Finjan, Inc. v. Blue Coat Systems, Inc.

MOTION for Judgment as a Matter of Law Plaintiff Finjan, Inc.'s Motion for Judgment as a Matter of Law Pursuant to Federal Rule of Civil Procedure 50

N.D. Cal.November 13, 2017

__________________________________________________________________________________ FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PAUL J. ANDRE (State Bar No. 196585) pandre@kramerlevin.com LISA KOBIALKA (State Bar No. 191404) lkobialka@kramerlevin.com JAMES HANNAH (State Bar No. 237978) jhannah@kramerlevin.com HANNAH LEE (State Bar No. 253197) hlee@kramerlevin.com KRAMER LEVIN NAFTALIS & FRANKEL LLP 990 Marsh Road Menlo Park, CA 94025 Telephone: (650) 752-1700 Facsimile: (650) 752-1800 Attorneys for Plaintiff FINJAN, INC. IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION FINJAN, INC., a Delaware Corporation, Plaintiff, v. BLUE COAT SYSTEMS, LLC, a Delaware Corporation, Defendant. Case No.: 15-cv-3295-BLF-SVK PLAINTIFF FINJAN, INC.’S MOTION FOR JUDGMENT AS A MATTER OF LAW PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 50(a) Date: TBD Time: TBD Place: Courtroom 3, 5th Floor Before: Hon. Beth Labson Freeman Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 1 of 24 i FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS Page NOTICE OF MOTION AND MOTION .................................................................................................. 1 RELIEF REQUESTED ............................................................................................................................. 1 I. LEGAL STANDARD ................................................................................................................... 1 II. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT FAILED TO PRESENT EVIDENCE OF GOVERNMENT SALES .................................................................................. 2 III. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT INFRINGES THE ASSERTED CLAIMS OF THE ASSERTED PATENTS ........................................................... 3 Finjan Presented Substantial Evidence That Blue Coat Infringes, A. Literally or Under the Doctrine of Equivalents, Claim 15 of the ‘844 Patent. ........................................................................................................... 3 Finjan Presented Substantial Evidence That Blue Coat Infringes, B. Literally Under The Doctrine of Equivalents, Claim 10 of the ‘494 Patent..................................................................................................................... 3 Finjan Presented Substantial Evidence That Blue Coat Infringes, C. Literally and Under The Doctrine of Equivalents, Claim 1 of the ‘731 Patent ............................................................................................................ 4 Finjan Presented Substantial Evidence That Blue Coat Infringes, D. Literally and Under The Doctrine of Equivalents, Claim 1 of the ‘968 Patent ............................................................................................................ 6 Finjan Presented Substantial Evidence That Blue Coat Infringes E. Claim 22 of the ‘408 Patent. ................................................................................. 7 Finjan Presented Substantial Evidence That Blue Coat Infringes, F. Literally Or Under The Doctrine of Equivalents, Claims 1 and 10 of the ‘621 Patent. ................................................................................................. 9 Finjan Presented Substantial Evidence That Blue Coat Infringes G. The ‘844, ‘494, ‘731, ‘968 and ‘621 Patents Under The Doctrine of Equivalents. ......................................................................................................... 11 Finjan is Entitled to JMOL of Infringement Because Blue Coat’s H. Non-Infringement Expert Applied an Improper Reading of the Asserted Claims. ................................................................................................. 11 IV. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT WILLFULLY INFRINGES FINJAN’S ASSERTED PATENTS ..................................................................... 13 V. FINJAN IS ENTITLED TO JMOL THAT IT IS ENTITLED TO DAMAGES ........................ 14 VI. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT FAILED TO PRESENT SUBSTANTIAL EVIDENCE TO SUPPORT A DEFENSE TO DAMAGES BASED ON THE BLUE COAT I VERDICT ............................................................................. 19 VII. CONCLUSION ........................................................................................................................... 20 Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 2 of 24 ii FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases Erie Eng’d Prods., Inc. v. Wayne Integrated Techs. Corp., No. CV 03-3776, 2005 WL 6582921 (E.D.N.Y. July 29, 2005) ........................................................ 2 i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010), aff’d 564 U.S. 91 (2011) ................................................................. 14 Larson v. U.S., 26 Cl. Ct. 365 (1992) .......................................................................................................................... 2 Nichols v. City of San Jose, No. 14-cv-03383-BLF, 2017 WL 3007072 (N.D. Cal. July 14, 2017) ............................................... 1 Parker Beach Restoration, Inc. v. U.S., 58 Fed. Cl. 126 (2003) ........................................................................................................................ 2 Sevenson Envtl. Servs., Inc. v. Shaw Envtl., Inc., 477 F.3d 1361 (Fed. Cir. 2007)........................................................................................................... 2 Stryker Corp. v. Zimmer, Inc., No. 2013-1668, 2016 WL 4729504 (Fed. Cir. Sept. 12, 2016) ........................................................ 14 Statutes 28 U.S.C. § 1498 ................................................................................................................................... 1, 2 35 U.S.C. § 284 ....................................................................................................................................... 14 Other Authorities Fed. R. Civ. P. 50(a)(1) ............................................................................................................. 1, 2, 13, 20 Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 3 of 24 1 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION AND MOTION TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: NOTICE IS HEREBY GIVEN that as soon as the matter may be heard by the Court, Finjan, Inc. (“Finjan”) will and hereby does move the Court for an order granting judgment as a matter of law. This Motion is based on this Notice of Motion, the Memorandum of Points and Authorities, the trial record, the pleadings and papers on file, and any evidence and argument presented to the Court. RELIEF REQUESTED Pursuant to the Federal Rule of Civil Procedure 50(a), Finjan moves for judgment as a matter of law (“JMOL”) that Blue Coat Systems LLC (“Blue Coat”) filed to present “a legally sufficient evidentiary basis” for the following claims: (1) Blue Coat’s claim of government sales to support its affirmative defense under 28 U.S.C. § 1498; (2) Blue Coat’s claims of that Blue Coat’s Accused Products1 do not infringe the Asserted Claims of the Asserted Patents;2 (3) Blue Coat’s claim Blue Coat’s infringement of the Asserted Patents was not willful; (4) Blue Coat’s claim that Finjan is not entitled to damages; and (5) Blue Coat’s claim that has a defense to damages based on the Finjan, Inc. v. Blue Coat Systems, Inc., No. 13-cv-03999-BLF (N.D. Cal.) (“Blue Coat I”) verdict. I. LEGAL STANDARD A court may grant judgment as a matter of law when “a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue . . . .” Fed. R. Civ. P. 50(a)(1); Nichols v. City of San Jose, No. 14-cv-03383-BLF, 2017 WL 3007072, at *1 (N.D. Cal. July 14, 2017) (a court may grant JMOL “if no reasonable juror could find in the non-moving party's favor”) (citation omitted). 