United States District Court, N.D. California
ORDER COMPELLING PRODUCTION RE: DKT. NO. 543
S. HIXSON UNITED STATES MAGISTRATE JUDGE
Court had a telephonic hearing on June 27, 2019 concerning
the parties' joint discovery letter brief at ECF No. 543.
This is Juniper's motion to compel concerning RFPs 3-4,
10, and 12-15, which are about Finjan's relationship with
and lawsuit against Trustwave.
2009, Finjan divested its operating division to a company
called M86 Security, Inc. See
https://en.wikipedia.org/wiki/Finjan. As part of that
spin-off, Finjan licensed its patents to M86 so that M86
could sell Finjan's products that were covered by
Finjan's patents. In 2012, Trustwave acquired M86.
and Trustwave amended and restated the patent license
agreement to account for the transfer of ownership.
See ECF No. 554 (Finjan v. Trustwave
Complaint), ¶ 6. In 2015, Singtel acquired Trustwave.
Id. ¶ 8; see generally ECF No. 336 at
255-57 (Finjan's CEO's testimony about these
December trial in this action, Finjan's CEO Phillip
Hartstein testified that the original code developed by
Finjan is still included in the Trustwave boxes being sold
today. ECF No. 336 at 326-27. Finjan also contends that it is
entitled to an injunction in part because it
“indirectly compete[s with Juniper] through
Finjan's licensees and prospective licensees” and
that “Finjan's technology that was sold and
licensed to M86 Security, and subsequently Trustwave, is
still actively sold in the market in competition with
Juniper.” ECF No. 542, Ex. A at 25 (response to
interrogatory no. 8). And Finjan points to its licensees -
including Trustwave - as evidence of the “commercial
success” of the patents in support of its contentions
concerning secondary considerations of non-obviousness.
Id. at 30 (response to interrogatory no. 9).
April 2018, Finjan sued Trustwave for breach of contract. ECF
No. 554. Finjan alleges that Trustwave failed to make certain
royalty payments that became due upon the acquisition by
Singtel. Finjan also alleges that Trustwave breach the 2012
license by failing to cooperate with KPMG's audit, which
determined that an additional $1.5 million was due in royalty
payments. Trustwave moved to dismiss, asserting, among other
arguments, that Finjan's complaint failed to adequately
plead that any Trustwave products actually did embody any
valid Finjan patent. ECF No. 554-1 at 8-10. The motion
appears to raise both the factual issue of whether any
Trustwave products that use the Finjan technology were
identified (see id. at 8 n.3 & 9) and the legal
question of whether, if so, those patents are valid. See
id. at 9-10. Thus, there is a dispute in that action
over whether Trustwave's products actually use
Finjan's patented technology.
that as background, the Court turns to the specific RFPs at
issue. RFPs 3-5 and 13-14 seek communications and documents
regarding any agreements between Finjan and Trustwave
involving the patents-in-suit (RFP 3), any efforts to license
the patents to Trustwave (RFP 4), the negotiation or
performance of any agreement (including any discussion of
royalty rates or payments amounts) (RFP 5), the negotiations
over Trustwave's obligation to pay royalties (RFP 13),
and any communications referenced in Finjan's complaint
filed against Trustwave (RFP 14). For RFP 3, Finjan agreed to
provide documents leading up to the 2009 license with M86 and
nothing after. For RFP 14, Finjan agreed to produce nothing.
The responses to the other RFPs do not clearly say what
Finjan will or will not produce.
and 12 seek sales and revenue information concern the
Trustwave products that allegedly embody Finjan's
patents. For RFP 10, Finjan says no, and for RFP 12,
Finjan's response is unclear. RFP 15 seeks documents
relating to KPMG's audit of Trustwave concerning
royalties allegedly owed to Finjan. In response, Finjan
Court finds that these RFPs seek relevant information. Finjan
has put its relationship with Trustwave at issue by claiming
that Trustwave's products use Finjan's patented
technology, and then using this alleged fact in support of
its claim for injunctive relief and as secondary evidence of
non-obviousness. RFPs 3-5 and 13 assume that Finjan's
assertions about Trustwave using its patents are true and
then seek documents that are relevant to determining the
degree of comparability between the Trustwave license and the
hypothetical negotiation in this case, as well as to
calculating a reasonable royalty. The documents sought by
RFPs 10, 12, 14 and 15 are relevant to determining the extent
to which it is actually true that Trustwave's products
embody Finjan's patents.
argues that documents about its lawsuit against Trustwave are
not relevant to Juniper's damages in this case. However,
that argument is a straw man. The documents Juniper is
seeking about that lawsuit relate to the extent to which
Trustwave uses Finjan's patented technology, which as
stated above, is relevant to Finjan's injunction claim
and to the commercial success of Finjan's
asserts that none of the requested documents are relevant to
secondary considerations of non-obviousness. However, the
extent to which Trustwave's sales reflect the commercial
success of Finjan's patents is very much at issue in the
lawsuit between Finjan and Trustwave, and that issue is
relevant to non-obviousness. Likewise, Finjan is probably
correct that whether Trustwave still sells products that
embody its patents “does not dispose of Finjan's
irreparable harm claims, ” but information need not be
dispositive to be discoverable, merely relevant.
alternatively argues that in the event the Court determines
that these documents are relevant, it should deny the motion
to compel anyway because Juniper has pending ESI requests
that may result in the production of these documents. The
Court finds that argument confusing. The Court is ordering
Finjan to produce responsive documents but not telling Finjan
how to do it. If Finjan can locate responsive documents
through an ESI search, it is free to produce them that way.
also argues that Juniper can subpoena some of this
information from Trustwave. However, party discovery is
typically easier and faster than non-party discovery.
Finjan asserted other objections in its RFP responses but
does not argue any of them in the letter brief. Accordingly,
the Court considers those objections waived.
Court ORDERS Finjan to produce
non-privileged documents responsive ...