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

MOTION for Judgment as a Matter of Law Blue Coat's Rule 50

N.D. Cal.November 14, 2017

BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 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 STEFANI E. SHANBERG (State Bar No. 206717) sshanberg@mofo.com JENNIFER J. SCHMIDT (State Bar No. 295579) jschmidt@mofo.com NATHAN B. SABRI (State Bar No. 252216) nsabri@mofo.com ROBIN L. BREWER (State Bar No. 253686) rbrewer@mofo.com EUGENE MARDER (State Bar No. 275762) emarder@mofo.com MADELEINE E. GREENE (State Bar No. 263120) mgreene@mofo.com MICHAEL J. GUO (State Bar No. 284917) mguo@mofo.com ALEX N. HADDUCK (State Bar No. 312962) ahadduck@mofo.com MORRISON & FOERSTER LLP 425 Market Street San Francisco, California 94105 Telephone: (415) 268-7000 Facsimile: (415) 268-7522 DAVID A. NELSON (Pro Hac Vice) davenelson@quinnemanuel.com NATHAN A. HAMSTRA (Pro Hac Vice) nathanhamstra@quinnemanuel.com QUINN EMANUEL URQUHART & SULLIVAN LLP 500 W. Madison Street, Suite 2450 Chicago, Illinois 60661 Telephone: (312) 705-7400 Facsimile: (312) 707-7401 Attorneys for Defendant BLUE COAT SYSTEMS LLC UNITED STATES DISTRICT COURT 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-03295-BLF-SVK BLUE COAT SYSTEMS LLC’S NOTICE OF MOTION AND RULE 50(A) MOTION FOR JUDGMENT AS A MATTER OF LAW Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 1 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK i 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 .................................................................................................................... 1 RELIEF REQUESTED .................................................................................................................... 1 I. LEGAL STANDARD .............................................................................................................. 2 II. BLUE COAT IS ENTITLED TO JUDGMENT OF NONINFRINGEMENT ........................ 2 A. There Is No Evidence of Infringement of Claim 15 of the ’844 Patent. .............................. 2 B. There Is No Evidence of Infringement of Claim 1 of the ’968 Patent. ................................ 4 C. There is No Evidence of Infringement of Claim 1 of the ’731 Patent. ................................ 5 D. There is No Evidence of Infringement of Claim 22 of the ’408 Patent. .............................. 6 E. There is No Evidence of Infringement of Claim 10 of the ’494 Patent. .............................. 7 F. There is No Evidence of Infringement of Claims 1 or 10 of the ’621 Patent. ..................... 8 III. BLUE COAT IS ENTITLED TO JUDGMENT OF NO WILLFUL INFRINGEMENT. ...... 9 IV. BLUE COAT IS ENTITLED TO JUDGMENT OF NO DAMAGES. ................................. 11 A. Blue Coat is Entitled to Judgment as a Matter of Law Regarding Foreign Users ............. 11 B. Blue Coat Is Entitled to Judgment as a Matter of Law Regarding Government Sales ...... 13 C. Blue Coat is Entitled to Judgment as a Matter of Law on Reasonable Royalties .............. 13 V. CONCLUSION ...................................................................................................................... 16 Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 2 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK ii 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 Adrea v. Barnes & Noble, Inc., 227 F. Supp. 3d 303 (S.D.N.Y. 2017) .................................................................................10, 11 Biscotti Inc. v. Microsoft Corp., Case No. 2:13-CV-01015-JRG-RSP, 2017 U.S. Dist. LEXIS 93166 (E.D. Tex. May 18, 2017) .....................................................................................................................13, 14 CAE Screenplates, Inc. v. Heinrich Fiedler Gmbh & Co. Kg, 224 F.3d 1308 (Fed. Cir. 2000) ...................................................................................................8 Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972) ..................................................................................................................12 Erfindergemeinschaft UroPep Gbr v. Eli Lilly & Co., Case No. 2:15-CV-1202-WCB, 2017 U.S. Dist. LEXIS 75517 (E.D. Tex. May 18, 2017) ...................................................................................................................................10 Finjan, Inc. v. Blue Coat Sys., Inc., No. 2016-2520, Dkt. No. 41 (filed Jan. 30, 2017) ....................................................................12 Finjan, Inc. v. Sophos, Inc., Case No. 14-cv-01197-WHO, 2016 U.S. Dist. Lexis 107831 (N.D. Cal. Aug. 15, 2016) .............................................................................................................................15, 16 Good Tech. Corp. v. Mobileiron, Inc., Case No. 5:12-cv-05826-PSG, 2015 WL 4090431 (N.D. Cal. July 5, 2015) ...........................13 Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) ....................................................................................................9, 10, 11 Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 347 F. Supp. 2d 114 (D. Del. 2004) .................................................................................. passim Hughes Aircraft Co. v. United States, 534 F.2d 889 (Ct. Cl. 1976) ......................................................................................................13 KW Plastics v. U.S. Can Co., 131 F. Supp. 2d 1289 (M.D. Ala. 2001) .............................................................................13, 15 Microsoft v. AT&T, 550 U.S. 437 (2007) ..................................................................................................................12 Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 3 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK iii 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 Open