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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

 DUANE MORRIS LLP

Nicole E. Grigg (CA SBN 307733) 

negrigg@duanemorris.com 

D. Stuart Bartow (CA SBN 233107) 

dsbartow@duanemorris.com 

2475 Hanover Street 

Palo Alto, CA 94304-1194 

Telephone: 650.847.4146 

Facsimile: 650.847.4151 

DUANE MORRIS LLP 

Joseph A. Powers (PA SBN 84590) 

Admitted Pro Hac Vice 

japowers@duanemorris.com 

Jarrad M. Gunther (PA SBN 207038) 

Admitted Pro Hac Vice 

jmgunther@duanemorris.com 

30 South 17th Street 

Philadelphia, PA 19103 

Telephone: 215.979.1000 

Facsimile: 215.979.1020 

Attorneys for Defendant 

CISCO SYSTEMS, INC. 

DUANE MORRIS LLP 

L. Norwood Jameson (GA SBN 003970) 

Admitted Pro Hac Vice

wjameson@duanemorris.com 

Matthew C. Gaudet (GA SBN 287789) 

Admitted Pro Hac Vice

mcgaudet@duanemorris.com 

David C. Dotson (GA SBN 138040) 

Admitted Pro Hac Vice 

dcdotson@duanemorris.com 

John R. Gibson (GA SBN 454507) 

Admitted Pro Hac Vice

jrgibson@duanemorris.com 

Jennifer H. Forte (GA SBN 940650) 

Admitted Pro Hac Vice

jhforte@duanemorris.com 

1075 Peachtree NE, Suite 2000 

Atlanta, GA 30309 

Telephone: 404.253.6900 

Facsimile: 404.253.6901 

IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION

FINJAN, INC., a Delaware Corporation, 

Plaintiff, 

v. 

CISCO SYSTEMS, INC., a California 

Corporation, 

Defendant. 

Case No.: 5:17-cv-00072-BLF-SVK 

CISCO SYSTEMS, INC.’S REPLY IN 

SUPPORT OF ITS MOTION FOR LEAVE 

TO SUPPLEMENT STEPHEN L. 

BECKER’S EXPERT REPORT ON 

DAMAGES 

Date: September 17, 2020 

Time: 9:00 a.m. 

Courtroom: 3, 5th Floor 

Judge: Hon. Beth Labson Freeman 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 1 of 7
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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

Finjan does not dispute that Cisco acted diligently in seeking to supplement Dr. Becker’s 

report with the newly created documents and information related to the Acquisition. Nor does 

Finjan dispute that it was aware of these facts long before they were made public and discovered by 

Cisco. Instead, Finjan’s Opposition is based on its desire to prevent the jury from hearing facts that 

undermine Finjan’s claim for damages. Finjan argues that the Acquisition is irrelevant and 

inadmissible because: (1) the “nature” of the Acquisition “as an acquisition of a patent owner and its 

lawsuits” and the fact that some patents expired; (2) the “financial landscape” at the time of the 

Acquisition due to the COVID-19 pandemic; and (3) the fact Dr. Becker does not change his 

affirmative opinion as a result of the Acquisition. At best, each of these arguments goes to the 

weight, not the admissibility, of the information in Dr. Becker’s supplementation, which can be 

explored through cross-examination. Moreover, in its attempt to convince the Court that the 

Acquisition is irrelevant to damages in this case, Finjan contradicts the positions it took when 

advocating for the admission of the settlement agreements and post-grant proceedings that it deems 

helpful to its damages case. Indeed, the arguments in Finjan’s Opposition would equally bar the 

very evidence on which Finjan’s damages claim is based, which Finjan’s damages expert relies on 

under the “book of wisdom.” Dr. Becker’s supplement provides the complete picture that rebuts 

Finjan’s damages expert. Just as the jury will hear about litigation-influenced license agreements 

and the non-institution of IPRs as part of Finjan’s damages claim – both of which occurred many 

years after the hypothetical negotiation – it must also hear the effective purchase price of Finjan’s 

patents (including the patents-in-suit) that necessarily include all of the rights that would have been 

conveyed at the hypothetical negotiation (plus many more). 

