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 CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

DUANE MORRIS LLP 

D. Stuart Bartow (CA SBN 233107) 

dsbartow@duanemorris.com 

Nicole E. Grigg (CA SBN 307733) 

negrigg@duanemorris.com 

2475 Hanover Street 

Palo Alto, CA 94304-1194 

Telephone: +1 650 847 4146 

Fax: +1 650 523 4780 

Telephone: 415.957.3000 

Facsimile: 415.957.3001 

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 

Alice E. Snedeker (GA SBN 151066) 

aesnedeker@duanemorris.com 

1075 Peachtree NE, Suite 2000 

Atlanta, GA 30309 

Telephone: 404.253.6900 

Facsimile: 404.253.6901 

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

DEFENDANT CISCO SYSTEMS, 

INC.’S MOTION IN LIMINE NO. 5 

TO EXCLUDE EVIDENCE THAT 

IMPROPERLY SKEWS THE 

DAMAGES HORIZON 

REDACTED 

Case 5:17-cv-00072-BLF Document 539 Filed 04/16/20 Page 1 of 8
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 i 

CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

TABLE OF ABBREVIATIONS 

Plaintiff Finjan, Inc. Finjan or Plaintiff 

Defendant Cisco Systems, Inc. Cisco or Defendant 

Finjan, Inc. v. Blue Coat Systems, LLC, No. 5:15-cv-3295-BLF, Order 

Regarding Motions in Limine (Redacted), Dkt. 404 (Nov. 4, 2017) Blue Coat 2 Order 

July 11, 2019 Expert Report of Finjan’s Damages Expert, Dr. LayneFarrar. Ex. 9 

March 26, 2020 transcript of proceedings before Judge Freeman. Ex. 12 

April 18, 2019 Deposition transcript of Hilton Romanski Ex. 13 

Second Amended Expert Report of Michael Mitzenmacher, Ph.D. 

Regarding Infringement by Cisco Systems, Inc. of Patent Nos. 

6,804,780 and 8,141,154. Ex. 14 

Second Amended Expert Report of Eric Cole, Ph.D. Regarding 

Infringement by Cisco Systems, Inc. of Patent Nos. 6,154,844 and 

8,677,494. Ex. 15 

Second Amended Expert Report of Nenad Medvidovic, Ph.D. 

Regarding Infringement by Cisco Systems, Inc. of Patent No. 7,647,633. Ex. 16 

August 29, 2019 Errata to Expert Report of Dr. Anne Layne-Farrar, 

Exhibit 5 Ex. 17 

September 11, 2019 deposition transcript of Anne Layne-Farrar Ex. 18 

Declaration of Nicole Grigg in Support of Defendant Cisco Systems, 

Inc.’s Motions in Limine 

Grigg Decl.1

 

1

 Unless otherwise specified, all exhibits refer to those attached to the Grigg Decl. 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

Cisco seeks to preclude Finjan from introducing, under FRE 403, evidence, arguments and 

opinions that will skew the damages horizon and prejudice Cisco. This includes: (1) Cisco’s size, 

stock value/market cap, annual revenues, sales by segment, past annual revenue of the accused 

products (prior to the start of damages), and like data points; (2) Cisco’s payment of $2.7 billion to 

acquire Sourcefire, based almost entirely on unaccused products; (3) Worldwide (i.e., non-U.S.-

based) revenues for the accused products in Dr. Layne-Farrar’s Methods 1 and 2 (royalty rate x 

royalty base); and (4) “Attempted” submissions” and submissions to Threat Grid’s German data 

center in Dr. Layne-Farrar’s Method 4 (price-per-scan). The Court has recognized the prejudicial 

effect of large numbers untethered to the accused functionality, which skew the damages horizon: 

[T]he Federal Circuit has repeatedly looked at cases where certain expert testimony so 

skewed the damages evaluations for the jury as a way of prejudicially resetting their 

calculation ... and has rejected that. ... [I]f you put a billion dollars on the table, then the jury 

might think, if the jury thinks you did a lousy job but they are going to give you something, 

maybe they will give you $250 million and think that you’ve lost terribly. And that’s the 

problem with skewing. Whereas in fact, the reasonable damages, they should never hear 

anything about a billion dollars. 