Text S.A. v. Box, Inc., Case No. 13-cv-04910-JD, 2015 U.S. Dist. LEXIS 11311 (N.D. Cal. Jan. 30, 2015) .........................................................................................................................................13 Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013) .................................................................................................15 Radware, Ltd. v. F5 Networks, Inc., Case No. 5:13-cv-02024-RMW, 2016 U.S. Dist. LEXIS 112504 (N.D. Cal. Aug. 22, 2016) ............................................................................................................................9 Roy-G-Biv Corp. v. ABB, Ltd., Case No. 6:11-cv-622, 2014 U.S. Dist. LEXIS 188699 (E.D. Tex. Aug. 1, 2014) .........................................................................................................................................13 Streck, Inc. v. Research & Diagnostic Sys., 665 F.3d 1269 (Fed. Cir. 2012) ...................................................................................................2 TecSec, Inc. v. IBM Corp., No. 10-cv-115, 2011 U.S. Dist. LEXIS 159356 (E.D. Va. Feb. 10, 2011) ...............................13 Texas Instruments, Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558 (Fed. Cir. 1996) ........................................................................................... passim Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) .................................................................................................14 Volterra Semiconductor Corp. v. Primarion, Inc., 799 F. Supp. 2d 1092 (N.D. Cal. 2011) ......................................................................................2 Statutes 28 U.S.C. § 1498 .............................................................................................................................13 Other Authorities Fed. R. Civ. P. 50(a)(1) .....................................................................................................................2 Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 4 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 1 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 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that at the Court’s earliest convenience, or as soon thereafter as the matter may be heard by the Honorable Beth Labson Freeman in Courtroom 3, United States District Court for the Northern District of California, Robert F. Peckham Federal Building, 280 South 1st Street, San Jose, CA 95113, Defendant Blue Coat shall and hereby does respectfully seek an order granting judgment as a matter of law. This motion is based on this notice of motion and supporting memorandum, the trial record, and such other written or oral argument as was presented and may be presented at or before the time this motion is taken under submission by the Court. RELIEF REQUESTED Blue Coat respectfully seeks an order granting it judgment as a matter of law on Finjan’s claims for relief. Dated: November 13, 2017 MORRISON & FOERSTER LLP By: /s/ Nathan B. Sabri Nathan B. Sabri Attorneys for Defendant BLUE COAT SYSTEMS LLC Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 5 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 2 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 I. LEGAL STANDARD Judgment as a matter of law is appropriate 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). Importantly for this motion, “conclusory expert assertions do not give rise to a genuine issue of material fact.” Streck, Inc. v. Research & Diagnostic Sys., 665 F.3d 1269, 1290-91 (Fed. Cir. 2012) (upholding district court’s grant of JMOL); see also Volterra Semiconductor Corp. v. Primarion, Inc., 799 F. Supp. 2d 1092, 1098 (N.D. Cal. 2011) (“When an expert opinion is not supported by sufficient facts to validate it in the eyes of the law, or when indisputable record facts contradict or otherwise render the opinion unreasonable, it cannot support a jury’s verdict.”) (quoting Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993)). II. BLUE COAT IS ENTITLED TO JUDGMENT OF NONINFRINGEMENT A. There Is No Evidence of Infringement of Claim 15 of the ’844 Patent. There is no evidence that Blue Coat (either literally or by equivalents) infringes claim 15 of the ’844 patent. Finjan is bound by the construction of “Downloadable security profile that identifies suspicious code in the received Downloadable” issued by the Court in this case. The Court’s construction defines the term as “a profile that identifies code in the received Downloadable that performs hostile or potentially hostile operations.” There is no evidence that GIN, or any of the systems included in GIN, generates a downloadable security profile. Finjan points to MAA reports, generated by customer- and Blue Coat-operated MAAs, as meeting this limitation. It is undisputed, however, that MAA reports contain lists of behaviors, and that identifying behaviors does not identify the code underlying the behaviors. (See, e.g., Trial Tr. (Cole) at 582:10-25.) Dr. Cole’s testimony to the contrary directly contradicts the court’s claim construction order in Blue Coat I, which the parties stipulated would govern this term. (Compare Finjan Inc. v. Blue Coat Sys., Inc., No. 13-03999 BLF, 2014 WL 5361976 (N.D. Cal. Oct. 20, 2014) (Blue Coat I Claim Construction Order); Dkt. No. 180 (Amended Joint Claim Construction and Pre- Hearing Statement Pursuant to Patent L.R. 4-3) (stating that Blue Coat I Claim Construction Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 6 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 3 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 governs), with Trial Tr. (Cole) at 527:2-7 (“Q. And once again, just to be clear, when you talk about suspicious operations, you’re also talking about suspicious code? A. Yes. Suspicious operations and suspicious code are both