Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 1 of 26 PageID #: 8693
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 2 of 26 PageID #: 8694
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`Jarrad M. Gunther
`Joseph A. Powers
`DUANE MORRIS LLP
`30 South 17th St.
`Philadelphia, PA 19103-4196
`Tel.: (215) 979-1837
`Fax: (215) 689-4921
`jmgunther@duanemorris.com
`japowers@duanemorris.com
`
`Jordana Garellek
`DUANE MORRIS LLP
`1540 Broadway
`New York, NY 10036-4086
`Tel.: (212) 471-1829
`Fax: (212) 214-0889
`jgarellek@duanemorris.com
`
`*admitted pro hac vice
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`
`
`2
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 3 of 26 PageID #: 8695
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`TABLE OF CONTENTS
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`Page
`
`I.
`
`Mr. Parr’s Opinions Should be Excluded ............................................................................1 
`
`A.
`
`Mr. Parr’s Per-Patent Apportionment Analysis is Methodologically
`Flawed and Will Mislead—Not Help—the Jury Calculate a Reasonable
`Royalty .................................................................................................................... 1 
`
`1.
`
`Mr. Parr’s Apportionment Analysis is Methodologically Flawed .............. 1 
`
`a.
`
`b.
`
`Finjan Ignores the Governing Apportionment Case Law ................1 
`
`Mr. Parr’s Per-Patent Opinions Are Misleading and
`Unhelpful .........................................................................................3 
`
`B.
`
`C.
`
`D.
`
`2.
`
`Mr. Parr’s Equal Weighting of Features is Unsupported ............................ 5 
`
`Mr. Parr’s Reliance on Finjan’s
`Renders His Analysis Flawed ................................................................................. 6 
`
`Mr. Parr’s Projections Into 2025 Should Be Struck ............................................... 8 
`
`Mr. Parr’s Reliance on the
` Jury Verdicts and Settlement Agreements Renders
`His Analysis Flawed ............................................................................................. 10 
`
`II.
`
`Dr. Mitzenmacher’s Infringement Opinions for Nexpose and AppSpider for the
`’154 and ’289 Patents Should be Excluded .......................................................................12 
`
`A.
`
`B.
`
`’154 Patent ............................................................................................................ 12 
`
`’289 Patent ............................................................................................................ 16 
`
`III.
`
`Finjan’s Experts’ Opinions Mischaracterizing the Background of the Patents-in-
`Suit Should be Excluded ....................................................................................................18 
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`i
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 4 of 26 PageID #: 8696
`
`Federal Cases
`
`TABLE OF AUTHORITIES
`
`Acceleration Bay LLC v. Activision Blizzard, Inc., 324 F. Supp. 3d 470
`(D. Del. 2018) ......................................................................................................................8, 10
`
`Allergen Sales, LLC v. UCB, Inc., 2016 WL 8222619 (E.D. Tex. Nov. 7, 2016) ...........................9
`
`Deere & Co. v. Int’l Harvester Co., 710 F.2d 1551 (Fed. Cir. 1983) ..............................................8
`
`Ericsson Inc. v. TCL Commns. Tech. Holdings, Ltd., 2018 WL 3089701
`(E.D. Tex. March 7, 2018) .........................................................................................................8
`
`Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299 (Fed. Cir. 2018) .............................. 1, 6, 10-11
`
`Finjan, Inc. v. Sophos, Inc., 244 F. Supp. 3d 1016 (N.D. Cal. 2017) ..............................1, 5, 10, 12
`
`Finjan, Inc. v. Sophos, Inc., No 14-cv-01197-WHO, 2016 WL 4702651
`(N.D. Cal. Sept. 9, 2016) ....................................................................................................... 2-3
`
`Finjan, Inc. v. Sophos, Inc., No. 14-cv-01197-WHO, 2016 WL 4268659
`(N.D. Cal. Aug. 15, 2016) ......................................................................................................3, 9
`
`Good Tech Corp. v. Mobileiron, Inc., 5:12-cv-05826-PSG, 2015 WL 4090431
`(N.D. Cal. July 5, 2015) .............................................................................................................5
`
`LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51 (Fed. Cir. 2012) ............................12
`
`Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) ............................................8