1 The Accused Products are: (1) GIN (U.S. Patent No. 6,154,844 (the “ ‘844 Patent”), Claim 15; U.S. Patent No. 8,677,494 (the “ ‘494 Patent”), Claim 10; and U.S. Patent No. 9,189,621 (the “ ‘621 Patent”), Claims 1 and 10); (2) Advanced Secure Gateway (“ASG”) with Malware Analysis Appliance (“MAA”) (U.S. Patent No. 6,965,968 (the “ ‘968 Patent”), Claim 1; U.S. Patent No. 7,418,731 (the “ ‘731 Patent”), Claim 1); and (3) Web Security Service (“WSS”) with GIN (U.S. Patent No. 8,225,408 (the “ ‘408 Patent”), Claim 22). 2 The “Asserted Patents” and “Asserted Claims” are Claim 15 of the ‘844 Patent, Claim 10 of the ‘494 Patent, Claims 1 and 10 of the ‘621 Patent, Claim 1 of the ‘968 Patent”, Claim 1 of the ‘731 Patent, and Claim 22 of the ‘408 Patent. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 4 of 24 2 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT FAILED TO PRESENT EVIDENCE OF GOVERNMENT SALES Blue Coat failed to present “a legally sufficient evidentiary basis” at trial to support an affirmative defense under 28 U.S.C. § 1498 (“Section 1498”). Fed. R. Civ. P. 50(a). The Section 1498 affirmative defense requires proof of two elements: (1) that the use or manufacture of the infringing product was for the Government and (2) that the use of the infringing product was with the authorization or consent of the Government that is express or implied. Sevenson Envtl. Servs., Inc. v. Shaw Envtl., Inc., 477 F.3d 1361, 1365-67 (Fed. Cir. 2007). Government sales, standing alone, do not establish a defense under Section 1498. Erie Eng’d Prods., Inc. v. Wayne Integrated Techs. Corp., No. CV 03-3776, 2005 WL 6582921, at *3 (E.D.N.Y. July 29, 2005). Blue Coat failed to present evidence to prove that the Government provided express or implied consent to use the infringing the Accused Products. First, Blue Coat failed to present substantial evidence of express consent which is typically established by an explicit authorization or consent clause within a contract. Parker Beach Restoration, Inc. v. U.S., 58 Fed. Cl. 126, 132 (2003). Blue Coat offered no contracts or agreements with the U.S. Government and its fact witnesses discussed products not at issue in this case (Trial Tr. at 1402:18-21), referred to generalized meetings with and training provided to U.S. Government customers with no indication that such trainings and meetings relates specifically to the Accused Products, (Trial Tr. at 1403:2-13), and testified that they did not know which products on the only two exhibits Blue Coat presented JTX-3070 and DTX-2095 were relevant to this case. Trial Tr. at 1574:7-25; 1576:13-18. Second, Blue Coat also failed to provide evidence of any implied authorization or consent by the Government. Blue Coat failed to present any evidence at trial that the U.S. Government had any knowledge of infringement or that the U.S. Government customers received and used any of the infringing products that were first sold to the distributors—which is required to show implied consent. Larson v. U.S., 26 Cl. Ct. 365, 370 (1992). Blue Coat’s witness testified that “a way” to verify that the end-user is using the products is when the technical support team is contacted by an end-user, but did not testify that this actually occurred with respect to any U.S. Government customers. Trial Tr. at 1575:4-14. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 5 of 24 3 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT INFRINGES THE ASSERTED CLAIMS OF THE ASSERTED PATENTS Finjan Presented Substantial Evidence That Blue Coat Infringes, Literally or A. Under the Doctrine of Equivalents, Claim 15 of the ‘844 Patent. No reasonable jury could find that GIN/WebPulse does not literally infringe Claim 15 of the ‘844 Patent. Finjan presented substantial evidence demonstrating GIN/WebPulse satisfies the preamble and Elements 1-2 of Claim 15 of the ‘844 Patent, with Blue Coat documents, source code, witness testimony, expert testimony and testing of the Accused Products establishing that: (Preamble: “[a]n inspector system comprising”) GIN/WebPulse is an inspector system (Trial Tr. at 501:22-504:14; PTX-105; JTX-3043); (Element 1: “memory storing a first rule set; and”) GIN/WebPulse contains a memory with a rule set (Trial Tr. at 504:15-514:17; PTX-1025; PTX-290; PTX-295; PTX-1276; PTX- 575); and (Element 2: “a first content inspection engine for using the first rule set to generate a first Downloadable security profile that identifies suspicious code in a Downloadable, and for linking the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients”) GIN/WebPulse contains a content inspection engine that generates a profile identifying suspicious code and links the profile before making the downloadable available (Trial Tr. at 514:18-515:3, 517:11-537:13; PTX-1274; PTX-49; PTX-368; PTX-423; PTX-427; PTX-564; PTX- 499; PTX-1025; and JTX-3050); see also generally Trial Tr. at 469:16-539:9, 560:9-23, 565:14-591:9, 603:18-605:11. Blue Coat challenged only Element 2 with nothing but the unsupported opinion of Dr. Nielson, who did not cite any exhibits or witness testimony (aside from PTX564 to show that the MAA reports also show information that is not code), primarily arguing that GIN/WebPulse do not identify code. Trial Tr. at 1618:16-18, 1626:8-11. Based on this substantial evidence and the lack of evidence from Blue Coat, Finjan is entitled to JMOL that GIN/WebPulse infringes Claim 15 of the ‘844 Patent either literally or under the doctrine of equivalents (as described below). Finjan Presented Substantial Evidence That Blue Coat Infringes, Literally Under B. The Doctrine of Equivalents, Claim 10 of the ‘494 Patent. No reasonable jury could find that GIN/WebPulse does not literally infringe Claim 10 of the ‘494 Patent. Finjan presented substantial evidence demonstrating that GIN/WebPulse satisfies the preamble and Elements 1-3 of Claim 10 of the ‘494 Patent with Blue Coat documents, source code, Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 6 of 24 4 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 witness testimony, expert testimony and testing of the Accused Products establishing that: (Preamble: “[a] system for managing Downloadables, comprising”) GIN/WebPulse contains a system for managing downloadables (Trial Tr. at 501:22-504:14, 540:18-543:12); (Element 1: “a receiver for receiving an incoming Downloadable”) GIN/WebPulse contains a receiver for incoming downloadables (Trial Tr. at 542:14-546:13; PTX105; and PTX1025); (Element 2: “a Downloadable scanner coupled with said receiver, for deriving security profile data for the Downloadable, including a list of suspicious computer operations that may be attempted by the Downloadable; and”) GIN/WebPulse contains a scanner for deriving security profile information from downloadables, including a list of suspicious operations (Trial Tr. at 546:14-552:17; PTX-211; PTX-516; JTX-3060); and (Element 3: “a database manager coupled with said Downloadable scanner, for storing the Downloadable security profile data in a database”) GIN/WebPulse contains a database manager for storing security profile in a database (Trial Tr. at 554:11-559:10; JTX-3050; PTX-1276; PTX-211; PTX-1025); see also generally, Trial Tr. at 469:16-496:21, 540:18-560:8. 