open-ended
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`language and references to unidentified components by, among other things, removing placeholder
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`reference to unspecified products, services, or components, and specifying whether a product or
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`service infringes alone or in combination. Id. Specifically, in response to Finjan’s representations
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`that it believed the Gateways and ESA instrumentalities could infringe in two ways—(1) “on the
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`box,” without connecting to cloud-based components, or (2) in combination with Capture ATP—
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`the Court ordered Finjan to amend its contentions to specify whether an accused product or service
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`infringes alone or in combination with Capture ATP. Dkt. No. 146 at 5. The Court also ordered
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`Finjan to amend its contentions to specifically identify the elements of the accused
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`instrumentalities that satisfy certain limitations of claim 6 of the ’305 patent, claim 22 of the ’926
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`patent, claim 9 of the ’408 patent, claims 1 and 15 of the ’844 patent, claim 9 of the ’780 patent,
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`claims 1, 10, and 3 of the ’154 patent, and claims 1, 7, and 11 of the ’968 patent. Id.
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`Finjan served its second supplemental infringement contentions on May 31, 2019. Dkt.
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`No. 170 at 2. On September 24, 2019, SonicWall moved to strike parts of Finjan’s second
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`supplemental infringement contentions on the ground that Finjan’s amendments did not comply
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`with the Court’s May 2019 order and asserted new theories of infringement not permitted under
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 3 of 9
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`that order. Dkt. No. 164. Finjan opposed SonicWall’s motion to strike, arguing that the second
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`supplemental infringement contentions did not include new theories of infringement, but instead
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`reflected Finjan’s efforts to comply with the Court’s order to more specifically identify infringing
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`components. Dkt. No. 170.
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`On November 20, 2019, the Court granted in part SonicWall’s motion to strike.1 Dkt. No.
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`210. The Court struck Finjan’s contentions for the ’926, ’305, ’844, ’633, ’154, ’780, ’822, and
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`’494 patents that referred to the Gateways and ESA instrumentalities in combination with the
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`CloudAV and GRID sandboxes, and honeypots and webcrawlers, based on Finjan’s earlier
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`repeated representations that the Gateways and ESA instrumentalities infringed either alone or in
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`combination with Capture ATP only. Id. at 3–6, 8. The Court also struck the portions of Finjan’s
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`contentions for the ’154 patent that referred to the Gateways and ESA instrumentalities in
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`combination with the Stats server and URL Thumbprint Database as a new theory of infringement
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`that Finjan had not previously disclosed. Id. at 9. Finally, the Court struck the portions of
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`Finjan’s contentions for the ’968 patent identifying WXA appliances for the first time with respect
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`to certain limitations as a new theory of infringement that Finjan had not previously disclosed. Id.
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`at 9–10.
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`Finjan now seeks leave to amend its infringement contentions to include the infringement
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`theories that the Court struck in November 20192: (1) the CloudAV and GRID Sandbox
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`contentions in the Gateways and ESA “alone” charts for the ’926, ’305, ’844, ’633, ’154, ’780,
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`’822, and ’494 patents; (2) the Stats server and the URL Thumbprint Database contentions in the
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`Gateways and ESA “alone” charts for the ’154 patent; and (3) the WXA appliance contentions in
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`the charts for the ’968 patent. Dkt. No. 216 at 3–4.
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`1 The Court’s order issued under seal on November 20, 2019. Dkt. No. 196. Because the parties
`did not indicate that any redactions needed to be made to that order (see Dkt. Nos. 197, 208), the
`Court re-filed the order without any redactions on December 3, 2019. Dkt. No. 210.
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` 2
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` Finjan represents (and SonicWall does not dispute) that its proposed amendments are
`substantially the same as its second supplemental infringement contentions served on May 31,
`2019. Dkt. No. 216 at 4 n.2; Dkt. No. 221 at 1; Dkt. No. 232 at 8:3-7.
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 4 of 9
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`II.
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`LEGAL STANDARD
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`A plaintiff may amend its infringement contentions “only by order of the Court upon a
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`timely showing of good cause,” such as the “[r]ecent discovery of nonpublic information about the
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`Accused Instrumentality.” Patent L.R. 3-6. When determining whether to grant leave to amend,
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`the Court first considers whether the party seeking leave acted diligently. Apple Inc. v. Samsung
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`Elecs. Co., No. CV 12-00630 LHK, 2012 WL 5632618, at *2 (N.D. Cal. Nov. 15, 2012) (citation
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`omitted). The Court then considers whether the proposed amendment would unduly prejudice the
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`non-moving party. Id. (citation omitted).
