Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 1 of 8
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`Juanita R. Brooks (CA SBN 75934) brooks@fr.com
`Roger A. Denning (CA SBN 228998) denning@fr.com
`Jason W. Wolff (CA SBN 215819) wolff@fr.com
`John-Paul Fryckman (CA 317591) fryckman@fr.com
`K. Nicole Williams (CA291900) nwilliams@fr.com
`FISH & RICHARDSON P.C.
`12860 El Camino Real, Ste. 400
`San Diego, CA 92130
`Telephone: (858) 678-5070 / Fax: (858) 678-5099
`
`Proshanto Mukherji (Pro Hac Vice) mukherji@fr.com
`FISH & RICHARDSON P.C.
`One Marina Park Drive
`Boston, MA 02210
`Phone: (617) 542-5070/ Fax: (617) 542-5906
`Robert Courtney (CA SNB 248392) courtney@fr.com
`FISH & RICHARDSON P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`Phone: (612) 335-5070 / Fax: (612) 288-9696
`
`Attorneys for Plaintiff
`FINJAN LLC
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`(SAN JOSE DIVISION)
`FINJAN LLC., a Delaware Limited Liability
`Case No. 5:17-cv-04467-BLF (VKD)
`Company,
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`Plaintiff,
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`v.
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`PLAINTIFF FINJAN LLC’S MOTION IN
`LIMINE NO. 2 TO PRECLUDE CERTAIN
`DAMAGES TESTIMONY BY DR.
`BECKER
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`SONICWALL, INC., a Delaware Corporation,
`
`Defendant.
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`Date: March 18, 2021
`Time: 1:30 PM
`Hon. Beth Labson Freeman
`Ctrm: 3, 5th Floor
`
`REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED
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`Case No. 17-cv-04467-BLF (VKD)
` FINJAN LLC’S MOTION IN LIMINE NO. 2
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 2 of 8
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`I.
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`INTRODUCTION
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`Pursuant to Federal Rules of Evidence 401, 402, 403, and 702, Finjan LLC (“Finjan”)
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`respectfully requests that the Court exclude from presentation to the jury damages opinions by
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`Stephen Becker, Ph.D. that (1) are based on a legally improper damages model, or (2) rely on
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`post-Complaint events not cognizable under a properly formed royalty analysis.
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`II.
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`ARGUMENT
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`The model proposed by Dr. Becker, SonicWall’s damages expert, contravenes settled law
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`by basing damages on SonicWall’s pre-notice revenues, conflicting with 35 U.S.C. § 287(a). It
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`also ignores years of infringement for which Finjan is entitled to relief, conflicting with § 284.
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`Dr. Becker also improperly relies on events long after the hypothetical negotiation, namely
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`Finjan’s change in ownership in late 2020. The Court should preclude such opinions.
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`A.
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`Damages Start No Earlier Than June 10, 2014, and Could Extend to 2025
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`In this case, damages begin on the date SonicWall received actual notice of Finjan’s
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`claims. The dates of notice, and thus the damages start dates, are disputed, with SonicWall
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`consistently urging later dates than Finjan. In no event might damages for this case begin before
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`June 10, 2014 (Finjan’s date for the ’926 patent), and in no event would damages for other patents
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`begin before other dates Finjan has urged (from Sept. 2014 (’780 patent) through the date of the
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`complaint). Finjan’s damages expert DeForest McDuff, Ph.D. has collected the earliest damages
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`start dates in a table. See Exh. 10 ¶¶ 105–07. As to the end of damages, they could extend until
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`the expiration of the ’154 patent, which is December 12, 2025.
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`B.
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`Dr. Becker Relied on Pre-Notice Revenue and Excluded Years of Infringement
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`Dr. Becker’s damages model (reflected in his report (Exh. 7), with errata (Exh. 8) and
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`supplementation (Exh. 9)) does not reflect the appropriate start of damages, under any party’s
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`contentions. It estimates damages based on SonicWall revenues from long before the start of
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`damages, going as early as February 1, 2010 for the ’780 patent. See generally SLB-2A–2J; SLB-
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 3 of 8
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`4A–4–J; see also Exh. 7 ¶¶ 107–12, 339–40, 421, 429.1 Dr. Becker’s model ignores years of
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`accused SonicWall revenue. For the ’780 patent, Dr. Becker’s model stops at January 31, 2015,
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`ignoring three years of subsequent term. For the ’154 patent, the model is worse; awarding
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`damages on revenues on February 1, 2014 (i.e., long before damages start on March 2017), and
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`stopping on January 31, 2019 (i.e., years before Dec. 12, 2025 expiration). See SLB-2J; SLB-4J.
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`At deposition, Dr. Becker confirmed that his model relied on pre-notice revenue. Exh. 9 at
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`113:5–16. He also confirmed that, because of this, his royalty was mostly attributable to pre-
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`notice revenue. Id. at 134:7–12. And his “lump sum” computations for patent royalties (in
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`Exhibits SLB-1A and SLB-1B) were similarly based on pre-notice revenues. Id. at 141:7–13.
