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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`THE HONORABLE CATHY ANN BENCIVENGO
`
`
`FINJAN, INC., )
` )
` Plaintiff, ) CASE NO. 17CV183-CAB-BGS
` )
` vs. ) FRIDAY, FEBRUARY 21, 2020
` )
`ESET, LLC and ESET SPOL. S.R.O.,) 2:00 P.M.
` )
` Defendants. )
`
`
`
`Reporter's Transcript of Motions in Limine Hearing
`Pages 1-70
`
`
`For The Plaintiff:
`
` Kramer Levin Naftalis & Frankel, LLP
` Paul Andre
` James Hannah
` Kristopher Kaskins
` 990 Marsh Road
` Menlo Park, California 94025
`
`
`For The Defendants:
`
` Eversheds Sutherland (US) LLP
` Justin E. Gray
` Nicola A. Pisano
` Scott A. Penner
` Jose Patino
` Regis Worley
` 12255 El Camino Real, Suite 100
` San Diego, California 92130
`
`Proceedings recorded by stenography, transcript produced by
`computer assisted software
`
`Mauralee Ramirez, RPR, CSR No. 11674
` Federal Official Court Reporter
`ordertranscript@gmail.com
`
`
`
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` San Diego, California; Friday, February 21, 2020; 2:00 p.m.
`(Case called)
`MR. ANDRE: Good afternoon, your Honor. Paul Andre
`for Finjan. With me today is James Hannah and Kris Kastens.
`MR. KATSTENS: Good afternoon, your Honor.
`MR. ANDRE: And with me today is our client, Ms. Julie
`Mar-Spinola and Ann Taylor.
`THE COURT: Thank you.
`MR. PISANO: Good morning, your Honor. Nic Pisano of
`Eversheds Sutherland on behalf of the defendants. With me
`today is Scott Penner, Justin Gray, Joe Patino, and Regis
`Worley.
`
`THE COURT: Thank you. Good afternoon. We'll start
`with the motions in limine and then we'll talk about the
`pretrial order and then some trial specifics. I'll start with
`Finjan's motions. The first one is at 746, motion in limine 1,
`precluding irrelevant evidence of Finjan products. And I guess
`to some extent, the Court thinks this sort of counterparts with
`the preliminary filed by ESET at 745, number 5 -- I'm sorry,
`not 5 -- yes, at 5. The commercial success issue. If I'm
`following this correctly, you don't want them talking about
`your products but you want to offer your products as evidence
`of commercial success. So you can't have it both ways. If you
`are going to have someone testify -- and I know I have an
`outstanding issue on the commercial success expert as to
`
`
`
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`whether or not he can lay a foundation that he has determined
`that these patents were practiced in these products and what
`his basis for that is and that there's nexus to the sale of the
`products based on them encompassing the patented technology.
`He can testify to that subject to a motion to strike if he
`doesn't prove it, but they want to then argue, as I understand,
`that those products, in fact, do not practice the patents. Is
`that right?
`MR. ANDRE: Well, your Honor, I think what we're
`concerned about is they're going to use the product-to-product
`comparison. And they actually somewhat admitted that in their
`opposition.
`THE COURT: Well, they're not going to do that and I'm
`not going to let them do that and they know that would be
`improper. But, again, in the aspect of using your products to
`the extent that you're going to offer them in your case as
`evidence of a commercial success of these patents, they're
`certainly entitled to talk about them.
`MR. ANDRE: The only thing we're going to offer our
`products for in the secondary considerations of non-obviousness
`for the praise at the time that the products were released.
`And so it's not the commercial success, it's praise of the
`people. But if that's going to be an issue, we prefer not to
`do -- not to bring them up at all.
`THE COURT: If you use your products and that the
`
`
`
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`products are praised as evidence that the patents are not
`obvious, you still have to establish that the reason they're
`being praised is because they encompass the patented subject
`matter, and then they can fully and fairly address whether or
`not those products that you're using as evidence of praise do,
`in fact, encompass the patented subject matter.
`MR. ANDRE: And I think that's fair, your Honor. I
`think what we were concerned about in this particular instance
`is them saying that our product was no good and their product
`is great. That's what they said in their opposition that's
`what they're going to do. They said, and quote, that they're
`going to show that the bio-superior planes did not work for its
`intended purpose, unlike ESET's product which performed
`superbly. And so that's what we're concerned about.