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`III. DISCUSSION
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`A.
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`Finjan’s Diligence
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`1.
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`Sandbox contentions
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`The Court first considers whether Finjan has been diligent with respect to its motion to
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`amend to add contentions that SonicWall’s Gateways and ESA appliances infringe in combination
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`with the CloudAV and GRID sandboxes (“the sandbox contentions”).
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`Whether a party has been diligent encompasses two considerations: (1) diligence in
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`discovering the basis for amendment, and (2) diligence in seeking amendment once the basis for
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`amendment has been discovered. Monolithic Power Sys., Inc. v. Silergy Corp., No. 14-cv-01745-
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`VC (KAW), 2015 WL 5440674, at *2 (N.D. Cal. Sept. 15, 2015) (citing Positive Techs., Inc. v.
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`Sony Elecs., Inc., No. C 11-2226 SI, 2013 WL 322556, at *2 (N.D. Cal. Jan. 28, 2013)). The party
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`seeking leave to amend carries the burden of establishing diligence. Id. (citing Radware Ltd. v. F5
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`Networks, Inc., No. C-13-02021-RMW, 2014 WL 3728482, at *1 (N.D. Cal. July 28, 2014)).
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`“Diligence is a fact intensive inquiry, and courts do not apply a mechanical rule in assessing a
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`party’s diligence but instead consider the factual circumstances in total.” Word to Info Inc. v.
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`Facebook Inc., No. 15-cv-3485-WHO, 2016 WL 6276956, at *6 (N.D. Cal. Oct. 27, 2016).
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`Finjan argues that it has been diligent in seeking to add the sandbox contentions. It says it
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`obtained new evidence from SonicWall in April 2019 regarding the CloudAV and GRID
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`sandboxes. Dkt. No. 216 at 1, 3. Finjan included contentions concerning the Gateways and ESA
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`instrumentalities in combination with the CloudAV and GRID sandboxes—without first seeking
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 5 of 9
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`leave—in the second supplemental contentions served on May 31, 2019. Finjan characterizes
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`these sandbox contentions as “clarify[ing] and updat[ing]” its early contentions and insists that
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`they raised no “new infringement issues.” Id. at 3. Finjan says that it did not and could not have
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`known that the Court would view the sandbox contentions as new infringement theories for which
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`leave to amend had not been granted until the Court issued its November 20, 2019 order striking
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`Finjan’s second supplemental contentions. Dkt. No. 216 at 5; Dkt. No. 225 at 1; see also Dkt. No.
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`232 at 17:22-25, 19:17–20:14. Finjan suggests that requiring it to obtain leave to amend under
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`these circumstances is a mere procedural formality. See Dkt. No. 216 at 5.
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`The problem with this argument is that it contradicts Finjan’s own representations to the
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`Court about its infringement theories. In February 2019, Finjan asserted two types of
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`infringement with respect to the Gateways and ESA instrumentalities: (1) “on the box” without
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`connection to cloud-based components, and (2) in combination with Capture ATP. Because the
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`Court did not give Finjan leave to amend to add an additional theory—i.e., the Gateways and ESA
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`instrumentalities infringe in combination with other cloud-based components such as the
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`CloudAV and GRID sandboxes—Finjan was required to seek leave of the Court before including
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`that theory in its infringement contentions. It did not seek leave. Finjan argues that it could not
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`have known its unauthorized addition of the sandbox contentions was a problem until the Court
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`said so in November 2019. Dkt. No. 232 at 10:1-11 (“It wasn’t until November 20th that we were
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`made aware from this Court that . . . [GRID] and Cloud AV were actually new contentions in
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`[t]his case . . . . So I would say that the diligence period doesn’t start until, you know, the earliest
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`of November 20th, 2019 . . . .”). That argument is not credible, given Finjan’s specific
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`representations to the Court in February 2019 about its theories of infringement and the well-
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`established requirements of the Patent Local Rules governing amendments. See Dkt. No. 210 at 4-
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`6 (rejecting Finjan’s argument that its May 2019 contentions disclosed existing infringement
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`theories with greater particularity).