I. FINJAN’S ARGUMENTS GO ONLY TO THE WEIGHT OF THE EVIDENCE 

A. The Acquisition’s Nature and Inclusion of Expired Patents Go To Weight 

First, Finjan argues that the “nature” of the Acquisition “as an acquisition of a patent owner 

and its ongoing litigations demonstrates that it is not relevant to the hypothetical negotiation.” Opp. 

at 3. Cisco’s opening brief cited several cases finding that the sale or valuation of the plaintiff 

and/or the patents years after the hypothetical negotiation is relevant to the damages analysis. See, 

e.g., Spectralytics, Inc. v. Cordis Corp., 650 F. Supp. 2d 900, 914 (D. Minn. 2009), aff'd in part, 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 2 of 7
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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

vacated in part, 649 F.3d 1336 (Fed. Cir. 2011); Comcast Cable Commc’ns, LLC v. Sprint 

Commc’ns Co., LP, 262 F. Supp. 3d 118, 144-146 (E.D. Pa. 2017); Pers. Audio, LLC v. Apple, Inc., 

No. 9:09CV111, 2011 U.S. Dist. LEXIS 83746, 2011 WL 3269330, at *10 (E.D. Tex. 7/29/11); 

Oracle Am., Inc. v. Google Inc., 2012 WL 877125, at *3 (N.D. Cal. 3/15/12); (citing Lucent Techs., 

Inc. v. Gateway, Inc., 580 F.3d 1301, 1333–34 (2009)). Finjan ignores these cases. 

Instead, Finjan cites two District of Delaware cases, United Access Techs., LLC v. AT&T 

Corp., 2020 WL 3128269 (D. Del. 6/12/20) (“UAT”) and In re ChanBond LLC, 2020 WL 550786 

(D. Del. 2/4/20). UAT relates to whether discovery into the funder of litigation is appropriate; it does 

not address the admissibility of the acquisition price of an entity or its patent portfolio. The facts of 

that litigation confirm the distinction between the question of litigation funding versus the relevance 

of an acquisition event. Some of the undersigned counsel is quite familiar with that litigation based 

on their representation of the CenturyLink defendants (CenturyTel and Qwest) in a consolidated 

UAT case. There actually was an acquisition event in that litigation (namely, a predecessor sold all 

of its patents to the plaintiff after they had expired), both the AT&T and CenturyLink defendants 

referenced it in their damages reports (and AT&T relied on it), but plaintiff (UAT) did not even file 

a damages Daubert motion. Gaudet Decl., ¶¶ 2, 3. In sum, the UAT case supports Cisco, not Finjan. 

Likewise, In re: ChanBond (which also relates to a litigation funder) does not support Finjan. 

Although Finjan cites the case for the proposition that the acquisition of a patent holder can never be 

relevant to the hypothetical negotiation, the Court actually distinguished between (i) anything that is 

litigation/settlement-related (whether a specific settlement agreement or an agreement to buy a 

holding company whose only assets are the patents and a potential recovery from ongoing litigation) 

versus (ii) licensing transactions with no litigation history or settlement overtone. ChanBond, at *6. 

The Court found that a licensing transaction is preferred over the litigation/settlement-related 

transaction, as the latter is not as comparable to the hypothetical negotiation. Id. In this case, 

however, both damages experts are already relying on settlement agreements, and thus the 

ChanBond approach that litigation/settlement-related agreements are automatically out does not 

work. Further, this Court has already taken a broad view of relevance to the hypothetical negotiation 

via the “book of wisdom,” including post-grant review proceedings and litigation-induced licenses. 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 3 of 7
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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

Dkt. 640 at 15, 18. Although Finjan argues that the Acquisition agreement “included considerations 

well-beyond the existence of the patents-in-suit,” the same is true of the settlement agreements 

(which are litigation-induced portfolio-wide licenses) that both experts are relying on, and Dr. 

Becker’s analysis takes all of these facts into account. 

Moreover, there is a supposition in the ChanBond Court’s analysis that is untrue in this case. 

Namely, that the transaction “is an agreement between two parties who want to be on one side of 

that transaction, that of the licensor.” ChanBond, at *6. Here, the Acquisition was a market auction 

in which anyone could participate – entities that wanted to be a licensor and had no intention of 

practicing the patent or entities whose primary motivation was to be a licensee (as they would have 

something equivalent to an exclusive license). Dkt. 683-9 at Item 4. Among that entire pool, the 

maximum value was a reflection of what anyone – including potential licensee entities – would pay. 