the same thing and it’s in the file and looking for what actions that code would take that could be harmful.”) (emphasis added); see also Dkt. No. 421 at 47 [Jury Instructions] (“As used in the [’844] patent, ‘code’ and ‘operations’ are not the same”).) Finjan relies solely on counterfactual and conclusory testimony from Dr. Cole that identifying operations is the same thing as identifying code. (See Trial Tr. (Nielson) at 1605:16-1608:8; 1611:6-16; 1616:17-18.) Dr. Nielson cited the specific code refuting Finjan’s allegations, and explained how the evidence cited by Finjan did not support the claim elements being met. (Id. at 1618:24-1628:8; PTX-1025 at 860, 3439-40.) Further, Finjan has provided no evidence establishing that GIN, or any accused Blue Coat product, performs the limitation of “linking the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients.” Rather, it is undisputed that content must already have been made available by a web server in order for the accused Blue Coat products to access the content and perform their analysis. (Trial Tr. (Sorgic) at 1446:1-7.) Dr. Cole’s testimony ignores this limitation and points only to the fact that GIN scans the downloadable before it reaches the client. This does not, however, have anything to do with when the web server makes a downloadable available to web clients in the plural, which is what the limitation concerns. Indeed, Dr. Cole only mentions a web server once, when he recites the claim language, making no attempt to explain how this part of the limitation is met. (Id. (Cole) at 517:15-518:2; see also id. at 533:7-25 (trying to explain the web server element without discussing a web server).) Dr. Nielson explained how Finjan’s arguments and testimony did not demonstrate that this claim element is met (Trial Tr. (Nielson) at 1608:9-1610:3; 1611:6- 1616:16; 1628:9-1630:5.) Finjan has failed to provide the jury with a legally sufficient basis for finding infringement under the doctrine of equivalents (“DoE”). The Federal Circuit has consistently held that a doctrine of equivalents argument “cannot merely be subsumed in plaintiff’s case of literal infringement,” and must be established by “particularized testimony and linking argument as to Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 7 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 4 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 the insubstantiality of the differences between the claimed invention and the accused device or process.” Texas Instruments, Inc. v. Cypress Semiconductor Corp., 90 F.3d 1558, 1566-68 (Fed. Cir. 1996) (upholding grant of JMOL regarding DoE where “overwhelming majority of [expert’s] testimony . . . was solicited for purposes of establishing literal infringement.”) On each of its doctrine of equivalents arguments, Finjan did not present and support doctrine of equivalents as a theory on its own merits—or even cite back to and incorporate by reference generally applicable technical background discussions. Instead, it presented its doctrine of equivalents theories as insufficiently supported “at the very least” fallbacks based on the literal infringement arguments. (See, e.g., Trial Tr. at 538:8-9 “So does GIN, at the very least, does GIN function in the same way as the second element of claim 15?”) An expert “cannot simply boot-strap his conclusions with respect to literal infringement and extend them to the infringement under the Doctrine of Equivalents.” Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 347 F. Supp. 2d 114, 119 n.21 (D. Del. 2004) (citing Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 1425 (Fed. Cir. 1989). Finjan’s expert provided only a conclusory argument that the second element of the ’844 patent was met under the function/way/result test. (Trial Tr. (Cole) at 537:14-539:9.) In making this argument, Dr. Cole repeated the same arguments he used for literal infringement. (See id. at 536:17-537:2.) Dr. Cole’s attempt to bootstrap his literal infringement conclusions into a DoE argument is legally insufficient, and would effectively vitiate the second element of the ’844 patent if allowed. Honeywell Int’l Inc., 347 F. Supp. 2d at 119 n.21; Texas Instruments, 90 F.3d at 1566-68. The only non-conclusory testimony on this issue confirms that the accused product features are not equivalent to the missing claim elements. (Trial Tr. (Nielson) at 1626:12- 1630:5.) B. There Is No Evidence of Infringement of Claim 1 of the ’968 Patent. There is no evidence that Blue Coat (either literally or by equivalents) infringes claim 1 of the ’968 patent. Finjan is bound by the construction of “policy index” issued by the Court in this case. The Court’s construction defines “policy index” as “a data structure indicating allowability of cached content relative to a plurality of policies.” The first and third limitations of this claim Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 8 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 5 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 require storage of an allowability decision—“a memory storing . . . a policy index to the cache contents . . . for each of a plurality of policies” and “a content evaluator . . . for determining whether a given digital content is allowable . . the results of which are saved as entries in the policy index.” Finjan has produced no evidence that ASG coupled with MAA contains a policy index that meets these elements. Finjan asserts that the policy ticket generated by the ProxySG component of ASG satisfies this claim limitation. It is undisputed, however, that as soon as ProxySG makes an allowability determination, the policy ticket is discarded. (Id. (Sorgic) at 1436:6-1439:19.) It is further undisputed that a policy ticket only relates to a single policy, not a plurality of policies. (Id.) Finjan’s expert confirmed on cross examination that a second ProxySG user, who