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`By Finjan’s own account, the delay between Finjan’s discovery of new evidence
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`supporting its sandbox contentions and its December 2019 motion for leave to amend is eight
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 6 of 9
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`months.3 Finjan bears the burden of establishing that it was diligent in seeking amendment of its
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`contentions in these circumstances. Critical to this inquiry is the connection between the proposed
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`amendments and the newly discovered evidence. Synopsys, Inc. v. ATopTech, Inc., No. 13-cv-
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`02965-MMC (DMR), 2016 WL 4945489, at *3 (N.D. Cal. Sept. 16, 2016). Finjan argues that,
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`despite diligently seeking discovery from SonicWall, Finjan only “recently” obtained technical
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`documents and source code for the CloudAV and GRID sandboxes. Dkt. No. 216 at 3, 5; Dkt. No.
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`225 at 1, 2. By “recently,” the Court understands Finjan to mean that it obtained new evidence in
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`April or May 2019, after serving its first supplemental infringement contentions in November
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`2018. In its opening brief, Finjan describes the circumstances of its discovery of new evidence as
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`follows:
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`SonicWall stymied Finjan’s diligent discovery efforts,
`delaying Finjan’s ability to present these infringement contentions
`prior to May 2019. Since October 3, 2018, Finjan sought discovery
`of detailed technical information about SonicWall’s GRID and
`CloudAV sandboxes. At the time Finjan served its May 2019
`infringement contentions, SonicWall still had not made any detailed
`technical disclosures regarding the GRID or CloudAV sandboxes so
`it was unclear if any to what extent the functionalities of either
`sandbox utilized components in the cloud versus on the box. . . .
`Finjan eventually sought relief from the Court, which ordered
`SonicWall to run additional keyword searches for the production of
`detailed technical documents relating to these topics.
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`Finjan also diligently attempted to obtain relevant details
`about the accused instrumentalities, and Grid [sic] and CloudAV in
`particular, through deposition of 30(b)(6) topics, including for
`example, “[t]he use of SonicWall’s Capture Labs and GRID Threat
`Network by the Accused Instrumentalities.”). Still no depositions
`have taken place to date.
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`Finjan also repeatedly pressed Sonic Wall to provide source
`code for GRID, WXA, SMA and data for the Thumbprint database.
`SonicWall only made some of this source code available for
`inspection, but not until August 2019, forcing Finjan to use the
`limited discovery available to it to include this functionality in the
`May 2019 Contentions.
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`Dkt. No. 216 at 5–6 (citations omitted). Finjan does not tie any information that SonicWall
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`3 In its opening brief, Finjan says it obtained new evidence from SonicWall in April 2019, but in
`its reply brief, Finjan says it did not have the critical discovery until May 2019. Compare Dkt.
`No. 216 at 1 (“In April 2019, Finjan learned of new evidence of infringement that SonicWall had
`improperly withheld.”) with Dkt. No. 225 at 1–2, 3, 5.
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`belatedly produced to Finjan’s proposed sandbox contentions. In fact, Finjan concedes that its
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`proposed amendments are supported entirely with citations to documents and source code that
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`SonicWall produced in May and November 2018. See Dkt. No. 221 at 1, 3–5, 8. However, in its
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`reply brief, Finjan argues that the new information justifying its amendments is not any particular
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`evidence SonicWall produced, but rather SonicWall’s counsel’s representation that the source
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`code for the GRID sandbox overlaps with the source code for Capture ATP. See Dkt. No. 225 at
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`2. Putting aside Finjan’s improper reliance on an argument made for the first time in its reply
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`brief, the Court has reviewed the communications between counsel on which Finjan relies. See
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`Dkt. No. 215-6, Ex. 3 at 5–9. Those exchanges reflect disagreement between counsel regarding
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`characterization of “GRID,” “CloudAV,” and “Capture ATP.” But even if the Court were to adopt
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`Finjan’s interpretation of these exchanges, it is not clear how SonicWall’s alleged representation
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`about the relationship between the GRID sandbox source code and the Capture ATP source code
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`supports the proposed amendments or justifies Finjan’s delay in seeking leave to amend.
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`Finjan urges the Court to overlook its failure to seek leave earlier because, it argues,
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`SonicWall has had the benefit of disclosure of Finjan’s sandbox contentions since at least May 31,
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`2019 and did not move to strike those contentions for four months. Dkt. No. 216 at 2, 6; Dkt. No.
