Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 1 of 9
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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 SBN 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)
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`FINJAN LLC., a Delaware Limited Liability
`Company,
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`Case No. 5:17-cv-04467-BLF (VKD)
`
`Plaintiff,
`
`v.
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`SONICWALL, INC., a Delaware Corporation,
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`Defendant.
`
`PLAINTIFF FINJAN LLC’S OPPOSITION
`TO DEFENDANT SONICWALL INC.’S
`MOTION IN LIMINE TO EXCLUDE DR.
`MCDUFF’S METHOD NO. 1 (MOTION IN
`LIMINE NO. 2) [DKT. 361]
`
`Date: March 18, 2021
`Time: 1:30 PM
`Hon. Beth Labson Freeman
`Ctrm: 3, 5th Floor
`
` REDACTED VERSION OF DOCUMENT SOUGHT TO BE SEALED
`
`Case No. 17-cv-04467-BLF (VKD)
` FINJAN’S OPPOSITION TO MOTION IN LIMINE NO. 2
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 2 of 9
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`TABLE OF REFERENCED EXHIBITS1
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`Description
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`Exhibit
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`Expert Report of DeForest McDuff, Ph.D. dated September 4, 2020
`
`Expert Report of Dr. Eric Cole Regarding Technology Tutorial and
`Infringement by SonicWall, Inc. of Patent Nos. 6,154,844; 7,058,822;
`7,647,633; and 8,677,494 dated 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 dated
`September 3, 2020
`Expert Report of Dr. Nenad Medvidovic Regarding Infringement by SonicWall,
`Inc. of Patent Nos. 8,225,408; 7,975,305 and 8,141,154 dated September 3,
`2020
`Deposition Transcript of DeForest McDuff, Ph.D. taken November 2, 2020
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`A
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`B
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`C
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`D
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`E
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`1 All exhibits are attached to the Omnibus Declaration of Robert Courtney.
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`Case No. 17-cv-04467-BLF (VKD)
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 3 of 9
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`I.
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`INTRODUCTION2
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`SonicWall’s motion is overbroad and presents fact disputes in the guise of a pretrial
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`motion. The parties’ agreement as to ’968 (see note) narrows the disputed issues, but for what
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`remains SonicWall fails to establish a case for preclusion, as to either Dr. McDuff’s royalty base,
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`or the licenses he relied on to determine the royalty rate. The Court should deny the motion.
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`II.
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`BACKGROUND
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`Economist DeForest McDuff, Ph.D.’s report describes that the most appropriate royalty
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`structure here is based on a reasonable royalty calculated by applying a royalty rate (derived from,
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`inter alia, evidence of licensing history) to an apportioned royalty base (derived from accused
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`revenues). E.g., Exh. A at ¶ 161. SonicWall calls this Dr. McDuff’s “Method 1,” and attacks its
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`royalty base (as to dates of infringement) and its royalty rate (as to the licensing history).
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`Royalty base. As is typical for damages, Dr. McDuff assumed Finjan will prove liability,
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`on the lines set forth by technical experts. Dr. McDuff’s report states assumptions, based on
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`expected expert testimony. This included assumptions about the start of damages, and about the
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`infringing products. See Exh. A at ¶¶ 100, 106 (dates). For convenience, these are:
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`’844 patent
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`Start
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`
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`(1) Gateway products; (2) Capture ATP products;
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`End Jan. 29, 2017
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`(3) Gateway products + Capture ATP (Exh. B ¶¶ 19–20)
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`’494 patent
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`Start
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`(1) Capture ATP products (id. ¶¶ 21–22)
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`End Jan. 29, 2017
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`’780 patent
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`Start
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`(1) Capture ATP products; (2) Email Security + Capture
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`End Nov. 6, 2017
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`ATP (Exh. C ¶¶ 15–16)
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`2 The parties have agreed to dismissal of claims under the ’968 patent, with each party bearing its
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`own fees and costs. Because any ’968 disputes are moot, no such issues are discussed herein.
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`Case No. 17-cv-04467-BLF (VKD)
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 4 of 9
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`’408 patent
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`Start
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`(1) Capture ATP products (Exh. D ¶¶ 22–23)
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`End Nov. 6, 2017
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`Dr. McDuff computed an apportioned revenue base using SonicWall’s revenues for
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`accused products, assuming that all products within the date period above infringed. Exh. A at
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`¶¶ 117–18; see also id. Att. D-8. After apportioning, Dr. McDuff applied an appropriate royalty
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`rate (discussed below) to the apportioned revenue base, thus reaching his damages estimate.