Second, Finjan argues that the Acquisition is irrelevant to a reasonable royalty because “four 

out of five of the patents-in-suit expired between the date of the hypothetical negotiation and the 

[Acquisition].” Opp. at 3. This is a red-herring. It is evident from the public documents that the 

Acquisition conveyed the rights to enforce all of Finjan’s patents (including the expired patents) and 

to collect past and future damages, and the Acquisition price reflects the value attributed to those 

rights. In other words, the Acquisition included all rights that Finjan is asserting against Cisco, and 

these are the same rights the jury will be asked to value at trial. Moreover, if the expiration of 

patents extinguished their relevance, then there would be no trial in this case on 4 of the 5 patents. 

Of course, expiration does not mean irrelevance; rights still exist, including the possibility of 

recovering past damages going back in time prior to expiration if the patent holder has not sacrificed 

those rights. This is because, as the Federal Circuit confirmed, a license is just an agreement not to 

sue; it is not the conveyance of an affirmative right to practice. TransCore, LP v. Elec. Trans. 

Consultants Corp., 563 F.3d 1271, 1275 (Fed. Cir. 2009) (“It follows, therefore, that a patentee, by 

license or otherwise, cannot convey an affirmative right to practice a patented invention by way of 

making, using, selling, etc.; the patentee can only convey freedom from suit.”). Expired patents still 

have value in the market transaction. But, if Finjan is correct that expiration means irrelevance, then 

the same could be said about the non-institution IPR decisions in the ’844 and ’494 Patents. Those 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 4 of 7
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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

patents expired three weeks after the Complaint was filed, and the IPR decisions were not until a 

year-and-half later; yet, Finjan persuaded the Court to allow them under the “book of wisdom.” 

B. COVID-19 Does Not Render the Acquisition Irrelevant 

Finjan argues that the Acquisition is irrelevant because the “financial landscape of the 

[Acquisition] agreement is vastly different from that of a hypothetical negotiation in 2012 and 2014 

....” Opp. at 3. As an initial matter, Finjan’s reliance on LaserDynamics, Inc. v. Quanta Computer, 

Inc., 694 F. 3d 51 (Fed. Cir. 2012), and Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259 (Fed. 

Cir. 1999) – and its suggestion that the mere passage of time between the hypothetical negotiation 

and a later-executed agreement automatically renders that agreement irrelevant – is belied by 

Finjan’s reliance on settlement agreements executed as recently as 2018 and 2019 (i.e., four to seven 

years after the hypothetical negotiation). As for the pandemic, Finjan’s arguments are unsupported 

by evidence or logic and, at best, they go to weight, not admissibility. Finjan never explains exactly 

why COVID-19 would have a significant impact on the value of its business. For example, Finjan is 

not a retail business whose revenue is impacted by a pandemic. Likewise, the postponement of two 

trial dates by several months within litigations whose tracks (including appeals) can take many years 

could not change the price substantially. This is why Finjan’s SEC filings make clear the pandemic 

was not an impetus for Finjan’s decision to sell its company and patent portfolio. Dkt. 683-9 at 13-

24. In 2018, long before the pandemic, Finjan began meeting with “potential transaction partners” 

and entities regarding acquiring Finjan, including Fortress. Id. Indeed, in 2019, Fortress repeatedly 

reduced its offer price to acquire Finjan based on its diligence in 2018 and 2019. Id. at 13-20. 

Nevertheless, if Finjan wants to make this excuse to the jury, Finjan can cross-examine Dr. Becker 

and present its own evidence to establish any alleged financial impact of COVID-19. See Dkt. 640 

at 18 (“it is true that the lump sum amount agreed upon in this agreement reflects the parties’ desire 

to settle multiple lawsuits – but Cisco can address the litigation history behind the ... agreement 

during cross examination and ensure that the jury is presented with the proper context.”). 