565:14-605:11. Blue Coat challenged only Element 2 with nothing but the unsupported opinion of Dr. Nielson, who did not cite any exhibits or witness testimony, primarily arguing that GIN/WebPulse do not identify suspicious operations. Trial Tr. at 1592:20, 1597:7-12, 1598:1-2, 1603:19-21. Based on this substantial evidence and the lack of evidence from Blue Coat, Finjan is entitled to JMOL that GIN/WebPulse infringes Claim 10 of the ‘494 Patent either literally or under the doctrine of equivalents (as described below). Finjan Presented Substantial Evidence That Blue Coat Infringes, Literally and C. Under The Doctrine of Equivalents, Claim 1 of the ‘731 Patent No reasonable jury could find that Blue Coat’s ASG with MAA products do not literally infringe Claim 1 of the ‘731 Patent. Finjan presented substantial evidence demonstrating ASG with MAA satisfies the preamble and Elements 1-4 of Claim 1 of the ‘731 patent with Blue Coat documents, source code, witness testimony, expert testimony and testing of the Accused Products establishing that: (Preamble: “[a] computer gateway for an intranet of computers, comprising”) the ASG acts as the required gateway by intercepting a request and, if it does not have information and requires a scan, sends the request to the MAA to be scanned before returning it to the client (Trial Tr. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 7 of 24 5 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 at 694:9-695:4); (Element 1: “a scanner for scanning incoming files from the Internet and deriving security profiles for the incoming files, wherein each of the security profiles comprises a list of computer commands that a corresponding one of the incoming files is programmed to perform”) the MAA is a scanner that receives files from the ASG and scans them through sandboxing technology and based on that analysis will return back to the ASG an analysis report that contains information about what the MAA found, including behavioral profile that identifies a list of suspicious commands (Trial Tr. at 695:5-715:9; PTX-360; JTX-3003; JTX-3048; JTX-3120; PTX-575; PTX-426; PTX-1025 at 1215; PTX-1025 at 1306; PTX-1025 at 1355; PTX-1274); (Element 2: “a file cache for storing files that have been scanned by the scanner for future access, wherein each of the stored files is indexed by a file identifier”) the ASG contains the file cache, often referred to as the object store, wherein files are indexed by a file identifier, such as a hash of the URL (Trial Tr. at 715:11-720:10; PTX-352; JTX- 3037; PTX-1277); (Element 3: “a security profile cache for storing the security profiles derived by the scanner, wherein each of the security profiles is indexed in the security profile cache by a file identifier associated with a corresponding file stored in the file cache”) there are security profile caches in both the ASG and MAA (i.e., MAA- events cache and the MAG2; ASG- ThreatDB and the cachestore) and various identifiers, such as the task identifier and SHA1 hash, are associated with the file (Trial Tr. at 720:11-727:7; PTX-426; PTX-295; PTX-1025 at 530; PTX-1025 at 1795; PTX-1025 at 2252-53); and (Element 4: “a security policy cache for storing security policies for intranet computers within the intranet, the security policies each including a list of restrictions for files that are transmitted to a corresponding subset of the intranet computers”) the policy cache is the policy repository or policy container in the ASG and the security policies contain a list of restrictions for files (Trial Tr. at 727:9- 734:4, 735:4-737:11; PTX-565; PTX-579; PTX-563; PTX-331; PTX-1278); see also generally Trial Tr. at 618:8-24, 624:21-24, 625:19-640:19, 640:20-737:11. Blue Coat challenged only Element 4 with nothing but the unsupported opinion of Dr. Nielson, who did not cite any exhibits or witness testimony, primarily arguing that there are not multiple policies in the Accused Product combination. Trial Tr. at 1650:17-1653:5. Based on this substantial evidence and the lack of evidence from Blue Coat, Finjan is entitled to JMOL that ASG with MAA Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 8 of 24 6 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 infringes Claim 1 of the ‘731 Patent either literally or under the doctrine of equivalents (as described below). Finjan Presented Substantial Evidence That Blue Coat Infringes, Literally and D. Under The Doctrine of Equivalents, Claim 1 of the ‘968 Patent No reasonable jury could find that Blue Coat’s ASG with MAA products do not literally infringe Claim 1 of the ‘968 Patent. Finjan presented substantial evidence demonstrating ASG with MAA satisfies the preamble and Elements 1-3 of Claim 1 of the ‘968 patent with Blue Coat documents, source code, witness testimony, expert testimony and testing of the Accused Products, including the evidence that demonstrated Blue Coat’s infringement of the ‘731 Patent which equally establishes Blue Coat’s infringement of the ‘968 Patent, establishing that: (Preamble: “[a] policy-based cache manager, comprising”) the ASG with MAA contain a policy based cache manager (Trial Tr. at 740:7-23); (Element 1: “a memory storing a cache of digital content, a plurality of policies, and a policy index to the cache contents, the policy index including entries that relate cache content and policies by indicating cache content that is known to be allowable relative to a given policy, for each of a plurality of policies”) the memory for storing content and policies is on the ASG, the cache of digital content is the object store, the plurality of policies is the policy repository or the policy container and the policy index if the policy index in the ASG product (Trial Tr. at 742:13-18, 743:4- 752:19, 759:18-24, 759:25-760:2, 760:3-10; JTX-3037; PTX-522; JTX-3036; PTX-1279); (Element 2: “a content scanner, communicatively coupled with said memory, for scanning a digital content received, to derive a corresponding content profile”) the MAA corresponds to the content scanner (Trial Tr. at 742:19-23, 752:21-756:7, 760:11-13; JTX-3048; PTX-571; PTX-1279); and (Element 3: “a content evaluator, communicatively coupled with said memory, for determining whether a given digital content is allowable relative to a given policy, based on the content profile, the results of which are saved as entries in the policy index”) the content evaluator that will make the final policy decision is policy engine of ASG and the policy engine uses policy tickets to make and record allowability decisions (Trial Tr. at 742:24-725:3, 756:9-759:16, 760:14-17; PTX-563; PTX-1025 at 1650; PTX- 1278); see also generally Trial Tr. at 618:8-24, 624:21-24, 625:19-640:19, 640:20-737:11; JTX-3002. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 9 of 24 7 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Blue Coat only disputed Element 1 of the ‘968 Patent based primarily on Dr. Nielson’s argument that allowability decisions are not saved. Trial Tr. at 1673:2-1684:23; PTX-1025 at 4515; PTX-1025 at 4515; PTX-1025 at 4155. Based on this substantial evidence and the lack of evidence from Blue Coat, Finjan is entitled to JMOL that ASG with MAA infringes Claim 1 of the ‘968 Patent either literally or under the doctrine of equivalents (as described below). Finjan Presented Substantial Evidence That Blue Coat Infringes Claim 22 of the E. ‘408 Patent. No reasonable jury could find that Blue Coat’s WSS with GIN/WebPulse does not infringe Claim 22 of the ‘408 Patent. Finjan presented substantial evidence demonstrating WSS with GIN/WebPulse satisfies the preamble and Elements 1-7 of Claim 22 of the ‘408 Patent with Blue Coat documents, source code, witness testimony, expert testimony and testing of the Accused Products establishing that: (Preamble: “[a] non-transitory computer-readable storage medium storing program code for causing a computer to perform the steps of”) GIN/WebPulse uses program code that is stored on a non-transitory computer-readable storage medium (Trial Tr. at 769:12-770:13); (Element 1: “receiving an incoming stream of program code”) WSS with GIN/WebPulse receives an incoming stream of product code (Trial Tr. at 770:14-775:7; JTX-3042; PTX-405; PTX-1025 at 34; PTX-1025 at 32; PTX-1025 at 106); (Element 2: “determining any specific one of a plurality of programming languages in which the incoming stream is written”) GIN/WebPulse with WSS products determine the specific programming language in which the incoming stream is written, such as PDF, HTML, and JavaScript (Trial Tr. at 769:8-786:22; JTX-3005; PTX-1025 at 23; PTX-1025 at 108; PTX-1025 at 110; PTX-1025 at 26; PTX-1275); (Element 3: “instantiating a scanner for the specific programming language, in response to said determining, the scanner comprising parser rules and analyzer rules for the specific programing language, wherein the parser rules define certain patters in terms of tokens, tokens being lexical constructs for the specific programming language, and wherein the analyzer rules identify certain combinations of tokens and patterns as being indicators of corresponding exploits, exploits being portions of program code that are malicious”) WSS with GIN/WebPulse instantiates scanners such as a PDF scanner, an HTML scanner, and a JavaScript scanner on the incoming programing code using parser rules including such as searching for “eval”, “unescape”, “OpenAction” Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 10 of 24 8 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 tokens (which are lexical constructs for specific programming language) and analyzer rules such as counting the number of suspicious tokens and incrementing particular variables within the context structure (such as nShadyJScriptCalls) (Trial Tr. at 786:23-800:10; PTX-214; PTX-1025 at 441; PTX- 1025 at 1532; PTX-1025 at 443; PTX-1025 at 444; PTX-1025 at 1536; PTX-1025 at 1533; PTX-1025 at 1534); (Element 4: “identifying individual tokens within the incoming stream”) WSS with GIN/WebPulse identify individual tokens within the incoming stream, with examples of tokens being eval, unescape and document.write (Trial Tr. at 800:12-801:15; PTX-1025 at 443); (Element 5: “dynamically building, while said receiving receives the incoming stream, a parse tree whose nodes represent tokens and patterns in accordance with parser rules”) the parse tree is the context structure and describing the dynamical building of hierarchical structure of nodes pursuant to the Court’s claim construction (Trial Tr. at 801:16-810:22; PTX-1025 at 1775); (Element 6: “dynamically detecting, while said dynamically building builds the parse tree, combinations of nodes in the parse tree which are indicator or potential exploits, based on the analyzer rules”) WSS and GIN/WebPulse uses the context structure to look for combinations of nodes in the parse tree that might be indicators of potential exploits based on analyzer rules (Trial Tr. at 810:23-816:12; PTX-1025 at 242; PTX-1025 at 450; PTX-1025 at 444); (Element 7: “indicating the presence of potential exploits within the incoming stream, based on said dynamically detecting”) the WSS with GIN/WebPulse indicate the presence of exploits, for example a system of caucuses and conventions that calculate risk levels that correspond to an indicator identifying the presence of the potential exploit based on the detection mechanism (Trial Tr. at 816:14-822:1; JTX-3050; PTX-513; PTX-1025 at 124; PTX-1025 at 305); see also generally Trial Tr. at 762:14-822:1. Blue Coat primarily challenged Element 5 with Dr. Nielson testimony that the element requires that building and parsing be performed before the incoming stream is downloaded, but DRTR completely downloads the buffer before it does any analysis. Trial Tr. at 1663:15-1664:1; PTX-1025 at 106. However, Dr. Nielson acknowledged that in some cases, DRTR only downloads a portion of the file. Trial Tr. at 1665:8-22. Moreover, Dr. Nielson did not address the fact that the incoming stream of program code is finished or downloaded by the WSS while the parse tree is being built. Dr. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 11 of 24 9 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nielson further testified that he disagreed that the Accused Products build a parse tree because the content structure keeps track of information but is not constructed from tokens and patterns with the parser rules—but did not present a single exhibit or portion of source code to support his opinion. Trial Tr. at 1667:4-1670:8. Based on Finjan’s substantial evidence and the lack of evidence from Blue Coat, Finjan is entitled to JMOL that WSS with GIN/WebPulse infringes Claim 22 of the ‘408 Patent. Finjan Presented Substantial Evidence That Blue Coat Infringes, Literally Or F. Under The Doctrine of Equivalents, Claims 1 and 10 of the ‘621 Patent. No reasonable jury could find that Blue Coat’s GIN/WebPulse does not literally infringe Claims 1 and 10 of the ‘621 Patent. Finjan presented substantial evidence demonstrating GIN/WebPulse satisfies the preamble and Elements 1-5 of Claims 1 and 10 of the ‘621 with Blue Coat documents, source code, witness testimony, expert testimony and testing of the Accused Products establishing that: (Preamble, Claim 1: “[a] system for determining whether a downloadable is suspicious, comprising”) GIN/WebPulse is a system and its principal purpose is to determine whether a Downloadable is suspicious (Trial Tr. at 989:25-991:18; JTX-3050); (Preamble, Claim 10: “[a] system for reviewing an operating system call issued by a downloadable, comprising”) GIN/WebPulse is a system for determining whether a Downloadable is suspicious and that determination happens by reviewing calls through the probes and hooks, and the redirection of execution and recording of the events (Trial Tr. at 1049:5-22); (Element 1, Claims 1 and 10: “at least one processor for accessing elements stored in at least one memory associated with the at least one processor and for executing instructions associated with the elements, the elements including”) GIN/WebPulse, and in particular the FRS component of GIN/WebPulse, satisfies a processor and associated memory for processing various instructions (Trial Tr. at 991:19-995:11; JTX-3050; JTX-3048); (Element 2, first clause of Claims 1 and 10: “a plurality of operating system probes operating substantially in parallel for monitoring a plurality of subsystems