`It's like, we have a great product, their product is
`no good so, therefore we, can't infringe their patents. That's
`our big issue. And so if it comes down to it, like I said, we
`may not use the praise issue. But that's the only thing we'd
`use our products for, other than the fact we had products at
`one time, we sold products, but nothing other than the fact we
`sold them, so.
`THE COURT: All right. I'm going to deny this without
`any prejudice. If somehow they start down that road, you're
`certainly free to object, and the Court will consider any
`relevant motions to strike and disregard.
`
`
`
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`MR. ANDRE: Yeah.
`THE COURT: But if your concern was that the intent
`was to say our product is better than their product and,
`therefore, our product doesn't infringe, that's a non-sequitur,
`and I can't imagine they'd be going there. If it comes up as a
`matter of damages though or as a matter of obviousness,
`saying -- and there's no loss profits claim here --
`MR. ANDRE: That's right.
`THE COURT: -- so what your products did and how they
`performed is, again, not really relevant.
`MR. ANDRE: In that regard, they brought in a testing
`expert who went back and bought a product on eBay from Lord
`knows where. It wasn't from us. Tried getting an old product
`and they tested and said, See, it doesn't work. And they're
`going to try to present that testing expert and say we tested
`one of their old products and it didn't work.
`THE COURT: I don't think he's in here.
`MR. ANDRE: So that's what we're concerned about.
`It's that inference that our product doesn't work, therefore,
`they can't infringe the patent.
`THE COURT: Well, again, understanding your point of
`reference for this motion, the motion is denied. It's not
`precluding them from discussing Finjan products that are
`brought into the case as evidence either with regard to the
`damages analysis or commercial success or praise or anything
`
`
`
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`else where your products are being used by you to support your
`claims in the case. They can certainly address them.
`MR. ANDRE: To the point we notify them that we're not
`going to use our products, I assume then they can't bring our
`products into the case as well?
`THE COURT: If there's a reason you need to do that,
`we can certainly address it after you reach that understanding
`and whether or not the Court would allow it.
`All right. 747, motion in limine 2 appears to be moot
`based on your stipulation. They're not going to call you
`pirates or trolls. However, they want to call you a
`non-practicing entity. The Court does not consider that to be
`pejorative. That is commercially what you are. What you would
`offer in the alternative for them to describe you?
`MR. ANDRE: We actually have a product in the market.
`It's a mobile app.
`THE COURT: Are you practicing these patents?
`MR. ANDRE: Not these five patents in case. We are
`practicing -- well, these patents are expired, so. But we did
`practice some of the patents at one time, not these five in
`this case. But to say that we're not a -- what they're going
`to try to say, and you'll see this related to the Finjan
`entities as well, Finjan has multiple corporate structures and
`this one particular structure holds the patents. Our other
`corporate structures are selling mobile apps and they're doing
`
`
`
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`other businesses, so that's what we're concerned about.
`They're going to try to portray us as some type of a troll
`without using those terms.
`THE COURT: Well, the Court is not going to preclude,
`certainly, with regard to expert testimony on damages in
`discussing the various factors of how you would go into a
`hypothetical negotiation that with regard to these patents
`you're not practicing them. I don't think that's a
`misrepresentation. And I don't think that that's a pejorative
`to a jury. Within our industry, you might. But, you know,
`this jury is not oh, yeah, troll. Yeah, that sounds bad.
`Pirate, that sounds bad. Nonpracticing. Universities are
`nonpracticing entities. That doesn't make them evil.
`MR. ANDRE: That's true.
`THE COURT: Based on their representation that they're
`not going to call you bad things, I'm going to deny that as
`moot. If somehow this goes off the rails, we can address it at
`trial. We'll get to that when we get to ESET's motions.
`All right 748, number 3, exclude pending and
`irrelevant proceedings, which are... Yes. You each are going
`to get a set amount of time to try your case, and I don't want
`to be discussing -- it's your time. You can talk about
`irrelevant things, but that's not helpful. Anything that's
`pending or irrelevant should not be discussed.