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`Royalty rate. Dr. McDuff’s report describes his computation of the most economically
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`reasonable royalty rate in detail, and a full summary is beyond this response. See id. ¶¶ 37–51,
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`120–28. Briefly, Dr. McDuff demonstrated how the evidence indicates a royalty rate from the
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`hypothetical negotiation of
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`. Id. ¶ 128. These rates had
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`support throughout the record, but Dr. McDuff relied particularly on three Finjan licenses that,
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`based on the evidence, are most relevant to this case: a 2012 license to
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`, a 2017 license to
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`, and a 2018 license to
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`. Id. ¶¶ 45, 51, 127–28. For each, Mr. McDuff described
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`how the evidence indicated observed rates of
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` and in each infringement and validity
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`had been established. Id. Dr. McDuff’s model adopted the observed
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` rates, applying
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`them to the apportioned revenue base to compute damages. Id. ¶¶ 139, 159–163.
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`III. ARGUMENT
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`SonicWall’s motion substitutes assertion for evidence and seeks to supplant the jury’s role.
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`No part of it supports precluding that Dr. McDuff’s “Method 1” at trial.
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`A.
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`Dr. McDuff’s Royalty Base is Backed By the Record
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`SonicWall errs when it contends that any part of the royalty base, whether regarding the
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`“combination” infringement theories, or the revenue period, warrants preclusion.
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`As to SonicWall’s “combination” assertion (Mot. 3), for every asserted patent save one
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`Finjan’s technical experts have tendered single-product opinions of infringement, i.e., opinions
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`establishing that SonicWall is practicing Finjan’s entire patented invention within a single product
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 5 of 9
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`such as “Capture ATP,” or SonicWall’s “Gateways.” Dr. McDuff’s report computes apportioned
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`revenue bases for each such product. E.g., Exh. A, Att. D-8. Those single-product bases are
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`wholly unaffected by SonicWall’s “combination” assertions, and SonicWall’s motion alleges no
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`defect there—yet seeks preclusion anyway, which is a basis for denial.
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`Two experts also describe infringement when one SonicWall product is combined with
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`another. Should the jury find infringement only by combination, Dr. McDuff’s report supports the
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`computation of damages. The McDuff report supports mechanically adjusting the apportioned
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`royalty base for the relevant patent based on the number of infringing units for the less-sold
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`product in the combination. See, e.g., id. Att. I-3 (describing computation of infringing unit sales).
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`With such an adjustment, Dr. McDuff’s apportioned royalty base would comprise the apportioned
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`revenue from (1) all of the less-sold (on a unit basis) product in the combination, and (2) a
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`matching number of units from the more-sold product.
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`SonicWall’s criticism that Dr. McDuff’s report “lists dozens of products without noting
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`whether Finjan’s experts allege infringement by a combination” is off point. It is for technical
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`experts, not economic experts, to describe the theories of infringement. Dr. McDuff’s report
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`properly provides evidence and opinions useful to the jury to compute damages. No preclusion as
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`to the “combinations” is warranted and, even should the Court find otherwise, preclusion would
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`not extend to any single-product royalty bases.
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`As to SonicWall’s “revenue period” assertion (Mot. 4), it is part-mooted by the Court’s
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`determination that
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` products were not sold until
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`. D.I. 381
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`at 15. Dr. McDuff’s report readily permits recomputation of damages to accommodate that
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`determination by removing from the royalty base sales of ES products before that date. SonicWall
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`does not contend otherwise. As to the remainder of the motion, SonicWall attempts to have a fact
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`issue improperly resolved via MIL. The parties dispute when infringement began for “Capture
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`ATP.” See generally D.I. 327-4. Dr. McDuff was entitled to assume that Finjan would prevail on
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 6 of 9
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`that dispute, and he formed no opinion on the matter. That Dr. McDuff did not dispute statements
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`as to the dates in certain SonicWall documents presented at deposition is not a “concession,” as
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`SonicWall puts it. It is an acknowledgement that deposition exhibits say what they say. Proving a
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`fact in court requires more, and SonicWall should not be permitted to evade the issue in a pre-trial
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`motion. Regardless, Dr. McDuff specifically testified that were a court to determine that some
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`products in his apportioned royalty base were non-infringing, “I would just re-run the numbers and
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`I could [ ] get a different total,” i.e., he could readily recompute the royalty base using the new
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`information. Exh. E at 194:18–195:5. Such recomputation would apply both to Dr. McDuff’s
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`“Method 1” and “Method 2” analyses. The dispute over timing a fact dispute not appropriate for a
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`preclusion motion on a damages expert’s economic testimony. It should be denied.