of the operating system during runtime for an event caused from a request made by a downloadable”) GIN/WebPulse’s drivers constitute operating probes that operate substantially in parallel and monitor multiple subsystems in satisfaction of this claim element (Trial Tr. at 995:13-1009:25; JTX-3048; PTX-199; PTX-54; PTX-1025 at 947; PTX-1025 at 971); (Element 2, Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 12 of 24 10 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 second clause of Claim 10: “wherein the plurality of subsystems includes a network system”) one of the operating system probes, the network driver and/or the filter driver, within GIN/WebPulse is the network system (Trial Tr. at 104:25-1049:4; PTX-460; PTX-199; PTX-54); (Element 3, Claims 1 and 10: “an interrupter for interrupting processing of the request”) GIN/WebPulse contains hooks that interrupt the processing of requests (Trial Tr. at 1010:1-1018:18; PTX-199, PTX-460, PTX-1025 at 1978; PTX-1274); (Element 4, first clause of Claims 1 and 10: “a comparator coupled to the plurality of operating system probes for comparing information pertaining to the Downloadable against a predetermined security policy”) GIN/WebPulse contains a pattern matching engine that is coupled to a plurality of operating probes that compares information pertaining to the Downloadable against pattern groups (Trial Tr. at 1018:19-1027:1; JTX-3048; PTX-460; PTX-293; PTX-535); (Element 4, second clause Claim 1: “wherein the information pertaining to the downloadable includes information pertaining to an operation of the downloadable and distinct from information pertaining to the request”) GIN/WebPulse treats information pertaining to the operation of Downloadable separately from other events relating to the request (Trial Tr. at 1027:18-1036:6; JTX-3048; PTX-1025 at 1306; PTX-460; PTX-1025 at 971; PTX-575; PTX-1025 at 1215); and (Element 5, Claims 1 and 10: “a response engine for performing a predetermined responsive action based on the comparison”) GIN/WebPulse updates various databases (Trial Tr. at 1036:7-1044:24; PTX-294; PTX-1025 at 2454; PTX-1025 at 2453; PTX-54, JTX-3050; PTX-1274; PTX-1280); see also generally Trial Tr. at 892:13- 924:15, 981:5-1056:4, 1087:14-1134:12; JTX-3007; PTX-423; PTX-216. With Blue Coat’s primary argument in challenging Element 3, Dr. Nielson opined that he disagreed with Dr. Medvidovic’s opinion and cited a single portion of Blue Coat source code. Trial Tr. at 1637:6-17; PTX-1025 at 3440. In challenging the second clause of Element 4 of Claim 1, Dr. Nielson testified that the comparator is not coupled to operating probes at run time and pattern matching is done after the processing. Trial Tr. at 1640:15-1647:17; PTX-1025 at 3521; PTX-1025 at 3522; PTX-1025 at 3853; PTX-1025 at 3854. Based on this substantial evidence and the lack of evidence from Blue Coat , Finjan is entitled to JMOL that GIN/WebPulse infringes Claims 1 and 10 of the ‘621 Patent literally or under the doctrine of equivalents (as described below). Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 13 of 24 11 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Finjan Presented Substantial Evidence That Blue Coat Infringes The ‘844, ‘494, G. ‘731, ‘968 and ‘621 Patents Under The Doctrine of Equivalents. As set forth in Finjan’s opposition to Blue Coat’s motion for JMOL regarding the doctrine of equivalents, Finjan presented substantial evidence that Blue Coat infringes the following patents under the doctrine of equivalents: (i) Claim 15 of the ‘844 Patent (Element 2) (Trial Tr. at 469:16-496:21, 537:14-539:9; JTX-3007; PTX-423; JTX-3050; PTX-54; PTX-216; PTX-199; PTX-460; PTX-1025); (ii) Claim 10 of the ‘494 Patent (Element 10) (Trial Tr. at 469:16-496:21, 540:18-542:13, 552:18- 554:10, 559:11-560:8; PTX-211; PTX-516; JTX-3060; PTX-1274; PTX-368; PTX-564; PTX-499; PTX-1025; PTX-427; JTX-3050; PTX-423; JTX-3043; PTX-49; PTX-216; JTX-3001);(iii) Claim 1 of the ‘731 Patent (Element 1) (Trial Tr. at 618:8-24, 624:21-24, 625:19-640:19, 735:14-738:6; PTX-360, PTX-289; PTX-575; PTX-426; PTX-1025; JTX-3003; JTX-3048; JTX-3120); (iv) Claim 1 of the ‘968 Patent (Elements 1 and 3) (Trial Tr. at 618:25-619:15, 624:25-625-2, 625:19-640:19, 760:19-762:13; JTX-3037; JTX-3036; JTX-3037; PTX-331; PTX-522); and (v) Claims 1 and 10 of the ‘621 Patent (Element 3) (Trial Tr. at 902:16-924:22, 981:9-987:9, 1050:14-1051:23; JTX-3007; PTX-423; JTX- 3050; PTX-54; PTX-216; PTX-199; PTX-460; PTX-1025). Finjan’s experts, Drs. Cole, Mitzenmacher and Medvidovic, testified at length about the background of the invention and the function of the Accused Products, before ever beginning their element-by-element analysis of literal infringement, and later, infringement under the doctrine of equivalents. The only evidence Blue Coat presented to rebut Finjan’s substantial evidence is statements from Dr. Nielson, without citing any exhibits or witness testimony, that what Finjan accused is not equivalent. Trial Tr. at 1601:15-1602:20, 1626:12-1630:5, 1640:2-11, 1653:6-22, 1683:22-1684:23. Thus, Finjan is entitled to JMOL regarding infringement under the doctrine of equivalents for each of these Asserted Patents. Finjan is Entitled to JMOL of Infringement Because Blue Coat’s Non-H. Infringement Expert Applied an Improper Reading of the Asserted Claims. Finjan is also entitled to JMOL because Blue Coat’s expert did not apply the plain meaning of the claims or apply the claim language as construed by the Court for all of Finjan’s Asserted Patents. During cross examination, Blue Coat’s expert, Dr. Nielson, stated that he interpreted the claim Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 14 of 24 12 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 language in a manner inconsistent with the plain meaning of the claims as one of ordinary skill in the art would, as well as did not apply the Court’s claim construction for the terms in the case. For example, for the ‘844 Patent, he did not apply the plain meaning and the Court’s construction for the claim element “a first content inspection engine for using the first rule set to generate a first Downloadable security profile that identifies suspicious code in a Downloadable, and for linking the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.” See e.g., Trial Tr. at 1606:13-1610:1, 1612:6-1626:11, 1798:25-1800:20, 1806:19-24. For the ‘494 Patent, Dr. Nielson failed to apply the plain and ordinary meaning and the Court’s construction for the elements “a Downloadable scanner coupled with said receiver, for deriving security profile data for the Downloadable, including a list of suspicious computer operations that may be attempted by the Downloadable” and “a database manager coupled with said Downloadable scanner, for storing the Downloadable security profile data in a database.” See e.g., Trial Tr. at 1597:22-1600:16. Similarly, he failed to apply the plain and ordinary meaning and the Court’s construction for the following elements of the ‘968 Patent: “a memory storing a cache of digital content, a plurality of policies, and a policy index to the cache contents, the policy index including entries that relate cache content and policies by indicating cache content that is known to be allowable relative to a given policy, for each of a plurality of policies” and “a content evaluator, communicatively coupled with said memory for determining whether a given digital content is