`Now in ESET's response, they talked about the history
`
`
`
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`of the '962 patent in particular because it is in the family
`tree of two of the patents at issue in the case and that
`findings of invalidity of obviousness as to that patent are
`relevant to the analysis that their invalidity expert would be
`making to say these are the claims of those patents. They are
`indistinguishable to the claims in this patent, or at least
`what's added is not novel, and it's a conclusive finding that
`those claims are invalid.
`So I don't have a problem with them going into the
`'962 history for that purpose only, but I don't think anyone
`has presented that there is any other history here of a
`proceeding or patent outside of this case that is relevant that
`you would be discussing.
`MR. GRAY: Yeah, I think that's right, your Honor, at
`least with respect to the patents that aren't asserted in this
`case as we set out in the briefing. The prior case, that
`Delaware case on the '962 is the only one that at least comes
`to mind. Obviously things can happen during trial. The
`parties have also agreed that their experts are limited to in
`their direct testimony as to what's in their expert report. So
`presuming that some surprise doesn't happen, that's the only
`thing -- the only patent not asserted in this case that has a
`prior proceeding that we want to reference.
`MR. HANNAH: Well, your Honor, in terms of the '962 in
`the previous litigation and the holdings there, we don't think
`
`
`
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`that they're relevant, and they're going to be highly
`prejudicial and confuse the jury in terms of doing the
`patent-to-patent comparison of what someone -- another jury
`found for a different patent in the case and then trying to
`present that here. I think that the evidence needs to be based
`on the prior art that's in this case. And they can go up there
`and they have their expert testify about the prior art that's
`in this case and prove the elements that are in there and not
`try to shortcut it using another litigation in which it's a
`different patent altogether, two different patents altogether.
`THE COURT: I appreciate that, and I think that this
`is going to come around again when we talk about IPRs on the
`patents in the case as well. It may be to your benefit by
`saying they can use the '962 in their case because you want to
`use the IPR histories of these patents in this case as well and
`those findings. So limit it to the specific findings of the
`'962 and, you know, a show by your expert that these claims
`are -- obviously, explain what a continuation is and that these
`are continuations and these claims are not novel beyond what
`was already found to be obvious and not patentable.
`So the motion to exclude is granted in part and denied
`in part. Obviously I don't want to hear about pending claims
`and I don't want to hear about irrelevant claims. I will make
`the small exception for history of the '962.
`Docket 749, motion number 4, excluding unsupported
`
`
`
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`testimony on noninfringing alternatives. There's a real
`dispute here in the papers as to whether or not the experts
`relied on Mr -- I have his name here somewhere -- Mr. Kosinar
`in what it would take to do a noninfringing alternative.
`Finjan has argued that the opinions are without foundation
`because when Mr. Kosinar was deposed, he said that he was not
`aware of any noninfringing alternatives that had been
`implemented. But Finjan's response to that is they didn't ask
`him whether they could have been, only whether they had been,
`and factually they had not been, and so the question kind of
`came up short.
`I'm going to allow them to -- we have dealt with this
`already previously in motion practice. The Court is, again,
`going to allow this to go forward. I think you can thoroughly
`cross-examine them on whether or not these are just
`hypotheticals generated for litigation or whether there was
`actually work done into noninfringing alternatives, but I'm not
`going to preclude them from offering those opinions.
`Number 5, precluding ESET's experts from applying
`their own claim constructions. I'm precluding any expert in
`this case from applying a claim construction that was not the
`Court's claim construction. That is an issue I'm trusting you
`all understand and are not going to have your experts go down
`the road on.
`However, what seems to be to have completely
`
`
`
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`continuously arisen here since the claim construction hearing
`is that there were terms that the experts have construed, if
`you will, under the plain-and-ordinary-meaning type analysis
`that didn't come to the Court for claim construction where you
`guys disagree. Your experts say no, plain and ordinary meaning
`to someone of ordinary skill in the art at the time would have
`been this, and the defense experts said no, it would have been
`this. All I can say with regard to that is when the testimony
`comes in, if there's a disagreement as to the meaning of a
`claim, we're going to be doing them on the fly before the case
`goes to the jury because I'm not going to have another claim
`construction between now and trial. And as long as the jury
`gets my constructions before they go to deliberate, even if it
`happens after everyone has testified...