`
`M2M Solutions LLC v. Enfora, Inc., 167 F. Supp. 3d 665 (D. Del. 2016) ....................................10
`
`Magnetar Techs. Corp. v. Six Flags Theme Parks Inc., No. 07-127-LPS-MPT,
`2014 U.S. Dist. LEXIS 15674 (D. Del. Feb. 7, 2014) ....................................................... 13-14
`
`MyMail, Ltd. v. ooVoo, LLC, 934 F.3d 1373 (Fed. Cir. 2019) ......................................................19
`
`Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018) ..............................................2
`
`Stragent, LLC v. Intel Corp., No. 6:11-cv-421, 2014 WL 1389304
`(E.D. Tex. Mar. 6, 2014) ......................................................................................................6, 11
`
`Summit 6, LLC v. Samsung Elecs. Co., Ltd., 802 F.3d 1283 (Fed. Cir. 2015) ................................9
`
`Symbol Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569 (Fed. Cir. 1991)..................................2
`
`Telcordia Techs., Inc. v. Cisco Sys, Inc., 612 F.3d 1365 (Fed. Cir. 2010) ......................................9
`
`ii
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 5 of 26 PageID #: 8697
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`Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) ............................................6
`
`Whitserve, LLC v. Computer, 694 F.3d 10 (Fed. Cir. 2012) ............................................................6
`
`Wi-LAN Inc. v. LG Elecs., Inc., 2019 WL 5681622 (S.D. Cal. Nov. 1, 2019) ................................8
`
`Zimmer Surgical, Inc. v. Stryker Corp., 365 F. Supp. 3d 466 (D. Del. 2019) ...............................10
`
`Federal Statutes
`
`35 U.S.C. § 156 ................................................................................................................................2
`
`Rules
`
`Fed. R. Evid. 401 .............................................................................................................................9
`
`Fed. R. Evid. 402 .............................................................................................................................9
`
`Fed. R. Evid. 403 .............................................................................................................................8
`
`Fed. R. Evid. 702(a) .........................................................................................................................9
`
`iii
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 6 of 26 PageID #: 8698
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`I.
`
`Mr. Parr’s Opinions Should be Excluded
`A. Mr. Parr’s Per-Patent Apportionment Analysis is Methodologically Flawed
`and Will Mislead—Not Help—the Jury Calculate a Reasonable Royalty
`
`Mr. Parr’s reasonable royalty analysis is overlapping between patents and functionality,
`
`which will mislead the jury into simply summing up his per-patent figures. Finjan recognizes that
`
`Mr. Parr’s opinions closely resemble those excluded in Sophos but argues that Mr. Parr’s differ
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`“in important ways.” D.I. 223, at 12. Specifically, Finjan argues Mr. Parr avoids the double-
`
`counting that plagued Dr. Layne-Farrar’s analysis because
`
`
`
`” Id. at 13. While Mr. Parr pays lip service to the possibility of double counting, his
`
`analysis maintains the fundamental methodological failure to engage in the necessary further
`
`apportionment, which cause his cumulative and overlapping royalties in the first place.
`
`1.
`
`Mr. Parr’s Apportionment Analysis is Methodologically Flawed
`a.
`
`Finjan Ignores the Governing Apportionment Case Law
`
`Finjan ignores the Federal Circuit’s Blue Coat opinion, which is instructive here. See D.I.
`
`207, at 13 (citing Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1310-11 (Fed. Cir. 2018)).
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`There, the infringing component was a subcomponent of a larger component called the “dynamic
`
`real-time rating engine” (DRTR), which was itself a component of one of the accused products.
`
`Finjan used DRTR as the royalty base, but while it performed non-infringing functions, “Finjan
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`did not perform any further apportionment.” Id.at 1310. The Federal Circuit held that because
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`DRTR “contains non-infringing features, additional apportionment is required.” Id. at 1311. The
`
`district court’s opinions in Sophos are a direct application of this requirement of further
`
`apportionment, which Finjan again ignores here. Sophos II, 2016 WL 4702651, *2 (N.D. Cal. Sept.