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`And he confirmed that all his damages computations relied on pre-notice revenues. Id. at 142:22–
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`143:15
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`.
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`C.
`Legal Standards
`Where, as here, a patentee relies on actual notice to the infringer to support infringement,
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`the Patent Act makes clear that any damages must be limited to “infringement occurring after such
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`notice.” 35 U.S.C. § 287(a). The Federal Circuit expressly held that this provision of § 287 is a
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`“limitation on damages, and not an affirmative defense.” Arctic Cat Inc. v. Bombardier
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`Recreational Products Inc., 876 F.3d 1350, 1366 (Fed. Cir. 2017) (emphasis added). However,
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`once the notice requirement has been satisfied, a patentee who proves infringement has an
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`absolute right to appropriate damages for infringing post-notice acts. Lindemann Maschinenfabrik
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`GmbH v. Am. Hoist & Derrick Co., 895 F.2d 1403, 1406 (Fed. Cir. 1990) (“In patent law, the fact
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`of infringement establishes the fact of damage because the patentee’s right to exclude has been
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`violated.”). These considerations are central to determination of the “royalty base” (the corpus of
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`1 The “SLB” exhibits were part of Dr. Becker’s report, and are in Exhs. 7, 8, and 12.
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 4 of 8
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`value to which the royalty rate is applied) for damages purposes. “The royalty base for reasonable
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`royalty damages cannot include activities that do not constitute patent infringement, as patent
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`damages are limited to those ‘adequate to compensate for the infringement.’” AstraZeneca AB v.
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`Apotex Corp., 782 F.3d 1324, 1343 (Fed. Cir. 2015) (quoting 35 U.S.C. § 284, emphasis added).
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`D.
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`Because It Bases Damages on Pre-Notice Acts for All Asserted Patents, Dr.
`Becker’s Model Contravenes the Patent Act and Appellate Authority
`To Finjan’s knowledge, no authority from the Federal Circuit or from any other tribunal
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`authorizes a royalty on revenues outside the limits in § 287(a). The statute says the opposite:
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`[Absent constructive notice,] no damages shall be recovered . . . ,
`except . . . for infringement occurring after [actual] notice.
`35 U.S.C. § 287(a) (emphasis added). The Federal Circuit has reminded courts and litigants to
`take care when computing a royalty base for damages purposes. “The royalty base for reasonable
`royalty damages cannot include activities that do not constitute patent infringement, as patent
`damages are limited to those ‘adequate to compensate for the infringement.’” AstraZeneca, 782
`F.3d at 1343 (Fed. Cir. 2015) (quoting 35 U.S.C. § 284).
`AstraZeneca’s logic should control here. There, the Federal Circuit reversed a district
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`court’s determination that the royalty base for patent damages should include revenues during a
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`“pediatric exclusivity period” that ran past the expiration of the patent. Id. at 1343. Reversing,
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`AstraZeneca pointed out the “familiar principle that the royalty due for patent infringement should
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`be the value of what was taken—the value of the use of the patented technology.” Id. at 1344
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`(quote marks omitted). Under that principle, it was improper to include post-expiration in an
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`infringement revenue base because those revenues took nothing from the patentee attributable to
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`the patent. Here, the presentation is different but the outcome should be the same. By operation
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`of § 287, Finjan has no right under to pre-notice damages, and has never sought pre-notice
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`damages. Dr. Becker’s model, by including pre-notice revenues (to the exclusion of post-notice
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`revenues, discussed below) in his base is improper, as the deficient base was in AstraZeneca.
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 5 of 8
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`E.
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`Because It Accords Zero Value to Late-Term Infringement for the ’780, ’968,
`’305, ’408, and ’154 Patents, Dr. Becker’s Model is Doubly Improper
`Dr. Becker’s model ignores infringement more than five years after the hypothetical
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`negotiation. Such a five year horizon omits years of revenue:
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`Dr. Becker’s Revenue Period
`Patent
`Unaddressed Term
`End of Damages
`2 years, 280 days
`Feb. 1, 2010 through Jan. 31, 2015
`’780 patent November 6, 2017
`6 years, 218 days
`Feb. 1, 2014 through Jan. 31, 2017
`’968 patent September 5, 2023
`1 year, 145 days
`Feb. 1, 2014 through Jan. 31, 2019
`’305 patent August 18, 2020
`2 years, 119 days
`Feb. 1, 2014 through Jan. 31, 2019
`’408 patent May 27, 2021
`6 years, 317 days
`’154 patent December 12, 2025 Feb. 1, 2014 through Jan. 31, 2019
`Again, Dr. Becker’s approach is irreconcilable with the law. A patentee is entitled to a
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`reasonable royalty for all infringement, not just a fraction. See, e.g., 35 U.S.C. § 284; see also
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`Dow Chem. Co. v. Mee Indus., Inc., 341 F.3d 1370, 1381–82 (Fed. Cir. 2003) (“The statute
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`[§ 284] is unequivocal that the distict court must award damages in an amount no less than a
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`reasonable royalty.”) (emphasis added); Lindemann Maschinenfabrik GmbH v. Am. Hoist &
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`Derrick Co., 895 F.2d 1403, 1406 (Fed. Cir. 1990) (“[t]he fact of infringement establishes the fact
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`of damage because the patentee’s right to exclude has been violated.”) (emphasis added). The
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`Court should not permit Dr. Becker to present a damages model under which Finjan would be
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`uncompensated—and SonicWall would receive a windfall—for years of infringement.