`We'll take them as it comes up, but it does seem to me
`this argument is a little bit in a space where it's not
`necessarily that I construed the claim and someone is just
`saying it doesn't mean that. It's interpretation surrounding
`those claim interpretations. And so I'm going to take them as
`they come. But just be careful because you don't want your
`expert pinning his whole thing on a construction that I might
`then instruct the jury to say that's not what that means, so
`you can just disregard everything that he told you.
`Number 6, preclude ESET's experts from relying on
`redacted reports. Yes, I would agree, except their response in
`
`
`
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`essence -- and I want to hear a little more argument on this --
`is that the report that Mr. Spafford was relying on was not the
`redacted sections, that he got these reports from a third party
`that provided them unredacted and that the testimony that he
`used from the Delaware case was a matter of public record and
`was not done under seal, and so his opinions relying on
`previous reports that were prepared and testimony that was
`given is, in fact, not sealed and secret, and that you have had
`it. Did I get that wrong?
`MR. KATSTENS: Your Honor, I think it goes a little
`bit more indefinite. They tried to paint it as only oh, we're
`just going to rely on the material that you had and that was
`produced in this case, but ultimately, what they're relying on
`are the opinions of -- in that case, where the source code
`those opinions were concluded on was not produced in this case.
`So we didn't have the source code that they ultimately used to
`reach their conclusions; and, in addition, the products that
`they said they tested back nine years ago, those were never
`made available for testing in this case.
`So what he's -- Dr. Spafford is effectively saying is
`I used my report, the nonredacted parts in the testimony at
`trial, to refresh my recollection on how these products work,
`and that's how he's bootstrapping in and is going to talk about
`all this -- and bring in all this testimony. When in this
`case, the only thing that was produced were some summaries
`
`
`
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`of -- you know, some summaries that even the source code, much
`of the testing was -- the structure of the testing was actually
`redacted in the reports. And so we're afraid they're going to
`go in and talk about this testing, oh, yeah I tested, I showed
`all of this work when all we had access to was these public
`documentation, the different manuals that they had that he
`actually did include in his report and which we have no issue
`with him discussing.
`THE COURT: All right. Who's up?
`MR. GRAY: I think you described it correctly, your
`Honor. Our expert does not intend to rely on or testify about
`anything that hasn't been made available in this case. The
`report at issue from the prior case, yes, was redacted. The
`only thing that was redacted from that report was a, I believe,
`Oracle source code. Everything else was made available and
`made available to opposing counsel, and Dr. Spafford doesn't
`rely on any of that particular source code in his reports. All
`he relies on for the reports from the prior case and his
`experience from the prior case are facts and evidence that were
`made a part of fact discovery in this case. And so he's not
`going to be going outside of his expert report and testifying
`about things that Finjan never had access to or couldn't have
`gotten access to during fact discovery if they needed it. And
`that pretty much is it. I think it's a fairly straightforward
`issue.
`
`
`
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`THE COURT: I'm going to deny this request subject to
`it being raised specifically at trial. But it seemed to me
`that some of the heart of it was Dr. Spafford was using reports
`he wrote in a Delaware case and facts that led to those reports
`as part of the basis of his opinion that he did that seven,
`nine years ago. Certainly in terms of examining him and his
`ability to remember those facts and the credibility on which he
`can base his opinion on things that happened almost a decade
`ago is interesting cross-examination, but I'm not going to
`exclude his report. It doesn't look like there's a black box
`here, but rather that it's, you know... So I'm not going to
`exclude him. I don't think he is relying on redacted reports.
`He's relying on recollections; and, yes, that may be a little
`challenging to cross-examine him, but it also is a challenging
`basis for credibility. So the Court is denying motion in
`limine number 6.
`Number 7, the Microsoft license was the subject of a
`previous motion. The Court made a determination that they had
`not waived the license defense. I know there were a lot of
`issues here about timing. However, I'm not -- I've previously
`not precluded the Microsoft license defense. All your
`objections are preserved for an appeal, but I'm going to let
`them discuss the Microsoft license defense. So that motion is
`denied.
`
`And the final motion from Finjan, to preclude
`
`
`
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`Dr. Spafford from comparing the NOD ICE to the '844 patent.