`
`8, 2016) (“Layne-Farrar could have attempted to further apportion the modules to each patent. …
`
`But her decision not to apportion the modules to each patent does not make it reasonable to
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`1
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`

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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 7 of 26 PageID #: 8699
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`attribute the full value of module 1 to all five patents.”).
`
`Finjan does not argue that Mr. Parr engaged in the necessary further apportionment to
`
`ensure that he is not capturing the same value across multiple patents. Instead, Finjan cites two
`
`inapposite cases: Novartis AG v. Ezra Ventures LLC, 909 F.3d 1367 (Fed. Cir. 2018) and Symbol
`
`Technologies, Inc. v. Opticon, Inc., 935 F.2d 1569, 1581 (Fed. Cir. 1991). D.I. 223, at 12-13.
`
`Neither case deals with the issue before the Court: whether Mr. Parr conducted a proper
`
`apportionment analysis. Novartis was an ANDA case that “concern[ed] the interplay between a
`
`patent term extension (PTE) granted pursuant to 35 U.S. § 156 and the obviousness-type double
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`patenting doctrine.” 909 F.3d at 1369. In its entirety, the sentence excerpted by Finjan states that
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`“[a] patent owner often owns multiple patents that cover the same product that has been subject
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`to regulatory review, but only one patent’s term can be extended,” citing 35 U.S.C. § 156(c)(4).
`
`Id. (emphasis added). Regulatory approval and patent extensions under Section 156(c)(4) are not
`
`at issue here. Opticon also does not address apportionment, but whether the defendant had
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`sufficiently proved its affirmative defense of double patenting. 935 F.2d at 1579-81.
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`Finjan’s other efforts to excuse Mr. Parr’s failure to conduct the necessary apportionment
`
`fail. Addressing the specific example Rapid7 cited, Finjan admits that each of the four patents
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`allegedly infringed by InsightVM “cover the same key features … in different ways.” D.I. 223 at
`
`13. Nonetheless, Finjan argues that “does not mean Mr. Parr’s analysis is unreliable.” Id. But that
`
`is exactly the point: since each of these patents implicate the
`
` feature
`
`in “different ways,” Mr. Parr was required to engage in further apportionment to determine what
`
`value each patent provides. For example, as suggested in Sophos II, if properly supported, Mr. Parr
`
`might have determined that each patent was worth 1/4 of the value this feature. Sophos II, 2016
`
`WL 4702651, at *2. But Mr. Parr did not do this. Instead, Mr. Parr
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`2
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 8 of 26 PageID #: 8700
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`. This is not possible “as a matter of law and logic.”
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`Sophos I, 2016 WL 4268659, *4; Sophos II, 2016 WL 4702651, *2 (“if each patent is valid, then
`
`each cannot contribute the full value of a single module”). “[T]herefore, this apportionment
`
`calculation is not a reliable methodology for calculating a reasonable royalty.” Sophos I, 2016 WL
`
`4268659, *4. Nor could Mr. Parr defend this in his deposition. When asked whether each patent
`
`“covered a unique aspect of those three features,” Mr. Parr declined to answer, stating that it was
`
`.” Ex. 10 (Parr Dep. 213:23-214:9).2
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`As discussed below, the fact that Mr. Parr pays lip service to the possibility of, and warns
`
`against, double-counting across patents, does not save his analysis. That there could be “overlap”
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`or the possibility of double-counting in the first place proves the flaw in his methodology. Indeed,
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`if Mr. Parr had done a proper apportionment analysis that further apportioned each feature to each
`
`patent, then there would be no possibility of double-counting or overlap. Since he did not do so,
`
`the entirety of his reasonable royalty analysis is unreliable and should be excluded.
`
`b.
