Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 1 of 9
`
`DUANE MORRIS LLP
`D. Stuart Bartow (CA SBN 233107)
`dsbartow@duanemorris.com
`Nicole E. Grigg (CA SBN 307733)
`negrigg@duanemorris.com
`2475 Hanover Street
`Palo Alto, CA 94304-1194
`Telephone: 650.847.4150
`Facsimile: 650.847.4151
`DUANE MORRIS LLP
`Joseph A. Powers (PA SBN 84590)
`Admitted Pro Hac Vice
`japowers@duanemorris.com
`Jarrad M. Gunther (PA SBN 207038)
`Admitted Pro Hac Vice
`jmgunther@duanemorris.com
`30 South 17th Street
`Philadelphia, PA 19103
`Telephone: 215.979.1000
`Facsimile: 215.979.1020
`Attorneys for Defendant
`SONICWALL INC.
`
`DUANE MORRIS LLP
`Matthew C. Gaudet (GA SBN 287789)
`Admitted Pro Hac Vice
`mcgaudet@duanemorris.com
`John R. Gibson (GA SBN 454507)
`Admitted Pro Hac Vice
`jrgibson@duanemorris.com
`Robin L. McGrath (GA SBN 493115)
`Admitted Pro Hac Vice
`rlmcgrath@duanemorris.com
`David C. Dotson (GA SBN 138040)
`Admitted Pro Hac Vice
`dcdotson@duanemorris.com
`Jennifer H. Forte (GA SBN 940650)
`Admitted Pro Hac Vice
`jhforte@duanemorris.com
`1075 Peachtree NE, Suite 2000
`Atlanta, GA 30309
`Telephone: 404.253.6900
`Facsimile: 404.253.6901
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`FINJAN, LLC, a Delaware Limited Liability
`Company,
`
`Plaintiff,
`
`v.
`
`SONICWALL INC., a Delaware Corporation,
`
`Defendant.
`
`Case No.: 5:17-cv-04467-BLF-VKD
`
`DEFENDANT SONICWALL INC.’S
`MOTION IN LIMINE TO EXCLUDE DR.
`MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2)
`Date:
`March 18, 2021
`Time:
`1:30 PM
`Courtroom: 3, 5th Floor
`Judge:
`Hon. Beth Labson Freeman
`
`REDACTED
`
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) MOTION IN LIMINE NO. 2, CASE NO. 5:17-CV-04467-BLF-VKD
`
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 2 of 9
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`TABLE OF EXHIBITS REFERENCED1
`
`September 4, 2020 Expert Report of DeForest McDuff, Ph.D
`September 3, 2020 Expert Report of Michael Mitzenmacher, Ph.D.
`Regarding Infringement by SonicWall, Inc. of Patent Nos. 6,804,780;
`6,965,968; and 7,613,926
`October 26, 2020 Deposition Transcript of Michael Mitzenmacher,
`Ph.D.
`November 2, 2020 Deposition Transcript of DeForest McDuff, Ph.D.
`Juniper Networks, Inc.’s Motion for Attorneys’ Fees Pursuant to 35
`U.S.C § 285, Finjan, Inc. v. Juniper Networks, Inc., 3:17-cv-5659-
`WHA, Dkt. 634 (N.D. Cal. Nov. 30, 2020)
`Order RE Request for Attorney Fees, Finjan, Inc. v. Juniper Networks,
`Inc., 3:17-cv-5659-WHA, Dkt. 648 (N.D. Cal. Jan. 9, 2021)
`Marker Advisors, LLC document marked as McDuff Deposition Ex.
`No. 5
`February 28, 2017 Email marked as McDuff Deposition Ex. No. 10
`Order on Motions in Limine, Finjan, Inc. v. Cisco Sys., Inc., No. 17-cv-
`72-BLF, Dkt. 660 (N.D. Cal. June 5, 2020)
`Order Regarding Motions in Limine, Finjan, Inc. v. Blue Coat Sys., No.
`15-cv-03295, Dkt. 404 (N.D. Cal. Nov. 4, 2017),
`January 16, 2014 Email, bearing the bates numbers FINJAN‐SW
`403755 - FINJAN‐SW 403759
`Joint Statement Regarding Dispute Regarding Additional Deposition
`Time of Dr. Christine Meyer, Finjan, Inc. v. Symantec Corp., No. 14-cv-
`02998-HSG, Dkt. 361 (N.D. Cal. Feb. 6, 2018)
`
`Ex. 1
`Ex. 4
`
`Ex. 8
`
`Ex. 10
`Ex. 11
`
`Ex. 12
`
`Ex. 13
`
`Ex. 14
`Ex. 15
`
`Ex. 16
`
`Ex. 17
`
`Ex. 18
`
`
`1All exhibits are attached to the Declaration of Jarrad M. Gunther.