`This is a mixed result here that as I understand this,
`Dr. Spafford may want to discuss the NOD ICE product in
`reference to the state of the art in response to a position
`taken by Finjan that they created something incredibly new and
`novel and had never been done before. I'm okay with that.
`However, based on the representations made by
`Finjan -- and you'll have to show me otherwise -- this was
`never disclosed as anticipatory reference or a combination for
`obviousness. So it can't be used to claim that the '844 patent
`is invalid only to give context to the state of the art at the
`time. The fact that some of this was known wouldn't
`necessarily make the '844 not patentable. It just might not
`be, you know, a pioneer patent, as you were.
`So for the limited purpose of using it in the context
`of his background as to the state of the art, he can reference
`this particular product with regard to the '844, but he can't
`use it in any way as an affirmative defense of invalidity. Is
`that clear?
`MR. PENNER: That's just the '844? Because he does
`use it for the '086 of as well.
`THE COURT: For any of them not identified as prior
`
`art.
`
`MR. PENNER: That's what we want to make clear as an
`obviousness reference for that particular patent. The '844, we
`
`
`
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`agree with you, your Honor. We just want to make sure he can
`still present for the '086 patent.
`THE COURT: The motion was specific to the '844. So
`again, yes, if it's coming in on another patent, then, yes, but
`his reference to it is limited to the '844 only as background.
`Moving then to ESET's motions. These are all at
`docket 745 with the oppositions filed at 741. Motion in limine
`number 1 was to preclude evidence of the IPR proceedings. My
`initial reaction on this was to -- well, it's still to say no.
`The IPR proceedings of the patents in this case that have
`reached conclusion that address invalidity challenges to art
`that is being raised -- you're not precluded if they're not
`your IPRs. You can certainly assert the same art. But the
`record that has been before the Patent Office and considered is
`part of the prosecution history of these patents and it is
`entirely appropriate to allow them to make reference to the
`fact that this art and these combinations or otherwise have
`been addressed.
`Where you guys lost me and almost got me a little
`annoyed is your response saying one of their very own patents
`here, or IPRs, has come to conclusion. That's for the '305.
`It's not in this case right now. Exhibit 1 to 761-3, which was
`the reference you made saying ESET, you know, filed their own
`IPR and of course we shall use that against them. But it's for
`the '305, and the '305 -- I haven't lifted the stay on the
`
`
`
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`'305. It's not in this case right now. There is no reason
`this should have been used as an example like somehow they're
`whining. So help me out with that.
`MR. ANDRE: Your Honor, that was an error. I think it
`was meant to be the '086 petition that was denied institution.
`That was a mistake. We apologize for that.
`THE COURT: And the denial of an institution is not
`going to come to the jury, because institutions get denied for
`reasons not on the merits necessarily. And so that's out.
`But as to the other patents in the case, so if there's
`anything on the '844, the '780, the '086, the '621, or the '755
`that was an IPR whoever it was brought by that went to
`conclusion and the patents were still found to be valid and
`that art that was considered in those is art that's the same
`art being considered here, you can address it. But it's got to
`be the same art. We're not just going to keep bolstering these
`patents by IPRs by other companies in other litigation. It has
`to be a correlation. This particular art was considered by the
`Patent Office in the context of this IPR and was found not to
`be invalidated. Is that clear?
`MR. PENNER: Yes. But it may make it easier to just
`state that there is not a single IPR on any of the five patents
`here that has reached a final written decision by the PTAB.
`They've all been either withdrawn because of a settlement
`agreement or they were not instituted. We checked yesterday.
`
`
`
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`There is not a single one that has reached a final written
`conclusion, so that should hopefully make this an easy
`decision.
`THE COURT: That helps.
`MR. ANDRE: Your Honor, I have to conclude with my
`colleague here that they have been petitioned multiple times.
`They've never been instituted. We've stayed off institution.
`I would love to get into the evidence, but I understand why we
`can't.
`
`THE COURT: As to 1, I'm considering it moot. But if
`someone starts to go down that road, obviously people can ask
`for a sidebar and object. But it sounds like there really
`shouldn't be any discussion of IPRs in this case. Perfect.