`
`Mr. Parr’s Per-Patent Opinions Are Misleading and Unhelpful
`
`The “overlap” in Mr. Parr’s per-patent opinions is the direct result of his failure to
`
`undertake the necessary further apportionment, described above. It is also why he failed to provide
`
`1 Rapid7 refers here to the specific example that it identified in its opening brief and which Finjan
`responded to. However, this issue permeates the entirety of Mr. Parr’s apportionment analysis and,
`accordingly, the entirety of his methodology is flawed and should be excluded.
`
`2 Unless otherwise noted by docket number, exhibits are attached to the Declaration of John R.
`Gibson, submitted contemporaneously herewith.
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`3
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`Case 1:18—cv-01519—MN Document 238 Filed 11/20/20 Page 9 of 26 PageID #: 8701
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`aeasonaem royalty figure‘—
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`-” patents are found to be valid and infringed. D.I. 208 Ex. 2 (Parr Dep. 3922-4). Had Mr.
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`Pair engaged in the necessary further apportionment, there would be no overlap, no possibility of
`
`double counting, and no fear of misleading the jury into simply summing his figures. While Finjan
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`is c01rect that Rapid7’s damages expert, Dr. Becker, also conducted a per-patent analysis, his per-
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`patent royalties are fully cmnulative and there is no potential for double—comiting.
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`Finjan nevertheless argues that Mr. Pan’s testimony, “grormded in the analysis in his expert
`
`report, will allow the jury to award damages for Rapid7’s infringement for the entire damages
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`peliod without double-c01mting.” D.I. 223, at 8. Finjan, however, does not cite to any part of Mr.
`
`Parr’s report where such “testimony" would be “grounded.” Such opinions do not exist. Instead,
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`Mr. Parr recognizes that his per-patent opinions overlap in exactly two paragraphs. In neither does
`
`he explain how a jmy would go about eliminating the overlap necessary to avoid double-counting:
`
`
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`D1. 208 Ex. 1 (Parr Rep.). Mr. Palr’s schedules do not provide the missing information. See D1.
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`224 Ex. A (Schedules 1-7). At his deposition, Mr. Parr simply proffered that the juiy_
`
`— D.I. 208 Ex. 2 (Pair Dep. at 38: 16—41 : 1). Mr. Parr did not
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`explain how the jury would go about ‘—” or otheiwise explain the steps
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`that they would need to employ to—” Id. at 40:14-15. Mr. Pair
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 10 of 26 PageID #: 8702
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`further admitted that he “
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`” figuring out the damages if all patents are
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`found to be valid and infringed by all accused products. Id. at 40:20-41:1.
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`2.
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`Mr. Parr’s Equal Weighting of Features is Unsupported
`
`Finjan’s justification for Mr. Parr’s application of an equal weighting to the features
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`identified by its technical experts is circular. Finjan’s technical experts offer a tautology that the
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`features Rapid7 identifies in marketing materials should all be considered to have equal weight
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`because without one of the advertised features the product “
`
`
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`.” See, e.g., D.I. 224 Ex. D (Mitzenmacher Rep. ¶ 177). While Dr. Mitzenmacher
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`(and Dr. Cole) hypothesizes that the way Rapid7 markets the products suggests that “
`
`
`
`” (id.
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`(emphasis added)), neither performed any “investigation into whether any of the criteria is more
`
`important than others, or how strongly each criterion is tied to the patents.” Good Tech Corp. v.
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`Mobileiron, Inc., 5:12-cv-05826-PSG, 2015 WL 4090431, *7 (N.D. Cal. July 5, 2015). Finjan’s
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`reference to the Sophos Court’s holding that similar “equal weighting” opinions from Dr. Layne-
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`Farrar were well-supported, does not help it here, either. A comparison of the opinions offered by
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`Finjan’s damages expert and the support provided by its technical experts in the Sophos case, as
`
`compared to the opinions offered here, shows the lack of support in this case. Compare, e.g., D.I.
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`224 Ex. D at ¶¶ 177 (and similar opinions at 184, 188, 196, 200, 208, 213, 219, 227), with Ex. 11,
`
`at 1-4 (technical experts relied on, e.g., documents that describe specific components and
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`capabilities of the accused products as separate, but equally valuable, building blocks of the
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`functionality of Sophos’ products, and the testimony from over half a dozen Sophos employees,
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`including Sophos’ VP of Sales.). Sophos’ expert also applied an equal valuation of features. Id.