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`B.
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`Dr. McDuff’s Use of the
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` and
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` Licenses is Appropriate
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`SonicWall’s plea for preclusion as to the licenses, and evidence surrounding them, is
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`unwarranted by anything in the orders SonicWall cites or the alleged prejudice SonicWall
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`suggests. Mot. 4 (citing Cisco (D.I. 365-15 (Mot. Ex. 15)), Blue Coat (D.I. 365-16 (Mot. Ex. 16)).
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`. Though acknowledging Cisco, Finjan believes the law does not support precluding
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`the jury learning that the license fee paid by
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` was
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`, or that a jury awarded $9.18
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`million. These amounts are direct evidence of the value of Finjan’s rights once issues of
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`infringement and validity—which are assumed settled in the hypothetical negotiaton—are settled.
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`SonicWall cites LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77 (Fed. Cir. 2012),
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`but LaserDynamics’ caution was not to exclude every license following litigation, nor would such
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`make sense. Litigation is the vehicle by which a patentee’s rights under the law are settled.
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`LaserDynamics’ admonishment of vigilance against over-reliance on licenses from coercive
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`litigations makes sense (694 F.3d at 78 (describing “unique coercive circumstances”)), but
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`SonicWall submits no evidence that the Intel litigation was “coercive,” or otherwise indicative of
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`anything other than a jury and court performing their constitutional functions of settling rights.
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 7 of 9
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`The presence of an injunction does not suffice, as it was an injunction a court deemed Finjan
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`lawfully entitled to. But even setting this aside, SonicWall’s proposal to additionally preclude the
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`Secure Computing jury’s recitation of 8% and 16% royalty rates is baseless. SonicWall provides
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`no rational basis why these rates, adopted by a jury and relied on by Dr. McDuff, should be
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`precluded. E.g., Exh. A at ¶¶ 45, 51, 127. They are public evidence of valuation for Finjan
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`patents, appropriately used as such in a damages model. There is no case for preclusion.
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`. In Cisco the Court correctly held that no aspect of the
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` license, or its
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`history (including litigation before this Court in Finjan v. Blue Coat) warranted preclusion. Cisco
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`at 18. SonicWall’s argument for a different outcome is baseless. Similar to
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`, the history
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`surrounding the
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` license is public information about the value of Finjan’s rights,
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`expressly relied on by Dr. McDuff. E.g., Exh. A at ¶ 45. There is no basis for preclusion.
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`SonicWall’s characterization that “many portions” of Blue Coat were reversed on appeal is
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`incomplete; this did not include the rates or award relied on by Dr. McDuff. See Finjan, Inc. v.
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`Blue Coat Sys., 879 F.3d 1299, 1312 (Fed. Cir. 2018).
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`. SonicWall’s complaint as to
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` is yet another fact dispute in the guise of a
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`pretrial motion. Dr. McDuff’s report describes in detail how the history of the
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` license,
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`including litigation, supports observed rates of
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`. Exh. A at ¶ 45. SonicWall
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`disagrees, claiming there is another explanation for the evidence. Mot. 5. SonicWall’s allegation
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`that there is “no factual basis” for Dr. McDuff’s opinions regarding the
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` license simply
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`omits the extensive analysis of this agreement in Dr. McDuff’s report (Id. ¶¶ 45, 51, 127), which
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`expressly gives that basis. These are cross-examination issues at best. They fall far short of
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`warranting the drastic relief of preclusion, particularly in view of Dr. McDuff’s explanations of
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`relevance and reliance. The Court should deny SonicWall’s motion.
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`Case No. 17-cv-04467-BLF (VKD)
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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 8 of 9
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`Dated: March 11, 2021
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`
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`Respectfully Submitted,
`
`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 SBN 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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`Case 5:17-cv-04467-BLF Document 399 Filed 03/11/21 Page 9 of 9
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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 11, 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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