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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FINJAN, INC.,

Plaintiff,

v.

CISCO SYSTEMS INC.,

Defendant.

Case No. 17-cv-00072-BLF (SVK)

SECOND INTERIM ORDER ON JOINT 

DISCOVERY LETTER BRIEFS RE 

CISCO'S PRODUCTION OF 

CONVOYED/DERIVATIVE SALES 

INFORMATION

ORDER SETTING MARCH 15, 2019 

HEARING

Re: Dkt. No. 194, 201

Before the Court are the parties’ joint discovery letter briefs regarding a dispute over 

whether Defendant Cisco Systems Inc. is required to produce documents and provide interrogatory 

responses related to convoyed/derivative sales in response to Plaintiff Finjan, Inc.’s discovery 

requests. ECF 194, 201. The Court held a hearing on March 7, 2019. At the hearing, the Court 

required the parties to engage in additional meet and confer following initial guidance from the 

Court. Based on consideration of the parties’ submissions, arguments made at the hearing, the 

case file, and relevant law, the Court ORDERS as follows:

The parties appear to agree that, in appropriate cases, information about the accused 

infringer’s sales of products or services sold with the accused products are relevant to the issue of 

damages. See generally Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 

(S.D.N.Y. 1970). Their dispute stems from whether Finjan properly disclosed that it would seek 

damages relating to such convoyed/derivative sales in the damages contentions Finjan served in 

accordance with this district’s Patent Local Rules. 

Patent Local Rule 3-8 requires each party asserting infringement to “[i]dentify each of the 
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United States District Court

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category(-ies) of damages it is seeking for the asserted infringement, as well as its theories of 

recovery, factual support for those theories, and computations of damages within each category, 

including: (1) lost profits; (2) price erosion; (3) convoyed or collateral sales; (4) reasonable 

royalty; and (5) any other form of damages.” “The requirements of L.R. 3-8 could not be more 

clear: identify the theories of recovery; identify the known facts that support the theories; do the 

math.” Twilio, Inc. v. Telesign Corp., No. 16-cv-069250-LHK (SVK), 2017 WL 5525929, at *2 

(N.D. Cal. Nov. 17, 2017). An important function of this District’s damages contention 

requirement is to provide damages information “early enough in the course of fact discovery to 

inform the parties and the court on issues of relevance and proportionality,” as well as to “create[] 

a potential opportunity for meaningful settlement discussions.” Id. (citing The Sedona Conference 

Commentary on Case Management of Patent Damages and Remedies Issues: Proposed Model 

Local Rule for Damages Contentions, at p. 4 (April 2016, public comment version).

Finjan appears to concede that it did not expressly state in its damages contentions that it

was seeking damages for “convoyed or collateral sales.” But Finjan argues that Cisco was

nevertheless on notice that Finjan would seek damages associated with convoyed/derivative sales.

The Court concludes that Finjan’s existing damages contentions do not indicate that Finjan 

intends to seek damages for convoyed/derivative sales. Thus, the Court must consider whether to 

permit Finjan to amend its damages contentions to state that it is seeking recovery under a theory 

of convoyed or collateral sales. “[U]nlike the more rigorous disclosure requirements for 

infringement and invalidity contentions (see L.R. 3-1, L.R. 3-3), there is no ‘good cause’ threshold 

for amendment of damages contentions, nor is there even a requirement to amend the 

contentions.” See Twilio, 2017 WL 5525929, at *2. However, the Court will consider prejudice 

to the Cisco in deciding whether to permit Finjan to amend its damages contentions at this stage of 

the litigation.

Discovery is still open in this case, but only barely, with a fact discovery cutoff of April 

18, 2019. Given the impending fact discovery cutoff, there is prejudice to Cisco to now permit 

Finjan to add a new theory of convoyed/derivative sales as an independent category of damages. 

As the Court explained at the March 7, 2019 hearing, the prejudice to Cisco may be mitigated by 
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narrow, focused discovery requests relating to convoyed/derivate sales. The Court instructed the 

parties to meet and confer further regarding narrowing of Finjan’s discovery requests. 

The parties made some progress in meeting and conferring to narrow the scope of Finjan’s 

discovery requests, as reflected in the parties’ follow-up letter on March 11, 2019 (ECF 201). 

Three categories remain in dispute. As discussed below, the Court needs further information with 

regard to two categories and denies the third. 

1. Cisco Umbrella: This appears to be a security product Cisco “upsold” with the accused 

technologies. In the parties’ March 11 submission, Cisco discusses the technical and 

geographical differences between this group of products and the accused technologies 

and the fact that the revenue is managed by a different team than that of the accused 

technologies. However, this discussion does not address the burden on Cisco to locate 

and provide revenue and customer information to answer the question of whether

customers who purchased the accused technologies also purchased Cisco Umbrella 

products in the period 2015 to present and to identify the revenues associated with 

those products.

2. Firepower Management Center: This also appears to be a product that Cisco “upsold”

with the accused technologies. Cisco’s discussion of the product’s legacy and the 

location of product managers does not directly address the question of the relative 

burden on Cisco to identify customer and revenue information as to those customers 

who purchased accused technologies and these products in the relevant time frame. 

3. Cisco Integration Services Router (“ISR”): The issue of production of customer 

information regarding ISRs was not raised by Finjan in the parties’ joint letter of 

March 5, 2019 (ECF 194). Raising it now goes beyond the Court's directive to narrow 

requests to mitigate the prejudice arising from the late amendment to damages 

contentions. Accordingly, Finjan’s request for additional information regarding ISR is 

DENIED.

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The Court will hear further from the parties on the two open issues identified above on 

Friday, March 15, 2019 at 9:30 a.m. The parties may appear telephonically if they wish by 

making arrangements through Court Call at 1-866-582-6878. 

SO ORDERED.

Dated: March 13, 2019

SUSAN VAN KEULEN

United States Magistrate Judge