allowable relative to a given policy, based on the content profiles, the results of which are saved as entries in the policy index.” See e.g., Trial Tr. at 1673:21676:10, 1678:15-1681:22, 1682:10-1684:23. Additionally, he failed to apply the plain meaning and proper constructions to the ‘731 Patent for the element reciting “a security policy cache for storing security policies for intranet computers within the intranet, the security policies each including a list of restrictions for files that are transmitted to a corresponding subset of the intranet computers.” See e.g., Trial Tr. at 1650:17-1654:6. For the ‘408 Patent, he did not apply the plain and ordinary meaning and proper constructions for the elements of claim 22 reciting “receiving an incoming stream of program code,” “dynamically building, while said receiving receives the incoming stream, a parse tree whose nodes represent tokens and patterns in Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 15 of 24 13 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 accordance with the parser rules,” and “dynamically detecting, while said dynamically building builds the parse tree, combinations of nodes in the parse tree which are indicator or potential exploits, based on the analyzer rules.” See e.g., Trial Tr. at 1655:22-1669:17. Finally, for the ‘621 Patent, he did not apply the plain and ordinary meaning for the element of Claims 1 and 10 of “an interrupter for interrupting processing of the request.” He also did not apply the plain meaning and the Court’s construction for the element “a first comparator coupled to the plurality of operating system probes for comparing information pertaining to the downloadable against a predetermined security policy, wherein the information pertaining to the downloadable includes information pertaining to an operation of the downloadable and distinct from information pertaining to the request” recited in Claim 1 and the element of “a comparator coupled to the plurality of operating system probes for comparing information pertaining to the Downloadable against a predetermined security policy” recited in Claim 10. See e.g., Trial Tr. at 1634:22-1640:10, 1644:23-1647:16. Thus, Finjan is entitled to JMOL that Blue Coat infringes the Asserted Claims because Blue Coat’s non-infringement defense, as presented by its non-infringement expert, is premised on an incorrect reading of the Asserted Claims. IV. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT WILLFULLY INFRINGES FINJAN’S ASSERTED PATENTS Finjan presented substantial evidence that Blue Coat knowingly, intentionally and egregiously infringes Finjan’s Asserted Claims and no reasonable jury could find that Blue Coat’s infringement was not willful. Fed. R. Civ. P. 50(a)(1). Blue Coat does not dispute that it had pre-suit knowledge of the Asserted Patents. Finjan presented substantial evidence that despite this knowledge, Blue Coat elected to take affirmative steps to infringe Finjan’s Patents, such as implementing into new products technology that Blue Coat knew infringed Finjan’s patents based on the Blue Coat I action and verdict. Blue Coat’s Senior Vice President of Product Management testified that Blue Coat did nothing to change its products following the jury’s verdict of infringement in Blue Coat I. Trial Tr. at 1404:17- 1405:4, 1406:15-22, 1406:19-1407:5, 1409:24-1410:16. Finjan introduced evidence, including Blue Coat documents, confirming the launch date of the Accused Products as after the Blue Coat I verdict Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 16 of 24 14 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and that Blue Coat incorporated this infringing technology into new products. Trial Tr. at 1406:16- 1410:16, 1411:4-1414:12; PTX-55; PTX-48; PTX-49. Finjan also produced evidence, including Blue Coat’s internal e-mails, demonstrating that Blue Coat obtained in 2011 Finjan’s patented technology in secret and, after analysis, identified the features in Finjan’s technology that Blue Coat should incorporate into its products. Trial Tr. at 1414:15-1420:23; PTX-929; PTX-113. Willfulness can be established by circumstantial evidence particular where, as here, the infringing party had knowledge of the asserted patents. i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 860 (Fed. Cir. 2010), aff’d 564 U.S. 91 (2011); Stryker Corp. v. Zimmer, Inc., No. 2013-1668, 2016 WL 4729504, at *8 (Fed. Cir. Sept. 12, 2016). Based on the evidence Finjan presented and the lack of evidence provided by Blue Coat, a reasonable jury could only conclude that Blue Coat willfully infringes Finjan’s Asserted Patents. V. FINJAN IS ENTITLED TO JMOL THAT IT IS ENTITLED TO DAMAGES Finjan presented substantial evidence at trial that it is entitled to damages in the amount of no less than a reasonable royalty pursuant to 35 U.S.C. § 284 for Blue Coat’s infringement of the Asserted Patents. Finjan’s CEO, Philip Hartstein, testified regarding Finjan’s licensing practices (Trial Tr. at 357:13-392:15); Finjan’s general approach to licensing (Trial Tr. at 357:13-358:17); Finjan’s licensing rates of 8-16% of revenues, $8 per user (Trial Tr. at 358:17-368:9, 446:24-447:2); provisions in Finjan’s licenses (Trial Tr. at 368:10-371:14); and Finjan’s prior licenses, settlements and verdicts (Trial Tr. at 371:19- 392:15). At trial, Finjan presented the expert testimony of Drs. Cole, Mitzenmacher, and Medvidovic regarding the extent of Blue Coat’s infringement. Drs. Cole and Dr. Medvidovic testified that Webpulse processes more than 1.2 billion requests per day, and 80 million of those requests are processed by DRTR and Yara rules in the context of DRTR. Trial Tr. at 471:3-17, 482:6-23, 502:14- 504:14, 916:15-23, 1059:9-1060:16; PTX-105; JTX-3050. Finjan also played the deposition testimony of Tyler Anderson, architect of GIN, who testified that Webpulse processes 1.2 billion worldwide requests. PTX-1281 at 70:14-19, 71:12-25. Dr. Medvidovic testified, relying upon Blue Coat documents and witness testimony, that Blue Coat makes and compiles GIN/WebPulse in the United Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 17 of 24 15 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 States. Trial Tr. at 982:22-987:2; PTX-216. Dr. Mitzenmacher testified to the same. Trial Tr. at 765:10-12. He also offered testimony and evidence that GIN/WebPulse used overseas is controlled by Blue Coat from the United States, and that Blue Coat’s U.S. and worldwide users receive the beneficial use of GIN/WebPulse. Trial Tr. at 1051:24-1055:20; PTX-52. Finjan offered further evidence through Dr. Cole, Blue Coat documents and Blue Coat witness testimony that all development, maintenance, enhancement, and work on GIN/WebPulse is done in Draper, Utah. Trial Tr. at 495:7-496:21, 536:6- 10; PTX-216. Dr. Mitzenmacher also testified that the GIN/WebPulse product is developed in Draper, Utah, all GIN/WebPulse updates are pushed out of that location, and if the GIN/Webpulse service in Draper, Utah is shut down, GIN/WebPulse in its entirety would cease to function. Trial Tr. at 765:3- 22. Finjan also presented Blue Coat’s responses to Finjan’s requests for admission that GIN/WebPulse, including DRTR, is developed in the United States, and that updates for WebPulse, including DRTR, are pushed out of the United States. Trial Tr. at 889:9-23. Dr. Medvidovic testified regarding the technical advantages of each of the Asserted Patents. Trial