Ex. 12, at 32:4-21. The same concerns arise with each of the types of information discussed herein. 

I. Company-Wide Information Regarding Cisco’s Size And Overall Sales 

Disclosures of overall revenue and company-wide financial information “skew the damages 

horizon for the jury.” Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1320 (Fed. Cir. 2011);

see also LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d. 51, 68 (Fed. Cir. 2012). The 

disclosure of a company’s “size, wealth, or overall revenues” is not relevant to the damages analysis 

and the admission of such evidence “is substantially outweighed by the risk of unfair prejudice, 

confusion of the issues and misleading the jury necessitating its exclusion under Rule 403.” HTC v. 

Techn. Props. Ltd., No. 2013 WL 4782598, at *11-12 (N.D. Cal. 9/6/12) (“Federal Circuit case law 

[such as Uniloc] does not permit the use of a company’s overall size or revenue as a check to confirm 

the reasonableness of a jury award.”). This is because “[a]dmission of overall revenues that have no 

demonstrated correlation to the value of the patented features only serves to make a patentee’s 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

proffered damages amount appear modest by comparison, and to artificially inflate the jury’s 

damages calculation beyond that which is ‘adequate to compensate for infringement.’” Blue Coat 2

Order at 23 (internal quotation marks omitted). Similarly, the Court should not permit Finjan to argue 

that the royalty it seeks is only a fraction, small percentage, etc., of Cisco’s overall revenue. 

LaserDynamics, 694 F.3d at 67-68; Blue Coat 2 Order at 22-23. And, by extension, the Court should 

precluded Finjan under Rules 401/402 and/or 403 from introducing other large financial figures, such 

as Cisco’s market capitalization or capital expenditures, that would only confuse the jury and skew 

the damages horizon. Uniloc, 632 F.3d at 1320; Golden Bridge Tech. v. Apple Inc., No. 2014 WL 

4057187, at *2 (N.D. Cal. June 1, 2014) (granting motion in limine to exclude argument or testimony 

regarding Apple’s size, wealth, market capitalization, cash, overall revenues, revenues on accused 

products, or entire market value of Apple’s accused sales). 

Similarly, the Court previously ordered that the damages period begins with the filing of the 

Complaint. See Dkt. 487 (granting summary judgment on the issue of pre-suit damages). 

Accordingly, the Court should preclude Finjan from referencing the revenues of the accused products 

prior to the filing of the Complaint. It would be misleading and prejudicial to reference revenues 

earned prior to this date, and such numbers would only tend to skew the damages horizon. 

II. What Cisco Paid to Acquire Sourcefire 

Similar concerns arise with respect to the $2.7 billion Cisco paid to acquire Sourcefire (and 

similar figures regarding Sourcefire’s total revenues). That transaction was based on the unaccused 

Next-Generation Firewall technology, including an Intrusion Prevention System—not the AMP 

products, which are at issue here. Ex. 13 at 84:8-15(“Sourcefire had a intrusion prevention system 

..., as well as a strong leadership team in technology to be able to execute on that strategy of extending 

back into the security market. That's what drove that acquisition. Q. Now, is that something different 

than AMP? A. It is something different than AMP ...”). 

Notably, the Court stated that it does not “want a whole trial on” why Cisco purchased 

Sourcefire and what was the driver of the acquisition price. Ex. 12, at 30. The Court was properly 

concerned about the likelihood that a $2.7 billion acquisition price would confuse the jury and skew 

the damages horizon, as well as lead to a trial within a trial on the value of the AMP technology 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

(which was very small) to the overall purchase price of Sourcefire. In sum, the total purchase price 

of Sourcefire is not probative of the value of the accused AMP products, much less the portion of 

AMP accused of infringement. See also Blue Coat 2 Order, at 22 (excluding Symantec’s acquisition 

price because “it has no probative value and is highly prejudicial. Finjan fails to establish probative 

value as there is no indication that the acquisition price shows how Symantec valued the technology 

that allegedly infringed the Asserted Patents.”). To be clear, Cisco does not seek to exclude from trial 

any reference to the fact of Cisco’s acquisition of Sourcefire, but instead to the total amount paid, 

Sourcefire’s total annual revenues at the time of acquisition, or Sourcefire’s market cap at the time. 