C. The Acquisition Both Rebuts Finjan’s Damages Claim and Supports Dr. 

Becker’s Affirmative Opinion, Making the Acquisition Highly Relevant 

Finjan incorrectly argues that Dr. Becker’s supplement is irrelevant because he did not 

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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

change his opinion as a result of the Acquisition. Data points consistent with an expert’s opinion do 

not become irrelevant simply because they support (instead of change) the expert’s number; they are 

additional evidence as to why the expert’s opinion should be accepted. Unless Finjan stipulates that 

the evidence is already so strong that no reasonable person could dispute Dr. Becker’s conclusion, 

then Cisco is entitled to put forth the strongest case available based on the evidence. Thus, while Dr. 

Becker’s opinion on the value of a license to Cisco for the patents-in-suit remains the same, the new 

information of the Acquisition provides substantial additional support for this opinion. This alone is 

a sufficient basis for this Court to allow Dr. Becker’s proposed supplement. In City of Pomona v. 

SQM N. AM. Corp., 866 F.3d 1060 (9th Cir. 2010) (which Finjan cited), the Ninth Circuit found that 

the district court abused its discretion by denying the plaintiff’s request to submit a supplemental 

expert report that reflected new information developed after the close of expert discovery. Id. at 

1066-69. The Ninth Circuit found that, although the expert’s opinion did not change, the level of 

support for his opinion increased based on the new information, which was “critical,” and expert 

testimony must “reflect the current state of knowledge.” Id. at 1067. The new information further 

proves that the opinions of Finjan’s expert are misguided and incorrect by orders of magnitude. 

II. FINJAN’S REMAINING OBJECTIONS FAIL 

Finjan’s claim that Dr. Becker’s supplementation “serves only to further Cisco’s attempts to 

disparage Finjan” is unfounded. Finjan was acquired. The acquirer paid a specific price. These are 

facts, not misrepresentations or disparagements. That these facts cause Finjan to be so embarrassed 

about its outsized damages claim that it would now label these facts as “disparagements” speaks 

volumes. Nor will Dr. Becker’s supplementation mislead the jury, confuse the actual issue, waste 

time, or result in undue delay. Two months remain before trial. The supplement is short and based 

on information uniquely known to Finjan, reflecting the culmination of a process that began in 2018. 

Finjan’s expert has ample time to prepare a rebuttal to this two-page supplement, and if depositions 

are necessary, they can be done efficiently via videoconference. If Finjan believes it needs to 

examine witnesses regarding the purported financial impact of the pandemic in order to provide 

context for the Acquisition, it can do so, but that does not render Cisco’s discussion of the 

Acquisition and Dr. Becker’s proposed supplement unduly prejudicial. 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 6 of 7
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DEFENDANT CISCO SYSTEMS, INC.’S REPLY IN SUPPORT OF MTN FOR LEAVE TO SUPPLEMENT 

ITS REPORT ON DAMAGES | CASE NO. 5:17-CV-00072-BLF-SVK 

Dated: August 21, 2020 Respectfully submitted, 

/s/ Matthew C. Gaudet 

Nicole E. Grigg (CA SBN 307733) 

negrigg@duanemorris.com 

2475 Hanover Street 

Palo Alto, CA 94304-1194 

Telephone: 650.847.4150 

Facsimile: 650.847.4151 

L. Norwood Jameson (admitted pro hac vice) 

Email: wjameson@duanemorris.com 

Matthew C. Gaudet (admitted pro hac vice) 

Email: mcgaudet@duanemorris.com 

David C. Dotson (admitted pro hac vice) 

Email: dcdotson@duanemorris.com 

John R. Gibson (admitted pro hac vice) 

Email: jrgibson@duanemorris.com 

Jennifer H. Forte (admitted pro hac vice) 

Email: jhforte@duanemorris.com 

1075 Peachtree Street, Ste. 2000 

Atlanta, GA 30309 

Telephone: 404.253.6900 

Facsimile: 404.253.6901 

Joseph A. Powers (admitted pro hac vice) 

Email: japowers@duanemorris.com 

Jarrad M. Gunther (admitted pro hac vice) 

Email: jmgunther@duanemorris.com 

30 South 17th Street 

Philadelphia, PA 19103 

Telephone: 215.979.1000 

Facsimile: 215.979.1020 

Attorneys for Defendant 

CISCO SYSTEMS, INC. 

Case 5:17-cv-00072-BLF Document 702 Filed 08/21/20 Page 7 of 7