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`Mr. Parr’s opinions as to equal weighting from an economic perspective fair no better, as
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`they are based only on the fact that Rapid7 markets its products by identifying certain use cases
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`5
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 11 of 26 PageID #: 8703
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`and features and without citation to any documents or other support. D.I. 208 Ex. 1 (Parr Rep. ¶
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`300). Mr. Parr did not investigate to determine whether the way Rapid7 markets its products is
`
`consistent with the economic value placed on these features by any of Rapid7’s customers. Thus,
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`his arbitrary assignment of equal economic value lacks “the requisite indicia of expert reliability.”
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`Stragent, LLC v. Intel Corp., No. 6:11-cv-421, 2014 WL 1389304, *4 (E.D. Tex. Mar. 6, 2014).
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`Finjan also points to the testimony of Ms. Mar-Spinola as support for this equal weighting.
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`This testimony is not cited by Mr. Parr to justify his equal weighting, and is thus irrelevant to this
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`Daubert motion. Mr. Parr likely left this out because her testimony has nothing to do with the
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`specific circumstances of Rapid7. Indeed, Finjan’s proffering of a one-size-fits-all rule for all
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`products of all potential licensees—regardless of the particular facts—is exactly the sort of rule of
`
`thumb that is arbitrary, general, and not tied to the facts of the case, in contravention of governing
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`Federal Circuit case law. See, e.g., Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir.
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`2011) (rejecting use of the 25% rule of thumb).
`
`B. Mr. Parr’s Reliance on Finjan’s
`Renders His Analysis Flawed
`
`Starting Point Rates
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`In Blue Coat, the Federal Circuit plainly held that testimony that “an 8-16% royalty rate
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`would be the current starting point in licensing negotiations says little about what the parties would
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`have proposed or agreed to in a hypothetical arm’s length negotiation in 2008.” Blue Coat, 879
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`F.3d at 1312. Finjan argues this case is “inapposite,” but it is the situation here, too, that Finjan
`
`has no evidence that any of its
`
` reflect the application of these rates to determine
`
`the final lump sum. At best, it has evidence that these are the rates at which it opens negotiations,
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`but what it opens negotiations is insufficient and irrelevant. See Whitserve, LLC v. Computer
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`packages, Inc., 694 F.3d 10, 30 (Fed. Cir. 2012) (noting the limited “evidentiary value” of opening
`
`offers because “patentees could artificially inflate the royalty rate by making outrageous offers”).
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`
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`6
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 12 of 26 PageID #: 8704
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`None of the evidence Finjan cites demonstrates that any of the
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` licenses were the
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`result of application of
`
` rates per patent—as Mr. Parr opines here—as opposed
`
`to
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`example, each of the references to
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`licenses have Finjan agreeing to
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`explains, “
`
`. For
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`
`
`
`
`. As Dr. Becker
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`
`
`.” See Ex. 12 (Becker Rep. ¶ 309). Mr.
`
`Parr even agreed with this analysis, thus it is not clear how or why Finjan would suggest otherwise
`
`here. See Ex. 10 (Parr Dep. at 97:18-104:20 (discussing a similar provision in the
`
`)).
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`Finjan’s reference to Mr. Parr’s analysis of the
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` license similarly proves Rapid7’s
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`point. In that discussion, Mr. Parr admits that Finjan applied a “
`
`
`
`
`
`.” D.I. 224 Ex. A (Parr Rep. ¶
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`212). In other words, while the starting offer may have been based on Finjan’s
`
`
`
`rates, the ultimate agreement reflects application of much lower effective rates. Indeed, Finjan has
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`no response to Mr. Garland—Finjan’s licensing executive and corporate witness on licensing
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`negotiations—whose testimony confirms exactly what Mr. Parr opines to here: whatever rates
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`Finjan may begin its negotiations with, it consistently and repeatedly
`
`
`
`
`
`
`
`. See D.I. 207, at 9 (citing Garland testimony).