III. Worldwide Sales 

For Methods 1 and 2 of her damages opinions (royalty rate x royalty base, Dr. Layne-Farrar 

provided separate royalty calculations for “USA” and “Worldwide.” For Method 1, her use of 

“Worldwide” sales figures instead of “USA” sales figures resulted in her damages range increasing 

by approximately 50%. See, e.g., Ex. 9 ¶ 353 (“The applicable damages based on this method for

products sold in the United States ... ranges from ... approximately $97 million to $115 million. The 

applicable damages based on this method for products sold worldwide ... range from approximately 

$140 million to $167 million.”). Similar increases are shown in Method 2. But neither Dr. LayneFarrar nor Finjan’s technical experts expressed any opinion about which, if any, of Cisco’s 

worldwide sales qualify as acts of infringement under § 271(a). See Exs. 14 ¶¶2495-2503; 15 pp. 

1417-1419; 16 ¶¶4503-4511). Thus, there is no factual basis to include in any royalty calculation, 

for example, a sale of AMP for Endpoints to IBM Australia Ltd. and shipped to Fiserv Australia PTY 

Ltd., and which is booked by the Cisco Australia Operating Unit. Similarly, a sale of a Threat Grid 

license to Dimension Data Japan Inc. and booked by the Cisco Japan Operating Unit, is clearly a 

foreign sale with no U.S. connection. Yet the revenue from these types of sales are included in Dr. 

Layne-Farrar’s worldwide figures and wrongfully skew the damages horizon. 

“It is axiomatic that U.S. patent law does not operate extraterritorially to prohibit 

infringement abroad.” Power Integrations, Inc. v. Fairchild Semiconductor Int’l., Inc., 711 F.3d 

1348, 1371 (Fed. Cir. 2013); see also id. (“Regardless of how the argument is framed under the facts 

of this case, the underlying question here remains whether Power Integrations is entitled to 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

compensatory damages for injury caused by infringing activity that occurred outside the territory of 

the United States. The answer is no.”). Thus, the patent laws “do not provide compensation for a 

defendant’s foreign exploitation of a patented invention, which is not infringement at all.” Id.

Here, the parties agree that all of the sales/revenue captured in Dr. Layne-Farrar’s “USA” 

calculations in Methods 1 & 2 of her damages opinion are properly credited as allegedly infringing 

United States sales, and such figures are not at issue here. However, Dr. Layne-Farrar also calculated 

separate “worldwide” figures that include foreign sales for which no evidentiary foundation exists in 

the record. For Method 4 (price-per-scan), she includes all submissions to Threat Grid, even if the 

submission was made by, e.g., a European-based customer to Threat Grid’s German data center. 

The Federal Circuit has described the standard for proving U.S. infringement as follows: 

[W]e think that § 271(a) provides the basis for drawing the needed line. It states a clear 

definition of what conduct Congress intended to reach—making or using or selling in 

the United States or importing into the United States, even if one or more of those

activities also occur abroad. 

Carnegie Mellon Univ. v. Marvell Tech. Grp., Ltd., 807 F.3d 1283, 1306 (Fed. Cir. 2015). Thus, 

before the Court allows Finjan to present evidence of worldwide sales, the Court should require 

Finjan to proffer evidence showing how it will prove that any foreign sale (or submission to Threat 

Grid) qualifies as infringement under § 271(a). Otherwise, allowing Finjan to put a damages number 

in front of the jury without proof tying that damages figure to an act of infringement invites the jury 

to award impermissible damages and will artificially and improperly inflate the top-end of the 

damages range the jury considers. See MLC Intellectual Property, LLC v. Micron Technology, Inc., 

Case No. 14-2019, 2019 WL 2437073, *3 (N.D. Cal. June 11, 2019) (granting motion in limine “to 

exclude evidence of foreign sales” where plaintiff had not identified any evidence challenging 

“categorization of certain sales as ‘foreign’”); see also Halo Electronics, Inc. v. Pulse Electronics, 