`
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) MOTION IN LIMINE NO. 2, CASE NO. 5:17-CV-04467-BLF-VKD
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 3 of 9
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`Pursuant to FRE 702 and Daubert, SonicWall seeks to exclude Finjan’s damages expert, Dr.
`McDuff, from presenting his Method 1 royalty opinions. Method 1
`
`
`,” and
`.” Ex. 1 ¶ 8(c). Both
`
`results in a worldwide, undiscounted opinion of “
`the royalty base and royalty rate reflect disqualifying methodological flaws.
`Royalty Base: Dr. McDuff’s royalty base fails to account for instances where Finjan accuses
`a combination of products, not the individual products. He includes within his royalty base the entire
`revenue earned from every sale of every product, even if the customer did not buy all of the required
`components (and is thus not an infringement under Finjan’s theory).
`Royalty Rate: Dr. McDuff opines that the
`, Symantec, and Sophos lump sum settlements
`are “highly relevant” and that the jury verdicts confirm that the lump sum amount reflects application
`of 8 and 16% royalty rates. But there is no evidence to suggest that the royalty rates found by the
`juries played any part in the calculation of the lump sum settlement figures agreed to years later.
`
`I.
`
`Dr. McDuff’s Royalty Base Is Not Tied to Finjan’s Actual Infringement Theories
`
`Dr. McDuff’s royalty base includes substantially more than “
`” (Ex. 1 ¶ 8(c)), because it ignores that most of Finjan’s infringement allegations
`require combinations of multiple products, not just the individual products themselves.
`’968 Patent: Finjan’s only infringement theory for the ’968 Patent accuses the combination
`of a SonicWall WXA with a SonicWall Gateway. Ex. 4 ¶ 18; Ex. 8 at 72:25-73:14. Dr. McDuff
`agrees that SonicWall has sold only
` units to date, earning less than
`
`in worldwide revenues. Ex. 10 at 212:14-214:2. Nonetheless, his royalty base for the ’968 Patent
`includes all revenues for every SonicWall Gateway and WXA sold – making no attempt to identify
`the very small portion of Gateways actually sold or used with a WXA (which by definition could not
`exceed
`). Ex. 1, at Attachment B-5.
`This is erroneous as a matter of law, as the mere sale of one component of an allegedly
`infringing combination does not by itself infringe. See Deepsouth Packing Co. v. Laitram Corp., 406
`
`
`
`
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`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
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`

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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 4 of 9
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`U.S. 518, 528 (1972); see also Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 344
`(1961) (“[I]f anything is settled in the patent law, it is that the combination patent covers only the
`totality of the elements in the claim and that no element, separately viewed, is within the grant.”);
`Centillion Data Systems., LLC v. Qwest Commc’ns Int’l, Inc., 631 F.3d 1279, 1288 (Fed. Cir. 2011);
`Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc., 555 F.3d 984, 995 (Fed. Cir. 2009).
`The Court should thus strike Dr. McDuff’s ’968 damages opinions, i.e., that SonicWall would agree
`to pay Finjan a royalty of
`
` to license just the ’968 Patent. Ex. 1, at Attachment B-2. By providing Finjan a
`royalty on Gateway units that Finjan has not shown have been combined with a WXA (and thus do
`not infringe), the royalty improperly “punishes beyond the reach of the statute.” ResQNet.com, Inc.
`v. Lansa, Inc., 594 F.3d 860, 869 (Fed. Cir. 2010); Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d
`1301, 1333-34 (Fed. Cir. 2009) (a patent holder must prove the extent of infringement, and cannot
`recover damages for non-infringing uses). Dr. McDuff’s opinion so far outstrips the revenues from
`the mere
` of the WXA (whose WXA sales generated
`),
`that it cannot possibly be methodologically sound. See Ex. 11 (quoting Judge Alsup’s Daubert Order:
`“that Expert Arst would suggest that Juniper would have been willing to pay an eyepopping $60-$70
`million as a royalty for the sake of $1.8 million in revenue is preposterous. This order therefore agrees
`with Juniper that Expert Arst’s testimony ‘defies basic laws of economics’ such that its unreliability
`renders it inadmissible under FRE 702.’”); Ex. 12 (“Finjan’s first-round ’494 patent damages fiasco
`wasted a great deal of everyone’s time and energy. … Finjan tried to sneak this theory in with its
`expert-damages report, but we caught it, and the Daubert order excluded the trick.”).
`Even as to the
` customers who bought a WXA (the outer limit on ’968 damages), Dr.
`McDuff has no opinion as to how many have actually been combined with a Gateway into an
`allegedly infringing system. Ex. 10 at 211:17-22; id.at 181:14-25 (“So in terms of determining the
`number of units that are infringing, that would be a question for the finder of fact and for the technical
`experts in the case.”). He thus has no opinion on the revenues earned on the combination actually
`alleged to infringe the ’968 Patent: a WXA plus a Gateway.
