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 DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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. 3 RE 

PREJUDICIAL LITIGATION 

SETTLEMENT AMOUNTS 

(INTEL/MCAFEE, AND BLUE 

COAT/SYMANTEC) 

REDACTED 

Case 5:17-cv-00072-BLF Document 536 Filed 04/16/20 Page 1 of 7
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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

TABLE OF ABBREVIATIONS 

Plaintiff Finjan, Inc. Finjan or Plaintiff 

Defendant Cisco Systems, Inc. Cisco or Defendant 

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

John Dunn article titled “McAfee defiant after latest Finjan patent 

defeat,” accessed 4/15/2020 from 

https://www.networkworld.com/article/2247134/mcafee-defiant-afterlatest-finjan-patent-defeat.html

Ex. 10 

Deposition transcript of Julie Mar-Spinola, taken March 15, 2019 Ex. 11 

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. 

Case 5:17-cv-00072-BLF Document 536 Filed 04/16/20 Page 2 of 7
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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

Cisco requests that the Court exclude Finjan from referencing: (1) the total amount it has 

earned pursuant to its licensing and litigation settlement efforts, and (2) the outlier lump sum 

payments made by Secure Computing/McAfee/Intel and Blue Coat/Symantec to settle the multiple 

litigations between the respective parties. With respect to the Secure Computing/McAfee/Intel 

settlement, Finjan’s damages expert conceded that the litigation settlement was “complex” and that 

she does not “have the details” about how the lump sum payment was negotiated. Ex. 9 at ¶ 290. 

She similarly concluded that the fact that the Symantec/Blue Coat “license grew out of several 

litigation matters ... complicates its use as a bench mark.” Id. ¶ 311. As a result, Dr. Layne-Farrar 

does not rely upon the final lump-sum payment amount from either of these litigation-related 

settlements, but instead pulls various other facets of these agreements to support her opinions. For 

his part, Dr. Becker, Cisco’s damages expert, does not rely upon either of these litigation settlements. 

Accordingly, exclusion of the total amounts paid would not alter any damages experts’ opinions. 

Further, the total amount received pursuant to Finjan’s licensing activities is also irrelevant to the 

hypothetical negotiation, and any discussion of the total amounts it has received will confuse the jury 

and prejudice Cisco. Pursuant to Federal Rules of Evidence 401, 402, and 403, Cisco moves to 

exclude this evidence. 

I. ARGUMENT AND CITATIONS TO AUTHORITY 

A. Legal Standard 

The patent owner has the burden of demonstrating that licenses relied on to prove damages 

are “sufficiently comparable to the hypothetical license at issue in suit.” Lucent Techs., Inc. v. 

Gateway, Inc., 580 F.3d 1301, 1325, 1329 (Fed. Cir. 2009). A patentee cannot rely on license 

agreements that are “radically different from the hypothetical agreement under consideration” to 

determine a reasonable royalty. Id. at 1327. Rather, “there must be a basis in fact to associate the 

royalty rates used in prior licenses to the particular hypothetical negotiation at issue in the case.” 

Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292, 1317 (Fed. Cir. 2011). District courts should

guard against attempts to “inflate the reasonable royalty analysis with conveniently selected licenses 

without an economic or other link to the technology.” ResQNet.com, Inc. v. Lansa, Inc., 594 F.3d 

860, 872-73 (Fed. Cir. 2010). 

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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

The Federal Circuit has warned that special attention should be paid to license agreements 

that were heavily tainted by litigation: “[t]he notion that license fees that are tainted by the coercive 

environment of patent litigation are unsuitable to prove a reasonable royalty is a logical extension of 

Georgia-Pacific, the premise of which assumes a voluntary agreement will be reached between a 

willing licensor and willing licensee, with validity and infringement of the patent not being disputed.” 

LaserDynamics, 694 F.3d at 77; see also Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 

1078-79 (Fed. Cir. 1983). As set forth below, the two agreements at issue here are textbook cases of 

such taint: the Secure Computing/Intel/McAfee agreement was a direct outgrowth of a willfulness 

and enhanced damages judgment and then injunction issued in favor of Finjan against Secure 

Computing, which was then acquired by McAfee (which was in turn acquired by Intel); and the Blue 

Coat/Symantec settlement was entered after the parties had already conducted 4 jury trials (one of 

which was a mistrial) and had 3 more jury trials already on schedule for the calendar year following 

the execution of the agreement. 

B. Background 

Given Finjan’s extensive licensing history, both parties’ damages experts have relied on some 

of its agreements to support their damages opinions. For her part, Finjan’s Dr. Layne-Farrar has 

opined that Finjan’s licenses are “not directly comparable to the circumstances relevant for the 

current matter.” Ex. 9 at ¶ 284. Nevertheless, she has pulled certain “aspects” of these agreements 

that she believes are “informative for the hypothetical negotiation between Finjan and Cisco.” Id. 

She then goes on to provide information as to how certain of Finjan’s 20+ portfolio-wide licenses 

“inform damages in the current matter, despite not rising to the level of ‘comparable’ license.” Id. 