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`To be sure, Finjan has beaten the drum of its alleged use of the
`
` for its
`
`entire patent portfolio in various depositions. But these self-serving statements about how Finjan
`
`starts its negotiations says nothing about the effective rate to which it actually agrees. Indeed,
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`7
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 13 of 26 PageID #: 8705
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`Finjan has no answer to Rapid7’s citation to Wi-LAN Inc. v. LG Elecs., Inc., 2019 WL 5681622,
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`*7 (S.D. Cal. Nov. 1, 2019), which is directly on point. In that case, while recognizing that plaintiff
`
`had presented evidence that the rate sheet had been used in actual license negotiations, there was
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`“no evidence in the record showing that anyone has ever agreed to one of the specific rates offered
`
`in Wi-LAN’s rate sheets.” Id. Thus, in the context of a Daubert motion, the court excluded the
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`opening offers, determining that “the probative value of the rate sheet as to the reasonable royalty
`
`analysis in this case is severely diminished and insufficient to substantially outweigh the risk of
`
`unfair prejudice of skewing the damages horizon.” Id. (citing, inter alia, Fed. R. Evid. 403 and
`
`Deere & Co. v. Int’l Harvester Co., 710 F.2d 1551, 1557 (Fed. Cir. 1983) (upholding decision
`
`finding “no significant persuasive value” in an offer to license under the circumstances)).
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`C. Mr. Parr’s Projections Into 2025 Should Be Struck
`
`Contrary to Finjan’s assertion, Rapid7 agrees that the lump sums that the respective
`
`damages experts have calculated are intended to compensate Finjan for the alleged infringement
`
`through the life of the patents. Based on this assumption, Dr. Becker’s reasonable royalty opinions
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`are based on a fully paid-up lump sum royalty for the life of the Patents-in-Suit. Dr. Becker’s
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`analysis, however, does not suffer from the same fatal flaws as Mr. Parr’s, for two reasons.
`
`First, the parties agree that a lump sum can be based on projections of future sales, but Mr.
`
`Parr neglects to account for the fact that those projections must be realistic and supported by proof.
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`Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1327 (Fed. Cir. 2009) (“Parties agreeing to a
`
`lump-sum royalty agreement may, during the license negotiation, consider the expected or
`
`estimated usage (or, for devices, production) of a given invention, assuming proof is presented to
`
`support the expectation … .”) (emphasis added). Indeed, in Activision, 324 F. Supp. 3d at 491, in
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`coming to his opinions, Judge Andrews quoted Judge Payne’s decision in Ericsson Inc. v. TCL
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`Commns. Tech. Holdings, Ltd., 2018 WL 3089701, at *7 (E.D. Tex. March 7, 2018), wherein
`
`
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`8
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 14 of 26 PageID #: 8706
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`Judge Payne noted that a lump sum must be based on “realistic projections of future sales.” Here,
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`Mr. Parr does not provide any evidence to support his ipse dixit conclusion that Rapid7’s revenues
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`over five years from now (i.e., December 2025) will be the same as its revenues from Q3. This is
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`the exact issue that Judge Orrick addressed in Sophos I, and which Finjan again ignores:
`
`Layne-Farrar's estimate of steady sales through the end of 2017, less than a year
`and a half, based on current steady growth, is reasonable and sufficiently supported
`by evidence. The fifth patent, '154, expires in December 2025 and the sixth
`patent, '580 expires in 2032. Layne-Farrar's estimate of steady sales through the end
`of 2025 and 2032, based only on current growth, is too speculative to assist the jury
`in assessing a reasonable future damage amount. Daubert, 509 U.S. at 597 (an
`expert's testimony must have a “reliable foundation”).
`
`Sophos I, 2016 WL 4268659, at *5.