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`225 at 8. While these arguments might bear on the Court’s consideration of whether SonicWall
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`has suffered prejudice, the Court need not reach the question of prejudice unless it is satisfied that
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`Finjan has been diligent in seeking amendment. O2 Micro Int’l Ltd. v. Monolithic Power Sys.,
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`Inc., 467 F.3d 1355, 1368 (Fed. Cir. 2006); Synopsys, 2016 WL 4945489, at *5. Here, Finjan’s
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`failure to move promptly for leave to amend—before adding new infringement contentions—
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`contravenes one of the principal objectives of the Patent Local Rules: achieving certainty as to the
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`patent holder’s theories of infringement and the accused infringer’s theories of invalidity. See O2
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`Micro, 467 F.3d at 1365–66; Nova Measuring Instruments Ltd. v. Nanometrics, Inc., 417 F. Supp.
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`2d 1121, 1123 (N.D. Cal. 2006) (“The [patent local] rules are designed to require parties to
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`crystallize their theories of the case early in the litigation and to adhere to those theories once they
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`have been disclosed.”).
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`The Court is not persuaded that SonicWall is responsible for Finjan’s improper addition of
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`the sandbox contentions in Finjan’s May 2019 second supplemental infringement contentions, or
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`for Finjan’s eight-month delay in seeking leave to amend. The record contains no evidence that
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`SonicWall misled Finjan about its position with respect to the second supplemental infringement
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`contentions. See O2 Micro, 467 F.3d at 1367 (suggesting that one party’s misleading conduct
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`regarding stipulated amendment might justify delay in seeking leave of court). Rather, in failing
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`to seek leave as the Patent Local Rules require, Finjan took a risk that SonicWall would object to
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`the new infringement contentions. SonicWall did object, and the Court finds the objections are
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`well taken.
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`Finjan has not demonstrated diligence in seeking leave to amend its infringement theories
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`with respect to the sandbox contentions for the ’926, ’305, ’844, ’633, ’154, ’780, ’822, and ’494
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`patents.
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`2.
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`Stats server/URL Thumbprint Database and WXA appliances
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`Finjan’s briefing provides very little discussion in support of its amendments adding the
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`Stats server and URL Thumbprint Database to the contentions for the ’154 patent and adding
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`WXA appliances to the contentions for the ’968 patent. Dkt. No. 216 at 6; Dkt. No. 225 at 7.
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`Finjan argues that it could not have made the proposed amendments prior to May 2019 because
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`SonicWall did not make relevant source code information available for inspection until August
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`2019, thus Finjan was forced to rely on the only information it had available at the time. Dkt. No.
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`216 at 6; Dkt. No. 225 at 7; but see Dkt. No. 232 at 22:19-21 (asserting that SonicWall did not
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`produce source code for Stats server and URL Thumbprint Database until May 2019).
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`The problem with Finjan’s argument is that, by its own admission, there are no differences
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`between its second supplemental infringement contentions served in May 2019 and the proposed
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`amendments it now seeks to make. Finjan does not refer to any source code or other technical
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`documentation made available for the first time in August 2019. In particular, Finjan does not
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`explain how its discovery of any new information ties to its proposed amendments, which is
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`critical to the Court’s assessment of diligence. Synopsys, 2016 WL 4945489, at *3–5.
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`Finjan has not demonstrated diligence in seeking leave to amend with respect to its
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`contentions concerning the Stats server and the URL Thumbprint Database for the ’154 patent, or
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`Case 5:17-cv-04467-BLF Document 241 Filed 03/09/20 Page 9 of 9
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`with respect to the WXA appliances for the ’968 patent.
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`B.
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`Prejudice to SonicWall
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`Because the Court concludes that Finjan has not acted diligently in seeking leave to amend
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`its contentions, it does not reach the question of whether SonicWall would suffer prejudice if the
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`amendments are permitted. O2 Micro, 467 F.3d at 1368; Synopsys, 2016 WL 4945489, at *5.
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`IV. CONCLUSION
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`For the foregoing reasons, Finjan’s motion for leave to amend its infringement contentions
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`is denied.
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`IT IS SO ORDERED.
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`Dated: March 9, 2020
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`VIRGINIA K. DEMARCHI
`United States Magistrate Judge
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`Northern District of California
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`United States District Court
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