`Patents Asserted Against Capture ATP. There are two problems with Dr. McDuff’s damages
`2
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 5 of 9
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`opinion regarding the other seven patents as they relate to allegations that include Capture ATP.
`Combinations. The first problem is similar to the failure regarding the ’968 Patent.
`Specifically, for each of the other Patents-in-Suit (’305, ’408, ’844, ’494, ’154, ’780, and ’926
`Patents), many of Finjan’s infringement allegations require the combination of Capture ATP with
`either a Gateway or an ESA. Again, Dr. McDuff has no opinion regarding the revenues from sales
`or the number of customers who bought both components of the accused combinations (as opposed
`to including every sale of a Gateway and ESA, regardless of whether the customer ever bought or
`used Capture ATP). Instead, he admitted his assumption of infringement was not made “with that
`level of specificity” as to what combinations were required (Ex. 10 at 79:17-80:20), and he was “not
`performing that level of technical analysis” to know the product combinations (id.at 180:16-22).
`Consistent with his failure to offer a damages opinion where Capture ATP is required as part
`of a combination, Dr. McDuff presented a table (Table 14) that purports to identify the “Accused
`Products by Patent” – but it simply lists dozens of products without noting whether Finjan’s experts
`allege infringement by a combination (and, if so, how that impacts his damages analysis). Ex. 1 at
`Table 14. This failure to account for the accused combinations will be further compounded if the
`Court’s summary judgment rulings eliminate the Gateway-only theories, such that every infringement
`theory will require Capture ATP (alone or in combination with another product).
`Revenue Period. The second problem on these seven patents is that Dr. McDuff’s royalty
`base erroneously includes tens of millions of dollars generated before Capture ATP was commercially
`available. Dr. McDuff concedes that Capture ATP was not commercially available with the Gateways
`until at least August 1, 2016, and not available with ESAs until February 2017. Ex. 10 at 201:5-9,
`see also id. 131:11-133:23; Ex. 13; Ex. 10 at 201:10-203:8; Ex. 14. It is axiomatic that sales of
`Gateways/ESAs before these dates cannot infringe, because they could not be combined with the
`product (Capture ATP) required for the purported infringement. Nevertheless, Dr. McDuff’s
`unapportioned royalty base includes
` of individual Gateway and ESA
`revenues before these dates. See Ex. 1 at Attachment D-1 – D-17.
`Both of these errors infect Method 1 (
`) and Method 2, which calculates a royalty per infringing unit. See Ex. 1 ¶ 142 & Table 9.
`3
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 6 of 9
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`II.
`
`Dr. McDuff’s Reliance On Outlier Settlement Agreements Should Be Excluded
`Dr. McDuff opines that there
`
`
`, Sophos, and
`”:
`Symantec. Ex. 1 ¶ 45. According to Dr. McDuff, each of these lump sum settlements reflect the
`application of “
`.” Id. There are no facts to support
`this claim, and the Court should exclude reference to these litigation-related settlements. See Ex. 15,
`at 16-17 (“The Court addresses each agreement bearing in mind that these agreements must be viewed
`critically because they may be tainted due to external factors such as threatened or actual litigation.”)
`(citing LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77 (Fed. Cir. 2012)).
`. Dr. McDuff should be precluded from referencing: (1) the Secure Computing jury’s
`$9.18 million verdict and the court’s $37.3 million award; and (2) the
`
`. The Court has previously precluded Finjan’s use of the $37.3 million award, as
`“that award was enhanced after the jury’s finding of willful infringement.” Ex. 15 at 18; Ex. 16, at
`18-20 (excluding
` agreement “for all purposes except for arguing validity as rebuttal” and holding
`that Finjan’s damages expert could not rely on litigation-related settlements “to show the dollar
`amount of licensing” and thus precluding Finjan from introducing evidence regarding “the amount
`of settlement”). There is no reason to deviate from those rulings here. The Court should also exclude
`Dr. McDuff’s opinion connecting the jury’s verdict (and its use of 8 and 16% rates to calculate the
`damages figure) to the lump sum figure found in the
` agreement. The
` settlement followed
`several additional actions and a threat of injunction, among other differentiating facts. Ex. 1 ¶ 45(a).
`The Court has not only previously excluded that figure as “an outlier,” but further excluded it because
`“it is unclear from the record … how and why
` agreed to make that payment.” Ex. 15 at 17-18.
`Dr. McDuff provides no explanation here, offering only that “
`
`.” Ex. 10 at 232:23-24; see also id. at 233:5-234:5. This is nothing more than
`unsupported ipse dixit that is actually contradicted by Finjan’s own statements. See, e.g., Ex. 17
`(FINJAN‐SW 403755) (“
`
`
`”). The Court should preclude Dr.