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`Second, Mr. Parr has not provided any support for his implicit contention that at the
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`hypothetical negotiation in May 2015 the parties would have contemplated Rapid7’s revenues
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`through 2025, or why Rapid7 would agree to such a structure. Stated differently, while nominally
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`structured as a lump sum, Mr. Parr’s calculations are actually more representative of a running
`
`royalty insofar as they apply his royalty rates of
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`to both known (i.e., past) sales, and
`
`future sales that have not yet occurred. In that case, it is clear that Mr. Parr’s attempt to include
`
`sales out to 2025 is improper. Allergen Sales, LLC v. UCB, Inc., 2016 WL 8222619, *3 (E.D. Tex.
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`Nov. 7, 2016) (“Any opinion on a future royalty that may accrue from infringement that has not
`
`yet occurred (as opposed to a lump-sum royalty) is properly excludable under Rule 702(a) as being
`
`contrary to law or as not helpful to the trier of fact to determine “a fact in issue.” Or such an opinion
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`is simply excludable under Rules 401 and 402 as irrelevant.”). Neither of the Federal Circuit cases
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`identified by Finjan holds otherwise. See Summit 6, LLC v. Samsung Elecs. Co., Ltd., 802 F.3d
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`1283 (Fed. Cir. 2015) (jury verdict that specifically stated “lump sum”, and expert testimony that
`
`a lump sum would compensate for past and future infringement, precluded an award of an ongoing
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`royalty); Telcordia Techs., Inc. v. Cisco Sys, Inc., 612 F.3d 1365, 1377-78 (Fed. Cir. 2010) (where
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 15 of 26 PageID #: 8707
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`parties’ experts provided competing opinions as to whether a running royalty or lump sum award
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`was appropriate, district court had broad discretion to interpret general verdict form as more
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`reflective of compensating the plaintiff only for past infringement). And while the defendant in
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`Acceleration Bay, 324 F. Supp. 3d at 490, presented (and the Court rejected) similar arguments as
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`Rapid7 does here, Rapid7 respectfully argues that a different result is appropriate here given the
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`facts of this case, including the speculative and unsupported nature of Mr. Parr’s projections.
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`D. Mr. Parr’s Reliance on the
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` Jury Verdicts and Settlement Agreements Renders His
`Analysis Flawed
`
`Finjan argues this should be a motion in limine, but cites to no authority that an expert’s
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`reliance on jury verdicts and resulting settlement agreements to support a reasonable royalty
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`opinion can only be (or even should be) considered in a motion in limine. To the contrary, courts
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`in this district have routinely considered these issues in Daubert motions, because they go to the
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`reliability of an expert’s Georgia-Pacific analysis. See, e.g., Zimmer Surgical, Inc. v. Stryker
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`Corp., 365 F. Supp. 3d 466, 494-496 (D. Del. 2019); Acceleration Bay, 324 F. Supp. 3d 470, 489
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`(D. Del. 2018); M2M Solutions LLC v. Enfora, Inc., 167 F. Supp. 3d 665, 675-679 (D. Del. 2016).
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`Finjan’s arguments on the merits also fail. As to the jury verdicts in the Secure Computing,
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`Sophos, and Blue Coat I matters3, Finjan presents no rebuttal to Rapid7’s arguments that this type
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`of evidence (and opinions) should be excluded because the jury verdicts “do not represent evidence
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`from which a hypothetical negotiation can be reliably determined.” Acceleration Bay LLC v.
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`Activision Blizzard, Inc., 324 F. Supp. 3d 470, 489 (D. Del. 2018). Finjan also does not address
`
`the specific arguments that Rapid7 raised as to the additional indicia of unreliability posed by each
`
`
`3 To be clear, Mr. Parr only referenced the jury’s award as to the ’780 Patent as supporting his
`opinions. D.I. 208 Ex. 1 (Parr Rep. ¶ 167). The remainder of the verdict was the subject of the
`appeal and remand in Blue Coat, 879 F.3d 1299, and, therefore, is clearly irrelevant.
`
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 16 of 26 PageID #: 8708
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`jury verdict. See, e.g., D.I. 207, at 17-20; see also Blue Coat, 879 F.3d at 1312 (“Secure Computing
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`did not involve the ’844 patent, and there is no evidence showing that the patents that were at issue
`
`are economically or technologically comparable.”). Thus, at a minimum, this portion of Rapid7’s
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`motion should be granted and Mr. Parr should not be permitted to rely on these jury verdicts in
`
`support of his reasonable royalty opinions and they should not be permitted into evidence.