1. Secure Computing/McAfee/Intel Agreement 

Dr. Layne-Farrar noted that the “settlement is complex” and it arose after Secure Computing 

was found to infringe certain of Finjan’s patents, a jury award of $9.18 million, and an ultimate award 

of $37 million after an increase related to willful infringement. Id. ¶ 290; see also id., at ¶¶ 204-208 

(explaining litigation activities, including multiple active lawsuits and an injunction, a finding of 

willfulness, and enhanced damages). There was also an injunction, and the possibility of McAfee 

violating that injunction as an affiliate after acquiring Secure Computing. Finjan, Inc. v. Secure 

Case 5:17-cv-00072-BLF Document 536 Filed 04/16/20 Page 4 of 7
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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

Computing Corp., 626 F.3d 1197 (Fed. Cir. 2010) (“The district court awarded damages to Finjan, 

enhanced the award under 35 U.S.C. § 284, and imposed a permanent injunction against 

Defendants.”); Ex. 10. Dr. Layne-Farrar further conceded that she does “not have the details of how 

Intel and Finjan negotiated the additional $85M settlement that Intel paid to finally settle with 

Finjan.” Ex. 9 at ¶ 290. Given the infirmities of relying upon the actual lump-sum amount, Dr. 

Layne-Farrar concludes that only the “8%-16% rates that defined the initial $37.3 million in damages 

to be informative ... only to the extent that Finjan has continued to use the 8%-16% as part of its 

opening offer in licensing negotiations.” Id. 

This Court excluded reliance on this agreement in the Blue Coat II case. This Court 

previously noted that the lump sum paid by Intel agreement is an outlier and thus would only serve 

to skew the damages horizon. Finjan, Inc. v. Blue Coat Sys., Case No. 15-cv-03295, Dkt. 404 

(redacted version), at 18-19 (N.D. Cal. Nov. 4, 2017) (excluding Intel agreement “for all purposes 

except for arguing validity as rebuttal”)). In that same Order, the Court further held that Finjan’s 

damages expert could not rely on litigation-related settlements “to show the dollar amount of 

licensing” and thus precluded Finjan from introducing evidence regarding “the amount of 

settlement.” Id. at 20. 

Finjan should likewise be precluded from referencing each of the $9.18 million jury award, 

the $37 million judgment (which reflects an increase for willful infringement), and the follow-on 

payment of $85 million. As noted above, Dr. Layne-Farrar does not rely upon any of these amounts 

in her reasonable royalty analysis, but instead focuses on the royalty rate that was allegedly utilized 

by the jury in Secure Computing to derive its figures. Dr. Layne-Farrar has conceded that the lack 

of information regarding how these lump-sum figures were calculated—and the fact that they each 

settled multiple rounds of litigation—rendered the final amounts unhelpful in her analysis. See, e.g., 

Ex. 9 at ¶¶ 291 (conceding that she did “not have the details of how Intel and Finjan negotiated the 

additional $85M settlement payment”). Whatever the merits of Dr. Layne-Farrar’s use of those rates 

in this case—and Cisco contends there is none (see Dkt. 429), because neither Dr. Layne-Farrar nor 

Dr. Becker rely or otherwise reference the final lump-sum payment made by Intel to settle the 

multiple litigations, the Court should preclude Finjan from referencing the lump-sum amount. 

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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

2. Symantec / Blue Coat Agreement 

Similarly, Finjan entered into a patent license agreement and settlement with Symantec Corp. 

and its subsidiary Blue Coat Systems, LLC, as a part of a settlement agreement resolving numerous

patent infringement suits, including an appeal. Ex. 9 at ¶¶ 251-53. At the time the license/settlement 

agreement was executed, the parties had already tried four cases to different juries (one of which 

ended in a mistrial). Ex. 11 at 97:22-99:14. There were 3 more trials between the parties in the thenupcoming calendar year, for a total of 7 jury trials reflected in the settlement. Id. It is difficult to 

imagine an agreement more tainted by litigation. 

The agreement provided for a lump-sum payment of $65 million. Ex. 9 at ¶¶ 251-53. Dr. 

Layne-Farrar acknowledges that settlement “grew out of several litigation matters which complicates 

its use as a benchmark for reasons discussed above regarding settlement agreement,” and that the 

“payment amount of this license is not directly comparable to the situation here ... ” Id. at ¶¶ 311-

313. Thus, instead of relying upon the final lump-sum amount to justify her opinions, Dr. LayneFarrar suggests that “[t]he rates relied on to calculate damages in the original Blue Coat litigation ... 

were 6% to 8% of hardware products (no software products were at issue)” (id. ¶ 312), and points to 

the license’s “additional royalties [provision], as triggered by M&A [mergers and acquisitions] to be 

paid on top of the negotiated lump sum” (id.¶ 313). Again, because neither Dr. Layne-Farrar nor Dr. 

Becker rely upon or otherwise reference the final lump-sum payment made by Blue Coat/Symantec 

to settle these litigations—as opposed to other facets surrounding the negotiation of that license—

the Court should preclude Finjan from referencing such lump-sum amount. 

C. Aggregate Amount 

Any discussion by Finjan of the aggregate amount of money it has received in connection 

with its patent portfolio is also irrelevant to the hypothetical negotiation and highly prejudicial. 

Despite Finjan having entered into 20 agreements as of the time of Dr. Layne-Farrar’s report, 

approximately half of the total revenue arises from just the above two outlier agreements. 

Accordingly, those agreement skew the horizon. Introduction of the total licensing revenue would 

only be done to improperly influence the jury by anchoring Finjan’s proposed royalty here. See 

LaserDynamics, 694 F.3d at 77-78 (finding abuse of discretion where district court admitted license 

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DEFENDANT CISCO SYSTEMS INC.’S MOTION IN LIMINE NO. 3 RE IRRELEVANT AGREEMENTS

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

agreement that was significantly more than next highest license and, based on procedural posture of 

litigation, reflected strong desire to avoid further litigation, not value of claimed invention). The 

Court should preclude Finjan from referencing the aggregate amount of licensing revenue Finjan has 

generated in its litigation campaign. 

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 536 Filed 04/16/20 Page 7 of 7