could be subject to a different policy, would need a brand new policy ticket. (Id. (Mitzenmacher) at 837:2-838-7, 847:16-22.) Because of this, the first and third limitations of the claim, which require storage of an allowability decision, are not met. (See Trial Tr. (Nielson) at 1673:2-1684:23; PTX1025 at 4515-4516, 4155.) As discussed above, Finjan also failed to provide the jury with a legally sufficient basis for finding infringement under the doctrine of equivalents (“DoE”). Finjan’s expert provided a conclusory argument that the “policy index” limitation was met under the function/way/result test. (Trial Tr. (Mitzenmacher) at 760:19-762:13.) In making this argument, Dr. Mitzenmacher repeated the same arguments he used for literal infringement. (See id. at 759:18-760:20.) Dr. Mitzenmacher’s attempt to bootstrap his literal infringement conclusions into a DoE argument is legally insufficient, and would effectively vitiate the “policy index” limitation of the ’968 patent if allowed. Honeywell Int’l Inc., 347 F. Supp. 2d at 119 n.21; Texas Instruments, 90 F.3d at 1566-68. The only non-conclusory testimony on this issue confirms that the accused product features are not equivalent to the missing claim elements. (Trial Tr. (Nielson) at 1683:22- 1684:23.) C. There is No Evidence of Infringement of Claim 1 of the ’731 Patent. There is no evidence that Blue Coat (either literally or by equivalents) infringes claim 1 of the ’731 patent. The final element of claim 1 requires “a security policy cache for storing security policies…” Finjan has produced no evidence that ASG with MAA contains a security policy Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 9 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 6 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 cache. Finjan alleges that ProxySG’s storage of a policy file satisfies this limitation, but presents no evidence that the policy file is stored in a cache. Finjan alleges that ProxySG’s policy file is stored in persistent storage and volatile memory, but does not explain how this qualifies as a cache. (Trial Tr. (Mitzenmacher) at 730:9-25.) This missing element is especially glaring given that Finjan has explicitly pointed out the existence of a “file cache” and “security profile cache” (separate limitations of the claim), which indicates that Finjan is capable of explicitly identifying caches, and has simply failed to identify a security policy cache. (Trial Tr. (Nielson) at 1647:21- 1653:5; 1653:23-1654:6; id. at (Sorgic) at 1445:9-23.) Finjan has also failed to provide the jury with a legally sufficient basis for finding infringement under the doctrine of equivalents (“DoE”). Finjan’s expert provided a conclusory argument that the first element of the claim was met under the function/way/result test. (Trial Tr. (Mitzenmacher) at 735:14-738:9.) In making this argument, Dr. Mitzenmacher repeated the same argument he used for literal infringement. (See id. at 734:5-735:13.) Dr. Mitzenmacher’s attempt to bootstrap his literal infringement conclusions into a DoE argument is legally insufficient, and would effectively vitiate the first element of the ’731 patent if allowed. Honeywell Int’l Inc., 347 F. Supp. 2d at 119 n.21; Texas Instruments, 90 F.3d at 1566-68. The only non-conclusory testimony on this issue confirms that the accused product features are not equivalent to the missing claim elements. (Trial Tr. (Nielson) at 1653:6-1654:6.) D. There is No Evidence of Infringement of Claim 22 of the ’408 Patent. There is no evidence that Blue Coat infringes claim 22 of the ’408 patent. In particular, Finjan has produced no evidence that any accused product “dynamically builds” a parse tree as required by the claim. Finjan accuses the DRTR component of the WSS with GIN/WebPulse combination, but provides no evidence that DRTR “dynamically builds” a parse tree, because DRTR does not build a parse tree while an incoming stream is being received. Instead, it is undisputed that DRTR downloads all of the content to be analyzed, severs the connection, and then analyzes the content. (Trial Tr. (Mitzenmacher) at 875:4-15 (DRTR is the receiving element); id. at 877:2-878:4 (DRTR does not scan content until it has been downloaded).) Finjan’s argument that the accused parse tree (the pContext structure) is built before the client Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 10 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 7 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 has received any content to be analyzed or “parsed” is similarly unavailing, because that also fails to establish the building of a parse tree during the receiving. (Trial Tr. (Nielson) at 1658:8- 1659:5; 1660:11-1666:22; 1670:22-5; PTX1025 at 106.) In addition, Finjan has presented no evidence that any accused product utilizes a parse tree at all, construed by the Court as “a hierarchical structure of interconnected nodes built from scanned content.” Finjan argues that a pContext structure is the relevant parse tree. This fails, however, because Finjan has not shown any evidence that pContext’s nodes are “tokens being lexical constructs” or “combinations of tokens and patterns,” as required by the third claim element. (See Trial Tr. (Nielson) at 1659:6-1660:10; 1660:11-1663:10; 1666:23-1669:20; 1670:6-8.) E. There is No Evidence of Infringement of Claim 10 of the ’494 Patent. There is no evidence that Blue Coat (either literally or by equivalents) infringes claim 10 of U.S. Patent No. 8,677,494 (“the ’494 patent.”) Finjan accuses the Yara rules functionality within GIN, particularly the Yara rule hits stored in Cookie2 and subsequently stored in SeeMore, as meeting the “deriving security profile data for the Downloadable, including a list of suspicious computer operations” limitation of claim 10. It is undisputed, however, that the Yara rule hits stored in Cookie2, and SeeMore, list