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`F.
`No Part of Georgia-Pacific Justifies Dr. Becker’s Distorted Model
`Searching for support, Dr. Becker cited Georgia-Pacific’s hypothetical negotiation
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`framework. E.g., Exh. 8 ¶¶ 423–24. But that case cannot overwhelm § 287’s bar on pre-notice
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`damages, or § 284’s requirement of a remedy for infringement. While the hypothetical negotiation
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`pre-dates the litigation, it does not permit an accused infringer to propose blinding the jury to the
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`extent of infringement. The negotiation’s point is to help the jury “assess damages for post-notice
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`infringement relative to market conditions at the point in time when infringement began.” Power
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 6 of 8
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`Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1379 (Fed. Cir. 2013)
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`(emphasis added). That objective would be frustrated if juries could hear about hypothetical
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`negotiations that pay on pre-notice revenue (which § 287 forecloses), and withhold on
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`infringement later (leaving Finjan without the remedy required by § 284).
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`For this reason, the Federal Circuit has reminded courts they are “not at liberty, in
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`conducting the [hypothetical negotiation] methodology, to abandon entirely the statutory standard
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`of damages ‘adequate to compensate’ for the infringement.” Fromson v. W. Litho Plate & Supply
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`Co., 853 F.2d 1568, 1575 (Fed. Cir. 1988), overruled on other grounds by Knorr-Bremse Systeme
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`fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004). Proper damages
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`models “look to events and facts that occurred thereafter,” such as notice dates and infringement
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`deep into the patent term. See id. Dr. Becker’s model fails that requirement. By blinding itself to
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`the actual damages periods—periods beginning as early as 2014 and extending as late as 2023—
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`Dr. Becker’s analysis contravenes deep-rooted damages concepts. Presentation to the jury would
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`be unlawful and deeply prejudicial to Finjan because of the confusion that would result. The
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`Court should enter an order precluding Dr. Becker from presenting such analysis to the jury.
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`G.
`Finjan’s Change in Ownership is Not Part of a Proper Damages Analysis
`Dr. Becker claims, without justification, that computation of a royalty should be limited by
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`the late 2020 acquisition of Finjan by Fortress. E.g. Exh. 7 at ¶ 447. Even Dr. Becker’s own
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`analysis does not deem the acquisition to be a consideration at the hypothetical negotiation.
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`Finjan is aware of no reasonable basis for telling the jury that damages should take the acquisition
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`into account when no damages expert has opined it would be considered at the hypothetical
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`negotiation. Though recognizing that this Court in another matter held the acquisition potentially
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`relevant to damages, in this case nothing in Dr. Becker’s report supports opining on it to the jury.
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`Presentation would be prejudicial, as it would lead to confusion and improper damages analysis.
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`The Court should preclude Dr. Becker’s opinions based on the acquisition at trial.
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 7 of 8
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`Respectfully Submitted,
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`By: /s/ Robert Courtney
`Juanita R. Brooks (CA SBN 75934)
`brooks@fr.com
`Roger A. Denning (CA SBN 228998)
`denning@fr.com
`Jason W. Wolff (CA SBN 215819)
`wolff@fr.com
`John-Paul Fryckman (CA 317591)
`fryckman@fr.com
`K. Nicole Williams (CA 291900)
`nwilliams@fr.com
`FISH & RICHARDSON P.C.
`12860 El Camino Real, Ste. 400
`San Diego, CA 92130
`Phone: (858) 678-5070 / Fax: (858) 678-5099
`
`Proshanto Mukherji (Pro Hac Vice)
`mukherji@fr.com
`FISH & RICHARDSON P.C.
`One Marina Park Drive
`Boston, MA 02210
`Phone: (617) 542-5070/ Fax: (617) 542-5906
`
`Robert Courtney (CA SNB 248392)
`courtney@fr.com
`FISH & RICHARDSON P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`Phone: (612) 335-5070 / Fax: (612) 288-9696
`
`Attorneys for Plaintiff
`FINJAN LLC
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`Dated: March 4, 2021
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`Case No. 17-cv-04467-BLF (VKD)
`FINJAN LLC’S MOTION IN LIMINE NO. 2
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`Case 5:17-cv-04467-BLF Document 370 Filed 03/04/21 Page 8 of 8
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true and correct copy of the above and foregoing
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`document has been served on March 4, 2021 to all counsel of record who are deemed to have
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`consented to electronic service via the Court’s CM/ECF system. Any other counsel of record will
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`be served by electronic mail and regular mail.
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`/s/ Robert Courtney
`Robert Courtney
`courtney@fr.com
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`Case No. 17-cv-04467-BLF (VKD)
`FINJAN LLC’S MOTION IN LIMINE NO. 2
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