Tr. at 899:17-21, 1056:24-1070:17. He testified that Finjan’s patented technology provide advantages in dealing with unknown threats, generating security profiles, recording and reusing security profiles, and assessing potentially malicious Downloadables at runtime. Trial Tr. at 1061:25- 1067:14. In particular, Dr. Medvidovic testified that the technical advantages of the Asserted Patents include, among other advantages: (i) ‘844 Patent: providing zero-day protection, increasing efficiency, permits offloading to the cloud and decreases expenses (Trial Tr. at 1062:15-1064:4); (ii) ‘494 Patent: increase speed and efficiency by storing the Downloadable security profile, proactive blocking of threats and reduction of costs (Trial Tr. at 1064:5-20); (iii) ‘621 Patent: real-time detection of previously unknown Downloadables, simultaneous monitoring of multiple subsystems, reduction of false positives and efficiency (Trial Tr. at 1064:21-1605:17); (iv) ‘731 Patent: efficient caching, use of fewer resources, rapid subsequent analysis of content, efficient and secure dissemination of web content (Trial Tr. at 1066:9-24); (v) ‘968 Patent: rapid dissemination of security decisions, optimized subsequent analysis, efficient use of system resources, flexibility to end user (Trial Tr. at 1066:25- 1067:19); and (vi) ‘408 Patent: providing a language independent solution for building parse trees and Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 18 of 24 16 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 allowing detection of combined attacks (Tr. at 1067:20-1068:9). Dr. Medvidovic presented testimony that Blue Coat uses and benefits from this multi-faceted defense. Tr. at 1069:7-1070:17. Dr. Medvidovic also presented evidence and testimony at trial, including Blue Coat documents and witness testimony and the opinions of Finjan’s technical experts, regarding the architecture of the Accused Products and how they relate to the technologies of each of Finjan’s Asserted Patents (Trial Tr. at 899:21-24, 1070:17-1072:25; JTX-3043) as follows: (i) ASG: three of the six capabilities Blue Coat identified are covered by the ‘968 and ‘731 Patents (Trial Tr. at 1075:25-1076:24; PTX-55); (ii) MAA: ten of the fourteen capabilities Blue Coat identified are covered by the ‘968 and ‘731 Patents (Trial Tr. at 1076:25-1080:11; JTX-3080); (iii) GIN/WebPulse: five of the forty-six capabilities Blue Coat identified are covered by the ‘621 Patent eleven of the forty-six capabilities Blue Coat identified are covered by the ‘844 Patent (Trial Tr. 1080:12-1084:8; PTX-216), and one of these capabilities is FRS (Trial Tr. at 1083:4-7; PTX-216); and (iv) WSS: three of the twenty-seven capabilities Blue Coat identified are covered by the ‘408 Patent (Trial Tr. at 1084:9-1086:7; PTX-526). Dr. Medvidovic assigned equal weight to each of these architectural components. Trial Tr. at 1075:5-24 (ASG), 1079:13-1080:11 (MAA), 1082:23-1084:8 (GIN/WebPulse), 1085:25-1086:7 (WSS). Dr. Medvidovic further testified that he reviewed and analyzed each of Blue Coat’s license agreements and concluded that none were technologically comparable to the Asserted Patents. Trial Tr. at 900:20-902:5. Dr. Medvidovic also confirmed the absence of any evidence relating to a non-infringing alternative to Finjan’s Asserted Patents. Trial Tr. at 1055:24-1056:4. Finjan’s damages expert, Dr. Meyer, presented an opinion, based on Blue Coat’s documents and witnesses, Finjan’s documents and witnesses industry publications and testimony of Finjan’s technical experts, regarding the appropriate reasonable royalty for Blue Coat’s infringement of the Asserted Patents. Trial Tr. at 1189:14-1227:21, 1234:20-1242:1; PTX-727; PTX-743; PTX-744; PTX- 245; JTX-3080; PTX-55; PTX-526; JTX-3050; PTX-1283. Dr. Meyer testified that the hypothetical negotiation dates for each of the Accused Products are: ‘408 Patent- August 28, 2013; ‘494- March 18, 2014; ‘844, ‘731 and ‘968 Patents- July 15, 2017; and ‘621 Patent- March 1, 2016. Trial Tr. at 1187:19-1188:10. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 19 of 24 17 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dr. Meyer testified that she utilized a revenue-based methodology for the ‘731, ‘968 and ‘408 Patents, and explained how she identified the appropriate revenue for each Accused Product based on Blue Coat revenue information, including only the specific sales related to the Accused Products and, where a combination of products accused, only including sales where a customer purchased the specific combination. Trial Tr. at 1240:2-1247:23. In testifying regarding how she apportioned the revenues associated with a particular Accused Product, Dr. Meyer explained she relied on Dr. Medvidovic’s analysis regarding the architectural components of the Accused Products for the ‘731, ‘968, and ‘408, Patents, and performed her own economic analysis. Trail Tr. at 1247:24-1250:6. Dr. Meyer testified she relied on Mr. Harstein’s testimony regarding the appropriate royalty rate to apply, which is 8% on hardware and 16% on software, inter alia, based on Finjan’s licensing practices. Trial Tr. at 1226:10-1227:21. Dr. Meyer also testified that she discounted the royalty base to the date of the hypothetical negotiation to account for the present value of money and risk associated with future revenue projections. Trial Tr. at 1253:7-1254:7. Dr. Meyer opined that a reasonable royalty for infringement of the ‘731, ‘968, and ‘408 Patents based on revenues was: $337,444 for the’ 731 Patent, $544,960 for the infringement of the ‘968 Patent alone or with the ‘731 Patent, and $373,406 for the ‘408 Patent. Trial Tr. at 1254:8-1255:25. Dr. Meyer also testified regarding the user-based methodology for determining a reasonable royalty for infringement by the FRS component of GIN/ Webpulse using the asserted claimed inventions of the ‘844 and ‘621 Patents, including her reliance on all of the testimony, including Mr. Hartstein’s testimony regarding applying a royalty rate of $8 per user, the importance and value of GIN/WebPulse, and Dr. Medvidovic’s testimony regarding the architectural components of GIN/WebPulse including the fact that FRS is 1 out of 46 features of GIN along with all the trial testimony that there are 175 million users of GIN. Trial Tr. at 768:14-769:11, 831:4-832:2, 886:24- 887:1, 1081:2-1084:8, 1215:17-1217:11, 1256:1-1259:8, 1355:20-1357:11; PTX-526. Dr. Meyer also testified regarding the appropriate reasonable royalty for Blue Coat’s infringement of the ‘494 Patent by GIN/Webpulse under a user-based methodology apportioning $8/user by 2.7% of the traffic considering the traffic from the previous case and appropriate time period, including when the Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 20 of 24 18 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 infringing components were added to the Accused Products, that goes to the footprint of the invention (DRTR/YARA) along with the trial testimony regarding the fact that there are 75 million users of Webpulse. Trial Tr. at 1058:18-1060:16, 1259:8-1262:25; JTX-3050. Dr. Meyer also testified that the percentage of U.S. users is about 52 percent based upon information Blue Coat provided in which 52% of revenues across Blue Coat products are U.S. revenues. Trial Tr. at 1217:12-1218:7, 1263:21- 1264:11; PTX-1283. Based on a user-based method of calculating damages, she opined that a reasonable royalty for infringement of