nothing more than the number of Yara rule hits and the abbreviated names of the Yara rules that hit. (Trial Tr. (Cole) at 593:23-595:24; JTX-3060.) Finjan’s expert contradicted the explicit claim language by suggesting that the security profile data stored in the claimed database did not need to include the list of suspicious computer operations. (Id. at 604:22-605:6.) Finjan has produced no evidence establishing that a Yara rule corresponds to suspicious computer operations such that a list of abbreviated Yara rule names could correspond to a list of suspicious computer operations. (See Trial Tr. (Nielson) at 1590:11- 1601:14, 1605:4-12.) As discussed above, Finjan failed to provide the jury with a legally sufficient basis for finding infringement under the doctrine of equivalents (“DoE”). Finjan’s expert provided a conclusory argument that the second element of the claim was met under the function/way/result test. (Trial Tr. (Cole) at 552:18-554:10.) In making this argument, Dr. Cole repeated the same Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 11 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 8 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 argument he used for literal infringement. (See id. at 552:7-17.) Dr. Cole’s attempt to bootstrap his literal infringement conclusions into a DoE argument is legally insufficient, and would effectively vitiate the second element of the ’494 patent if allowed. Honeywell Int’l Inc., 347 F. Supp. 2d at 119 n.21; Texas Instruments, 90 F.3d at 1566-68. The only non-conclusory testimony on this issue confirms that the accused product features are not equivalent to the missing claim elements. (Trial Tr. (Nielson) at 1601:15-1604:8.) F. There is No Evidence of Infringement of Claims 1 or 10 of the ’621 Patent. There is no evidence that Blue Coat (either literally or by equivalents) infringes claims 1 or 10 of the ’621 patent. Both claims require “an interrupter for interrupting processing of the request.” Finjan alleges that MAA’s “hooking” of certain operations satisfies this limitation. The record is clear that hooking merely allows MAA to monitor the operation as it continues to run. (Trial Tr. (Medvidovic) at 1010:1-1018:2.) From the prior limitation in claim 1, which separately requires monitoring, it is clear that monitoring and interrupting cannot be the same thing. (See Trial Tr. (Nielson) at 1632:23-1634:6; 1635:3-1640:11; PTX1025 at 3439-3440; CAE Screenplates, Inc. v. Heinrich Fiedler Gmbh & Co. Kg, 224 F.3d 1308, 1317 (Fed. Cir. 2000) (“In the absence of any evidence to the contrary, we must presume that the use of these different terms in the claims connotes different meanings.”).) Further, both claims require a “comparator . . . for comparing information pertaining to the downloadable against a predetermined security policy.” Finjan has provided no evidence that MAA contains any such comparator. The evidence shows that MAA lets a file run, monitors the file, and then, well after runtime, compares what it observes to a list of patterns.. (Trial. Tr. (Medvidovic) at 1018:19-1027:3.) Finjan has not established that creating a list of observed patterns after runtime is the same as comparing information against a predetermined security policy by a comparator that is coupled to operating system probes. Moreover, the accused MAA pattern matching engine only uses stored events, previously gathered during file execution, to compare against existing patterns. It has no access to runtime monitoring or operating system probes, and therefore cannot be “coupled to” said probes. (Trial Tr. (Nielson) at 1634:7-21; 1640:12-1647:16; PTX1025 at 3521-3522, 3853-3854.) Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 12 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 9 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 As discussed above, Finjan failed to provide the jury with a legally sufficient basis for finding infringement under the doctrine of equivalents (“DoE”). Finjan’s expert provided a conclusory argument that the “interruptor” limitation of the claims was met under the function/way/result test. (Trial Tr. (Medvidovic) at 1050:9-1051:23.) In making this argument, Dr. Medvidovic explicitly stated that “that’s literally what interruption means” when discussing how DoE applies. (Id.) Dr. Medvidovic’s attempt to bootstrap his literal infringement conclusions into a DoE argument is legally insufficient, and would effectively vitiate the “interruptor” limitation of the ’621 patent if allowed. Honeywell Int’l Inc., 347 F. Supp. 2d at 119 n.21; Texas Instruments, 90 F.3d at 1566-68. The only non-conclusory testimony on this issue confirms that the accused product features are not equivalent to the missing claim elements. (Trial Tr. (Nielson) at 1640:2-11; 1647:6-16.) III. BLUE COAT IS ENTITLED TO JUDGMENT OF NO WILLFUL INFRINGEMENT. To prove willful infringement, Finjan must show that Blue Coat’s behavior was egregious, such as where the infringement is malicious, deliberate, consciously wrongful, or done in bad faith. See Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932-33 (2016). Only the accused infringer’s subjective willfulness, intentional or knowing—not objective willfulness—is relevant. Halo Elecs., Inc., 136 S. Ct. at 1933. There is insufficient evidence for a reasonable jury to find that Blue Coat has willfully infringed the asserted claims. Finjan put forth no evidence of willfulness on a particularized basis, and made only general allegations as to all patents. Finjan never identified when Blue Coat had knowledge as to each of the asserted patents, and never identified specific acts constituting willful infringement on a per patent basis. Finjan also did not provide Blue Coat notice prior to the filing of the complaints. Finjan’s primary argument that Blue Coat continued to sell products after the verdict in Blue Coat I without designing