`Number 2, precluding testimony about Finjan's other
`entities. That's denied. Finjan can certainly have their
`in-house person get up and talk about the history of the
`company and the evolution of the company. But limit it to
`that. I understand that this company has evolved over time.
`It had products and has gone into different directions. You
`can give that background. It lets the jury understand who you
`are and why you're here doing what you're doing. I'm okay with
`that.
`
`I do not want to get into the commercial success of
`any of those other companies or that they're selling or they're
`competitors with the defendant because that's not relevant.
`
`
`
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`Got it?
`
`MR. PISANO: Your Honor, to clarify one thing. So
`they're going on talk about Finjan Mobile. That didn't exist
`and it's not a part of the plaintiff Finjan, Inc. They can
`talk about Finjan, Inc. until the cows come home. We just
`don't think it's appropriate to talk about other companies that
`are under the Finjan holdings umbrella that are not actually
`part of Finjan, Inc., which is the plaintiff.
`THE COURT: Again, you're on the clock. If you think
`the best use of your time is to talk about companies that have
`nothing to do with this litigation but are somehow affiliated
`with Finjan, I think that's a mistake in litigation strategy,
`but I'm not going to tell you what about your company history
`you can talk about or not talk about. All of this is public
`record stuff. I'm not seeing the big issue here.
`MR. PISANO: Your Honor, the only other problem is we
`never had any discovery on Finjan Mobile or any other entities.
`We never took discovery because they --
`THE COURT: They're just going to say they exist,
`
`right?
`
`MR. PISANO: No. He's going to say that's their
`products. They're going to talk about the Finjan Mobile
`products.
`THE COURT: No, we're not going to talk about the
`Finjan Mobile products.
`
`
`
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`MR. ANDRE: And we don't to want talk about Finjan
`Mobile products. The only thing we want to talk about if they
`cross-examine a witness and say you don't sell any products,
`you're just a patent suing company? No, we have products in
`market. Finjan has products in the market. Anyway, I don't
`think it will be an issue.
`THE COURT: I used to do work for HP, and at one
`point, they took all their patents and they put them in a
`holding company. That would have made them a nonpracticing
`entity for the HP holding company. But clearly HP made lots of
`products. You know, this structure is not something that
`jurors are going to be all that familiar with, but I do think
`yes, the jury should not be left with the impression that
`you're three lawyers who brought a bunch of patents that are
`now suing to put money in your pockets because you're a company
`and you can give your company history.
`MR. ANDRE: Thank you, your Honor.
`THE COURT: Number 3, precluding reference to tests of
`products that postdate the expiration of the patents. I'm
`going to reserve on this. But there's got to be foundation
`that these products that you're using, that you tested, that
`the elements of them existed at the time the patents were --
`not only before they expired but throughout the course of the
`time that is relevant for damages, so all the way back to your
`initial damage period here, which is January '15, right?
`
`
`
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`MR. HANNAH: For two of the patents, yes.
`THE COURT: So certainly for the patents where notice
`goes back to January of 2015, whatever you're testing that
`didn't come on the market until post-expiration, there's got to
`be some foundation that, in fact -- and I need to hear what it
`is. So I'm going to reserve on that one.
`Okay. Precluding Finjan's experts from referencing
`each other. There's a lot of experts in this case. You've
`divided them all up into very specific chores. Dr. Bims is
`going to give the historical tutorial. Dr. Cole has the '944.
`Mitzenmacher has '780 and '806. Medvidovic has got the '621
`and '755. Arst has the damages. Jaeger has the validity
`rebuttal on the '844 and the '780 and the '806. And Goodrich
`has the validity rebuttal on the '621 and the '755. And then
`Orso has secondary considerations.
`With the exception of Mr. Arst, who obviously has to
`rely on other people's findings of validity and infringement
`and perhaps in references back to Mr. Bims' tutorial, I expect
`every one of these experts to stay in their lane. They are not
`to be talking about, Well, my opinion also supports Dr. Cole's
`opinion and Dr. Cole's opinion, because, yes, truly, how will
`the defendants cross-examine that if Dr. Cole has come and gone
`and then Dr. Mitzenmacher is going to start bolstering those
`opinions? So when they take the stand, I expect every one of
`these experts to stay in their lane and not be talking about
`
`