the ‘494 Patent based on DRTR/Yara was $16.2 million, and a reasonable royalty for infringement of the ‘844 and/or ‘621 Patents based on FRS was $29.8 million. Trial Tr. at 1263:15-18. Blue Coat’s damages expert, Mr. Thomas, failed to rebut Finjan’s substantial evidence that it is entitled to a reasonable royalty. Mr. Thomas opined that the appropriate royalty rate to apply to revenues was 4-6% based on Finjan’s patent license agreements with M86 that was executed years before the relevant hypothetical negotiation dates and Trustwave. However, Mr. Thomas admitted on cross-examination that the 4% royalty rate was applied to total revenues related to an OEM that was the “floor” and on top of what was already paid as part of the license fee in the initial agreement. Trial Tr. at 1892:13-1893:17, 1911:1-1912:13. He also admitted that there were rates of at least 8% in Finjan’s patent license agreements dated around the times of the hypothetical negotiations. Trial Tr. at 1894:11-1897:2. He also agreed that the $8 per user was used in the Blue Coat I case and the royalty based on the $8 per user was upheld by the Court. Trial Tr. at 1892:6-12. Mr. Thomas also improperly failed to assess damages for each patent, and assumed that the ‘844 and ‘494 Patents covered the identical technology and treated them like they were one patent, despite the fact that he could not identify a single instance in which Finjan grouped two patents together and charged the same license amount for them. Trial Tr. at 1878:9-1879:3. He also mistakenly referred to Dr. Meyer’s user- based method as an improper “reasonableness check” when the “reasonableness check” had been employed against Dr. Meyer’s previous damages calculation of $23 million when additional products were accused of infringement in the case. Trial Tr. at 1890:13-1891:7. Mr. Thomas did not have any opinion regarding a reasonable royalty for Blue Coat’s Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 21 of 24 19 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 infringement of the ‘844 and ‘621 Patents in which FRS was at issue. He acknowledged during trial that he was not aware that FRS was infringing or alleged to be infringing at the time of his report. Trial Tr. at 1880:3-18. Mr. Thomas also acknowledged that there were no revenues for GIN/Webpulse, that he used a proxy for what he called “GIN/Webpulse revenues” and Blue Coat calls GIN the center of the universe for all its products. Trial Tr. at 1884:1-1886:25. He also acknowledged that no Blue Coat witness testified that revenues for Webfilter and Intelligence Services represented the value of GIN. Trial Tr. 1887:1-13. Mr. Thomas also admitted during trial that he did not confirm whether the government actually used the accused products or knew that the products were accused of infringement before removing government sales from his royalty base. Trial Tr. at 1887:17-1888:2. Mr. Thomas’ apportionment of the ASG product based on 1% traffic sent from the CAS to the MAA was not tied to the entire infringing technology because it did not address any of the infringement involving the ASG product at issue. Trial Tr. at 1888:3-1889:15. Mr. Thomas used an even higher apportionment of GIN/Webpulse based on 6.7% Webpulse traffic sent to DRTR, rather than the 2.7% Webpulse traffic that Finjan’s damages expert used. Trial Tr. at 1889:16-1890:12. Blue Coat failed to present contrary evidence to rebut Finjan’s evidence supporting damages, and, as a result, no reasonable jury could conclude that Finjan is not entitled to a reasonable royalty. VI. FINJAN IS ENTITLED TO JMOL THAT BLUE COAT FAILED TO PRESENT SUBSTANTIAL EVIDENCE TO SUPPORT A DEFENSE TO DAMAGES BASED ON THE BLUE COAT I VERDICT Blue Coat failed to present substantial evidence to support to rebut an award of damages because the Accused Products and technologies at issue in this case are the same as the products and technologies presented in Blue Coat I. Blue Coat failed to produce any evidence whatsoever that the Asserted Patents and the same Accused Products and technologies are covered by the Blue Coat I verdict. Blue Coat provided no expert opinion at trial regarding whether the infringing technology from Blue Coat I is the same as the infringing technology in this litigation or what portion of damages tied directly to the infringement found in Blue Coat I, if any, overlapped with respect to any damages from the previous litigation. Blue Coat’s only evidence is a legally wrong conclusory statement by a Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 22 of 24 20 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 single fact witnesses that it was his “understanding” that if the Blue Coat I verdict meant that Blue Coat would have the right to use the patents at issue in Blue Coat I through their expiration. Trial Tr. at 1404:1405:4, 1406:9-14. Mr. Schoenfeld provided no basis for his purported understanding, did not compare the asserted patents or infringing products and technologies between the cases, and contradicted Blue Coat’s argument by confirming that Blue Coat did not receive a portfolio license to all of Finjan’s patents and that the Blue Coat I verdict only covered the products accused in Blue Coat I. Trial Tr. at 1406:15-1407:5, 1409:24-1410:16. Drs. Cole, Mitzenmacher, and Medvidovic, the only experts who testified in the first litigation with Blue Coat, testified at trial that the accused products were new and different from what was the infringing products in the first litigation with Blue Coat. Trial Tr. at 471:3-17, 480:7-483:23, 486:19-487:23, 488:24-491:12, 491:5-12; 496:25-497:3, 539:11- 24, 542:14-24, 543:13-19, 547:3-13, 548:12-549:12, 551:1-23; 553:25-554:10, 555:12-25, 560:18-23, 587:21-25, 590:8-591:1, 595:1-14, 741:19-742:12, 819:3-10, 863:1-864:20, 883:7-886:11, 917:7- 918:2; PTX-211; PTX-516; JTX-3060; PTX-55; JTX-3043; JTX-3050. Specifically, Finjan accused the ASG and MAA combination of products of infringing the ‘731 and ‘968 Patents and the WSS and GIN/WebPulse combination of products of infringing the ‘408 Patent. Id. These products were never previously accused of infringement in Blue Coat I. Id. In addition, Finjan accused the new YARA rules in DRTR of infringing the ‘494 Patent, and the FRS functionality in GIN of infringing the ‘844 and ‘621 Patents. For damages of infringement by GIN/WebPulse, Dr. Meyer excluded damages based on the 4% of traffic that was used to calculate damages in Blue Coat I. Trial Tr. at 1263:19-25. Finjan is entitled to JMOL that the Blue Coat I verdict cannot be used as a defense to damages. VII. CONCLUSION For the foregoing reasons, the Court should grant Finjan’s motion for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(a). Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 23 of 24 21 FINJAN’S MOTION FOR JUDGMENT AS A MATTER CASE NO. 15-cv-03295-BLF-SVK OF LAW PURSUANT TO FED. R. CIV. P. 50(a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: November 13, 2017 Respectfully submitted, By: /s/ Lisa Kobialka Paul J. Andre (SBN 196585) Lisa Kobialka (SBN 191404) James Hannah (SBN 237978) Hannah Lee (SBN 253197) KRAMER LEVIN NAFTALIS & FRANKEL LLP 990 Marsh Road Menlo Park, CA 94025 Telephone: (650) 752-1700 Facsimile: (650) 752-1800 pandre@kramerlevin.com lkobialka@kramerlevin.com jhannah@kramerlevin.com hlee@kramerlevin.com Attorneys for Plaintiff FINJAN, INC. Case 5:15-cv-03295-BLF Document 423 Filed 11/13/17 Page 24 of 24