Inc., 769 F.3d 1371, 1377-81 (Fed. Cir. 2014), rev’d on other grounds, 136 S. Ct. 1923 (2016) 

(affirming summary judgment that no sale or offer to sell occurred in the U.S. where manufacturing 

and delivery occurred outside the United States and there was no evidence of the location of the 

formation of relevant binding contracts to sell); Texas Advanced Optoelectronic Sols., Inc. v. Renesas 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

Elecs. Am., Inc., 895 F.3d 1304, 1330 (Fed. Cir. 2018) (“TAOS has presented an even weaker case 

than Halo presented. Here, the undisputed facts show manufacture and packaging abroad, and 

shipping of the units to locations abroad. And TAOS has not presented any evidence similar to Halo’s 

‘general business agreement’ and domestic quarterly pricing negotiations as to specific products.”). 

IV. “Attempted” and non-U.S. “Submissions” Under the “Price Per Scan” Theory 

Dr. Layne-Farrar’s Method 4 calculates damages based on both “Attempted Submissions” and 

“Successful Submissions.” Ex. 17. A “successful submission” “indicates when the analysis did not 

crash but rather worked properly.” Ex. 9 ¶ 357. But none of Finjan’s technical experts have opined 

that an attempted submission of a file to Threat Grid—irrespective of whether the submission is 

successful (e.g., if the sandbox crashes or the file sent was not a supported file type)—infringes. Ex. 

18 at 256:13-258:8 (does not “have that information” on whether unsuccessful submissions infringe). 

Damages are limited to those “adequate to compensate for the infringement,” 35 U.S.C. § 284, 

and a proposed royalty “cannot include activities that do not constitute patent infringement.” 

AstraZeneca AB v. Apotex Corp., 782 F.3d 1324, 1343 (Fed. Cir. 2015). Accordingly, the number of 

“Attempted Submission” is irrelevant and should be excluded pursuant to Rules 401/402. Moreover, 

the “attempted submissions” damages figures should also be excluded under Rule 403, because using 

“attempted submissions” figure doubles Dr. Layne-Farrar’s damages calculations (the top-end of Dr. 

Layne-Farrar’s range balloons from $63 million for “successful” submissions to $123 million for 

“attempted” submissions) without any attempt by Finjan to argue that attempted submissions infringe. 

Similarly, both the attempted and successful submissions figures capture worldwide 

submissions, including, e.g., submissions by European-based customers to the German data center. 

Again, no expert has articulated an infringement theory for such foreign submissions. “It is axiomatic 

that U.S. patent law does not operate extraterritorially to prohibit infringement abroad.” Power 

Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348, 1371 (Fed. Cir. 2013); see 

also Enplas Display Device Corp. v. Seoul Semiconductor Co., Ltd., 909 F.3d 398, 411 (Fed. Cir. 

2018) (vacating jury verdict because district court improperly permitted damages testimony on 

noninfringing uses). Accordingly, the Court should not permit the introduction of this theory to the 

extent a portion of it relies on admittedly non-infringing submissions and thus skews the royalty. 

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CISCO’S MOTION IN LIMINE NO. 5 TO EXCLUDE EVIDENCE THAT IMPROPERLY SKEWS THE DAMAGES HORIZON

CASE NO. 5:17-CV-00072-BLF-SVK 

Dated: April 16, 2020 Respectfully submitted, 

/s/ Nicole E. Grigg 

Nicole E. Grigg 

D. Stuart Bartow 

DUANE MORRIS LLP 

2475 Hanover Street 

Palo Alto, CA 94304-1194 

Email: negrigg@duanemorris.com 

Email: dsbartow@duanemorris.com 

Telephone: 650.847.4146 

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 

John R. Gibson (admitted pro hac vice) 

Email: jrgibson@duanemorris.com 

David C. Dotson (admitted pro hac vice) 

Email: dcdotson@duanemorris.com 

Jennifer H. Forte (admitted pro hac vice) 

Email: jhforte@duanemorris.com 

Alice E. Snedeker 

Email: aesnedeker@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) 

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 539 Filed 04/16/20 Page 8 of 8