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`Separate and apart from the jury verdicts, Finjan also has no answer to Rapid7’s myriad of
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`facts showing the settlement agreements that were later entered into by the parties in each of these
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`actions are unreliable and cannot be used by Mr. Parr to support his reasonable royalty opinions.
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` Finjan’s argument that this agreement “relates to patents related to the patents-in-
`
`suit, to a company in the cyber-security space” (D.I. 223, at 18) is not sufficient to demonstrate
`
`the requisite economic and technical comparability to support Mr. Parr’s opinions. See Blue Coat,
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`879 F.3d at 1312 (rejecting similar “surface similarity”). Finjan also fails to address any of the
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`reasons that Rapid7 identified that justify its exclusion as reliable evidence here. See D.I. 207, at
`
`18-19; see also D.I. 208 Ex. 3 (Garland Dep. at 138-140 (discussing D.I. 208 Ex. 4)). Put simply,
`
`the
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` is an outlier settlement agreement that bears no relationship to the hypothetical negotiation
`
`and, therefore, the Court should preclude Mr. Parr from referencing or relying on it.
`
`. Finjan does not dispute that Mr. Parr confirmed he has “no
`
`knowledge of how the
`
` was calculated or derived.” D.I.
`
`208 Ex. 2 (Parr Dep. at 79:13-16). Finjan also does not dispute that its corporate representative
`
`also testified that Finjan was “
`
`.” D.I. 208 Ex. 3 (Garland Dep. at 289:4-
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`8). On this basis alone, the lump sum figure should be excluded. The other provisions are similarly
`
`irrelevant and unreliable indicators of what the parties here would have agreed to at the
`
`hypothetical negotiation, given that Mr. Parr does not show how the products licensed are
`
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`Case 1:18-cv-01519-MN Document 238 Filed 11/20/20 Page 17 of 26 PageID #: 8709
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`comparable to Rapid7’s products. Most importantly, Finjan does not dispute that the agreement
`
`was the culmination of over 17 different actions pending worldwide, including four jury trials, and
`
`an additional three on the docket, and thus heavily tainted by the “coercive environment of patent
`
`litigation.” LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 77-78 (Fed. Cir. 2012).
`
` Finjan offers the strawman that Rapid7 “faults Mr. Parr for attempting to calculate
`
`a royalty rate based on the evidence presented in the
`
` litigation.” D.I. 223, at 18. That is not
`
`Rapid7’s argument. Rapid7’s position is: (1) there is no evidence in the record to support a
`
`conclusion that the case involved similar technology or a competitor; (2) the trial court itself
`
`deemed it “unclear” how the jury rendered its verdict; and (3) Mr. Parr had no knowledge of how
`
`the ultimate lump sum figure was calculated. D.I. 207, at 19-20. On the issue of the jury verdict,
`
`Finjan has no response to why Mr. Parr would be better positioned to determine the basis of the
`
`jury’s verdict than the trial court that oversaw the trial and all of the evidence. See Finjan, Inc. v.
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`Sophos, Inc., 244 F. Supp. 3d 1016, 1037 (N.D. Cal. 2017) (finding that it was “not clear that the
`
`jury adopted Layne-Farrar’s opinion” and that it was instead “possible that the jury based its
`
`damages award on the fact evidence presented or the expert testimony of Sophos’ expert”). As to
`
`the resulting settlement agreement, Mr. Parr provides no opinions as to why that
`
`
`
` supports his conclusions here. Nor could he, given that the settlement
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`followed extended litigation (including an appeal), and thus appears to have clearly been tainted
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`by the “coercive environment of patent litigation.” LaserDynamics, 694 F.3d at 77-78.
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`II.
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`Dr. Mitzenmacher’s Infringement Opinions for Nexpose and AppSpider for the ’154
`and ’289 Patents Should be Excluded
`A.
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`’154 Patent
`
`Finjan does not dispute that Dr. Mitzenmacher must show the accused