around is unavailing at least because that verdict occurred after the filing of the second complaint. Radware, Ltd. v. F5 Networks, Inc., Case No. 5:13-cv-02024- RMW, 2016 U.S. Dist. LEXIS 112504 at*20-21 (N.D. Cal. Aug. 22, 2016) (noting that “post- complaint conduct is of limited relevance” and that Halo did not change this principle) (citing Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 13 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 10 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 EON Corp. IP Holdings, LLC v. Sensus USA, Inc., 2012 U.S. Dist. LEXIS 141965 (N.D. Cal. Oct. 1, 2012); Monolithic Power Systems, Inc. v. Silergy Corp., 127 F. Supp. 3d 1071 (N.D. Cal. 2015)). Moreover, mere knowledge of the asserted patents is mandatory but insufficient for a finding of willfulness. Erfindergemeinschaft UroPep Gbr v. Eli Lilly & Co., Case No. 2:15-CV- 1202-WCB, 2017 U.S. Dist. LEXIS 75517 at *6-7 (E.D. Tex. May 18, 2017) (“it is circumstance that transforms simple knowledge into such egregious behavior, and that makes all the difference”) (quoting Halo Elecs, 136 S. Ct. at 1936 (Breyer, J., concurring)). Prior to the current complaint, Blue Coat knew only of the three overlapping patents that were at issue in Blue Coat I. That alone is insufficient to establish willfulness as to the three overlapping patents, but shows even more strongly that there is no willful infringement with respect to the three patents that do not overlap with Blue Coat I. Finjan has no evidence that Blue Coat acted inconsistently with standards of behavior for its industry, or that Blue Coat was unreasonable in believing it did not infringe or that Blue Coat’s activities were covered by the Blue Coat I verdict. The fact that the Court did not grant summary judgment on Finjan’s infringement claim as to the ’494 patent, and that Finjan did not even seek summary judgment as to infringement for the remaining asserted patents shows that Blue Coat’s noninfringement defenses are reasonable. (Dkt. No. 276; Adrea v. Barnes & Noble, Inc., 227 F. Supp. 3d 303, 312 (S.D.N.Y. 2017) (noting that one post-Halo willfulness factor is “whether or not there is a reasonable basis to believe that defendants did not infringe or had a reasonable defense to infringement” (citing WesternGeco L.L.C. v. ION Geophysical Corp., 837 F.3d 1358 (Fed. Cir. 2016); Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314 (Fed. Cir. 2009).) Blue Coat’s reasonable belief regarding non-infringement is further bolstered by the fact that Finjan made the same generalized willfulness allegation for all the patents originally at issue in this suit, yet the Court found that Blue Coat does not infringe two of those patents on summary judgment. (Dkt. No. 276.) It is undisputed that Blue Coat I is on appeal, and Finjan has no response to the evidence that Blue Coat thought that the Blue Coat I verdict either gave it a right to use all the accused Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 14 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 11 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 products or that the verdict was going to be overturned, and that anything not already covered by the Blue Coat I verdict was therefore new and not technology found to infringe. (Trial Tr. (Schoenfeld) at 1404:22-1405:4; 1406:7-1408:7.) Mr. Schoenfeld’s testimony confirms that the accused products were developed before the Blue Coat I verdict. (Id. at 1409:6-18; 1421:5-22.) Dr. Cole’s expert vouching regarding the reasonableness of Blue Coat’s conduct after the Blue Coat I verdict should not be credited. His conclusory claim that a company’s only two options when it is “aware on an infringement claim” are to take a license or change its products (Trial Tr. (Cole) at 562:6-11.) is contrary to well-established legal principles permitting accused infringers to defend against infringement claims without an automatic finding of willfulness. Adrea, 227 F. Supp. 3d at 312. Finjan, as the Court has previously noted, has no evidence that Blue Coat copied any product covered by any asserted patent. Nor is there any evidence of a “cover up.” To the contrary, Finjan’s evidence regarding Blue Coat’s competitive analysis of Finjan’s products shows standard industry practice that cannot establish willfulness. As the Court has noted multiple times, competitive analysis is not unlawful. (See Dkt. No. 381 at 8 (noting that “acquisition and testing of [Finjan technology] seems largely focused on comparing features and performance to see which is more desirable for customers,” and that this “‘seem[s] consistent with regular, competitive behavior.”); see also Blue Coat I, Dkt. No. 543 at 27 (“[i]n any competitive industry, businesses monitor and discuss their competitors”).) Given the above, no reasonable jury could classify Blue Coat’s conduct as rising to the level of a “wanton and malicious pirate.” Halo Elecs., 136 S. Ct. at 1928. IV. BLUE COAT IS ENTITLED TO JUDGMENT OF NO DAMAGES. A. Blue Coat is Entitled to Judgment as a Matter of Law Regarding Foreign Users Finjan seeks damages on worldwide users of GIN. (Trial Tr. (Meyer) at 1258:10-12.) Finjan has provided no evidence that non-domestic GIN users purchase and operate versions of the accused products that were made in the United States. Finjan’s evidence establishes that the software component in GIN is developed in the Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 15 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 12 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 United States. (See, e.g. Trial Tr. (Cole) at 536:7-10.) Finjan has provided no evidence, however, that GIN’s software is combined with the hardware necessary to practice the claimed inventions within the United States. The only evidence presented to the jury establishes the opposite – that foreign GIN users use hardware and software combinations