`
`
`
`4
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 7 of 9
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`McDuff (and fact witnesses) from referencing the Secure Computing verdict and resulting award, and
`the
`, and preclude Dr. McDuff from relying on these amounts.
`Symantec. The Court previously held the Symantec settlement “relevant to the issues of
`damages and non-obviousness.” Ex. 15 at 18. SonicWall, however, respectfully submits that
`establishing the litigation history (which included over a dozen actions across the world) during cross
`will not sufficiently address the prejudicial nature of this settlement and thus requests that the
`
` be excluded here pursuant to FRE 403. If the lump sum figure is permitted into
`evidence, however, there is no support for Dr. McDuff’s opinion that the figure was calculated by
`application of 8% and 16% royalty rates. Dr. McDuff points solely to the trial testimony of Finjan’s
`expert from the 2013 Blue Coat case (5:13-cv-03999-BLF) opining that a reasonable royalty would
`reflect a rate of 6 to 8%. He then notes that “
`
`” Ex. 1 ¶ 45(c). But many
`portions of this verdict were overturned on appeal by the Federal Circuit, which concluded that there
`was no basis to equate an $8-per-user fee to 8-16% royalty rates. Finjan, Inc. v. Blue Coat Sys., 879
`F.3d 1299, 1312 (Fed. Cir. 2018). Finjan also sought nearly $500 million in damages from Symantec
`alone. Ex. 18, at 1-2. Thus, even if the Court allows the lump sum figure, it should preclude Dr.
`McDuff from opining that it was the result of the parties applying 8 and 16% royalty rates.
`
`Sophos. In 2016, a jury awarded Finjan $15 million against Sophos,
`. There is no factual basis
` was based on rates of 8 and 16%. The trial
`to opine, however, that the
`court found it “unclear how the jury calculated its award” of $15 million. Finjan, Inc. v. Sophos, Inc.,
`244 F. Supp. 3d 1016, 1037 (N.D. Cal. Mar. 14, 2017) (holding that it was “not clear that the jury
`adopted Layne-Farrar’s opinion,” and “the jury easily could have calculated an appropriate one-time
`lump sum” using Sophos’ expert’s opinions). The Court should thus exclude any opinion tying the
`Sophos settlement to 8 & 16% rates.
`Finally, if the Court excludes one or more of these settlements, the Court should also exclude
`any mention of the aggregate amount of Finjan’s settlements. See Ex. 15 at 19.
`
`
`
`5
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
`
`

`

`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 8 of 9
`
`Dated: March 4, 2021
`
`
`
`Respectfully Submitted,
`
`
`/s/ Nicole E. Grigg
`
`Nicole E. Grigg (formerly Johnson)
`Email: NEGrigg@duanemorris.com
`DUANE MORRIS LLP
`2475 Hanover Street
`Palo Alto, CA 94304-1194
`
`Matthew C. Gaudet (Pro Hac Vice)
`Email: mcgaudet@duanemorris.com
`John R. Gibson (Pro Hac Vice)
`Email: jrgibson@duanemorris.com
`Robin L. McGrath (Pro Hac Vice)
`Email: rlmcgrath@duanemorris.com
`David C. Dotson (Pro Hac Vice)
`Email: dcdotson@duanemorris.com
`Jennifer H. Forte (Pro Hac Vice)
`Email: jhforte@duanemorris.com
`1075 Peachtree Street, Ste. 2000
`Atlanta, GA 30309
`
`Joseph A. Powers (Pro Hac Vice)
`Email: japowers@duanemorris.com
`Jarrad M. Gunther (Pro Hac Vice)
`Email: jmgunther@duanemorris.com
`30 South 17th Street
`Philadelphia, PA 19103
`
`Attorneys for Defendant
`SONICWALL INC.
`
`
`
`6
`DEFENDANT SONICWALL INC.’S MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1
`(MOTION IN LIMINE NO. 2) CASE NO. 5:17-CV-04467-BLF-VKD
`
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`Case 5:17-cv-04467-BLF Document 361 Filed 03/04/21 Page 9 of 9
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`CERTIFICATE OF SERVICE
`This is to certify that a true and correct copy of DEFENDANT SONICWALL INC.’S
`MOTION IN LIMINE TO EXCLUDE DR. MCDUFF’S METHOD NO. 1 was served by ECF
`on all counsel of record on March 4, 2021.
`
`
`
`
`
`
`
`/s/ Nicole E. Grigg
`Nicole E. Grigg
`
`
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`DEFENDANT SONICWALL INC.’S CERTIFICATE OF SERVICE
`CASE NO. 5:17-CV-04467-BLF-VKD
`
`