that are assembled in the Netherlands and subsequently access foreign data centers for communication with GIN. (See, e.g. Trial Tr. (Schoenfeld) at 1390:17- 1401:14; JTX-3062.) To establish liability, and thus damages, for its foreign users, Finjan must prove that a fully assembled hardware and software combination that meets every limitation of the asserted claims is first made in the United States. Microsoft v. AT&T, 550 U.S. 437 (2007); Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972). This combination of hardware and software is necessary because otherwise, as Finjan has acknowledged in its appellate briefing, Finjan’s patents would be directed to disembodied and unpatentable software. (See Response Brief for Plaintiff-Appellee Finjan, Inc., Finjan, Inc. v. Blue Coat Sys., Inc., No. 2016-2520, Dkt. No. 41 at 19 (filed Jan. 30, 2017) (“The very first element of Claim 1 [of the ’844 patent]—‘receiving by an inspector a Downloadable’—is defining a system based on an ‘inspector’ as a component of the claimed computer network system, including, among other components, a content inspection engine, a processor, an input device, an output device and internal storage, each of which are coupled to a signal bus.”) (emphasis added) ; id. at 25 (“Independent Claim 15 adds specific and concrete components within an ‘inspector system,’ including a separate ‘memory storing a first rule set’ to be used by a ‘content inspection engine . . . to generate a first Downloadable security profile.”) (emphasis added).) Finjan has not established that the accused infringing hardware and software combinations are made in the United States. Instead, it has merely established that a component of the accused products – the software – is compiled in the United States and shipped abroad for replication and combination with the remaining components. This does not establish infringement under § 271(a). Finjan has additionally provided no evidence that it is entitled to damages for worldwide users of FRS, because, assuming MAA is considered to be made where its source code is Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 16 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 13 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 compiled, MAA is undisputedly made in Norway. (Trial Tr. (Rohan) at 1469:8-16.) B. Blue Coat Is Entitled to Judgment as a Matter of Law Regarding Government Sales Blue Coat presented unrebutted evidence that a portion of its sales were made to the U.S. Government. (Trial Tr. (Dildine) at 1568:18-1577:7; JTX-3070; DTX 2095; Trial Tr. (Thomas) at 1839:3-23.) This unrebutted evidence also shows that the U.S. Government used and benefited from Blue Coat’s products. (Id; see also id. (Schoenfeld) at 1402:13-1404:5.) As a matter of law, Blue Coat cannot be held liable for these sales. 28 U.S.C. § 1498; Open Text S.A. v. Box, Inc., Case No. 13-cv-04910-JD, 2015 U.S. Dist. LEXIS 11311 at *6-7 (N.D. Cal. Jan. 30, 2015); TecSec, Inc. v. IBM Corp., No. 10-cv-115, 2011 U.S. Dist. LEXIS 159356 at *6-10 (E.D. Va. Feb. 10, 2011); Hughes Aircraft Co. v. United States, 534 F.2d 889, 897-98 (Ct. Cl. 1976). C. Blue Coat is Entitled to Judgment as a Matter of Law on Reasonable Royalties There is no evidence to support an award of a reasonable royalty. Finjan failed to provide any evidence allowing calculation of a damages amount that is non-speculative or based on any amount of reasonable certainty, as required under the law. Dr. Meyer’s revenue-based theory relies upon a flawed feature analysis. Dr. Medvidovic arbitrarily assigns features to the accused products, assigns equal value to all of the features, uses a “related to” test that is arbitrary, and assigns full value for any feature “related to” a claim. (See Dr. Meyer’s Original Report at Ex. 6 (identifying ProxySG as having 10 features, and CAS as having 8 features, then assigning WSS 27 features and ASG 6 features despite both being a combination of ProxySG and CAS); Trial Tr. (Medvidovic) at 1074:23-1076:24; 1078:10-1080:7; 1082:23-1086:4; KW Plastics v. U.S. Can Co., 131 F. Supp. 2d 1289, 1293 (M.D. Ala. 2001); Good Tech. Corp. v. Mobileiron, Inc., Case No. 5:12-cv-05826-PSG, 2015 WL 4090431, *5 (N.D. Cal. July 5, 2015); Roy-G-Biv Corp. v. ABB, Ltd., Case No. 6:11-cv-622, 2014 U.S. Dist. LEXIS 188699 at *11 (E.D. Tex. Aug. 1, 2014). Dr. Meyer’s royalty rate of 16% for software is unreliable and based on the rate that Finjan “go[es] in with” when it starts negotiations. (Trial Tr. (Meyer) at 1226:16-23; id. (Thomas) Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 17 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 14 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 1829:25-1830:14.) This is a legally impermissible rule of thumb. Biscotti Inc. v. Microsoft Corp., Case No. 2:13-CV-01015-JRG-RSP, 2017 U.S. Dist. LEXIS 93166 at *13-16 (E.D. Tex. May 18, 2017) (relying on Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011).) None of the evidence relied on by Dr. Meyer supports a 16% royalty. Dr. Meyer admitted there is no established royalty rate and the settlement agreements do not identify a 16% royalty rate. (Trial Tr. (Meyer) at 1284:4-1285:25; id. (Thomas) at 1821:19-22.) Similarly, the verdicts relied upon are not probative as they fail to establish a 16% royalty rate, are based on an impermissible rule of thumb, are prejudicial to Blue Coat, and should be disregarded. Biscotti Inc. v. Microsoft Corp., 2017 U.S. Dist. LEXIS 93166 at *13-16 (E.D. Tex. May 18, 2017) (relying on Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011). There is also no support for the $8 per user fee. It merely reflects Finjan’s view of the world. (Trial Tr. (Thomas) at 1860:19-1861:6.) It is purportedly based upon applying the 16% royalty to the average price for software for a two and a half year subscription fee. (Trial Tr. (Meyer) at 1316:24-1322:23.) In addition to being based on an unsupported 16%, Dr. Meyer did nothing to verify the reasonableness of the software prices or terms. (Id.; id. (Thomas) at 1850:25-1851:14.) It is further divorced from the facts of this case. For example, the two and a half year term is longer than the damages period for at least the ’621 patent. (Trial Tr. (Meyer) at 1316:24-1322:23; id. (Thomas) at 1863:25-1864:6.)) Moreover, in her testimony, Dr. Meyer disclaimed that the $8 per user fee for the FRS “reasonableness check” was based on the Blue Coat I verdict. As set forth in Blue Coat’s Daubert Motion, Dkt. No. 294, as this $8 per user fee is based exclusively on Finjan’s view of the world and not Dr. Meyer’s opinion of a reasonable royalty, it is unreliable. (Dkt. No. 294 at *6-7.) Finally, both Dr. Meyer and Mr. Thomas agree that software licenses and patent licenses are distinct, making Dr. Meyer’s reliance on software licenses inappropriate. (Trial Tr. (Meyer) at 1320:19-21; id. (Thomas) at 1862:13-15.) Dr. Meyer’s user-based FRS “reasonableness check” is further unreasonable because it resulted in the value of FRS being worth more than 169 times more in her reasonableness check than it was worth in her revenue model. (Trial Tr. (Thomas) at 1866:16-1869:5.) Such an internally inconsistent analysis shows that “the court cannot find with and degree of certainty that Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 18 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 15 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 [the] expert applied sound economic principles in a reliable way.” KW Plastics v. U.S. Can Co., 131 F. Supp. 2d 1289, 1293 (M.D. Ala. 2001). Dr. Meyer also bases her FRS reasonableness check on 175 million worldwide users. The record makes it clear that the 175 million user figure inappropriately counts Symantec users, who are distinct from Blue Coat users. (Trial Tr. (Schoenfeld) at 1391:13-1392:7; PTX-526.) Moreover, Dr. Meyer’s FRS reasonableness check is completely divorced from Finjan’s underlying infringement theory, because FRS is not a necessary component of any of Finjan’s infringement allegations. (Id. (Nielson) at 1610:2- 1611:5; id. (Thomas) at 1904:13-1905:20.)) Both of Dr. Meyer’s reasonableness checks improperly include worldwide sales, as set forth above. Finjan failed to present any evidence linking worldwide users of GIN/WebPulse to infringing apparatuses that were made in the United States. Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1371 (Fed. Cir. 2013) (“It is axiomatic that U.S. patent law does not operate extraterritorially to prohibit infringement abroad.”). Dr. Meyer’s user-based DRTR reasonableness check is factually unsupported because Finjan has introduced no evidence that the 2.7% increase in WebPulse/GIN traffic routed to DRTR since Blue Coat I is attributable to new WebPulse/GIN features. (Dkt. No. 381 at 4 (“Dr. Meyer will be permitted to present her per-user damages theory at trial, provided she reduce the 6.7% ratio to 2.7%”); Oct. 25, 2017, Pretrial Conference at 107:6-8 (“I do need to be sure that the increased traffic was related to what you called the new or improved features.”).) Dr. Meyer has impermissibly double counted damages because she sets forth two reasonableness checks that, under her revenue-based methodology, are directed to patents with completely overlapping features. (Trial Tr. (Thomas) at 1852:18-23.) Dr. Meyer testified that the DRTR reasonableness check is relevant to the ’494 patent and the FRS reasonableness check is relevant to the ’844 and ’621 patents. (Trial Tr. (Meyer) at 1319:22-1343:6.) The ’844 and ’494 patent have identical features and their inventions are completely overlapping. (Trial Tr. (Meyer) at 1294:13-20 (“Q. So why don’t you look at this footnote and see for me if you can find any features that are identified for the ’621 and ’844 patents that are not also identified for the ’494 patent? A. I think that’s right. I don’t think there are any. That’s correct.”); Finjan, Inc. v. Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 19 of 20 BLUE COAT’S RULE 50(A) MOTION 15-cv-03295-BLF-SVK 16 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 Sophos, Inc., Case No. 14-cv-01197-WHO, 2016 U.S. Dist. Lexis 107831, at *11-12 (N.D. Cal. Aug. 15, 2016) (stating with respect to the ’844 and ’494 patents that it is “not possible, as a matter of law and logic” that Finjan is entitled to recover more than 100% of the value of the accused product features). The features of the ’621 patent are subsumed by the features of the ’494 and ’844 patents. (Trial Tr. (Meyer) at 1294:13-20; Id. (Thomas) at 1852:18-23.) The unreasonableness of Dr. Meyer’s “reasonableness checks” is further demonstrated by comparing them to her original and recently abandoned revenue theory, under which the ’844, ’494, ’621, and ’408 patents were fully addressed and assessed a drastically lower total damages figure. (Trial Tr. (Meyer) at 1319:22-1343:6.) Finally, testimony has shown that the products or product features accused in this case are identical to products or features for which damages were awarded in the Blue Coat I verdict. (See, e.g., Trial Tr. (Schoenfeld) at 1409:6-23 (ASG is same as ProxySG and CAS); Id. (Larsen) at 1551:2-1552:3 (Yara rules are part of DRTR that has not changed DRTR’s core functionality); id. (Schoenfeld) at 1381:7-1382:7 (MAA provides sandboxing functionality that has not changed since Blue Coat I).). Finjan is not entitled to recover again where it already recovered damages in Blue Coat I. Finjan, Inc. v. Sophos, Inc., 2016 U.S. Dist. Lexis 107831, at *11-12. V. CONCLUSION For the foregoing reasons, Blue Coat’s motion should be granted. Dated: November 14, 2017 MORRISON & FOERSTER LLP By: /s/ Nathan B. Sabri Nathan B. Sabri Attorneys for Defendant BLUE COAT SYSTEMS LLC Case 5:15-cv-03295-BLF Document 424 Filed 11/14/17 Page 20 of 20