Finjan, Inc. v. Cisco Systems Inc.

          ORDER ON MOTIONS RE EXPERT REPORTS [RE: ECF 312; 319; 326; 365; 368]

          BETH LABSON FREEMAN UNITED STATES DISTRICT JUDGE

         Plaintiff Finjan, Inc. ("Finjan") brings this patent infringement lawsuit against Defendant Cisco Systems, Inc. ("Cisco"), alleging infringement of five of Finjan's patents directed to computer and network security. Before the Court are the following five motions regarding various disputes related to expert reports:

(1) Cisco's Motion to Strike Finjan's Expert Reports on Infringement in View of the Orders Dated June 11, 2019 and July 17, 2019. ECF 312.

(2) Finjan's Motion to Strike invalidity Theories from Expert Reports of Drs. Almeroth, Prakash, and McDaniel. ECF 319.

(3) Cisco's Motion to Strike Previously Undisclosed Damages Theories in Expert Reports of Dr. Anne Layne-Farrar and Dr. Ricardo Valerdi. ECF 326.

(4) Finjan's Motion to Strike Cisco's Supplemental Expert Report of Dr. Sylvia Hall-Ellis. ECF 365.

(5) Finjan's Administrative Motion for Leave to File Supplemental Material in Support of Finjan's Opposition to Cisco's Motion to Strike Previously Undisclosed Damages Theories in Expert Reports of Dr. Anne Layne-Farrar and Dr. Ricardo Valerdi and Response to New material and Argument in Cisco's Reply. ECF 368.

         The Court held a hearing on September 18, 2019 in connection with Finjan's Motion to Strike Invalidity Theories (ECF 319). Having reviewed the parties' briefing, the Court concludes that all motions are appropriate for disposition without oral argument. See Civ. L.R. 7-1(b). Accordingly, the hearings set for November 21, 2019 and January 23, 2020 are VACATED. The Court addresses each motion in turn.

         I. CISCO'S MOTION TO STRIKE FINJAN'S EXPERT REPORTS ON INFRINGEMENT (ECF 312)

         Cisco moves to strike portions of Finjan's expert reports on infringement. Mot. ECF 312. Specifically, Cisco seeks an order from this Court "striking from Finjan's expert reports any reliance on the services, technologies, and modules for which it was denied leave to amend [infringement contentions]." Id. at 2.

         A. Background

         On April 18, 2019, Finjan moved to supplement (or amend) its infringement contentions pursuant to Local Patent Rule 3-6. ECF 231. On June 11, 2019, Magistrate Judge van Keulen denied Finjan's motion and rejected its assertion that it was simply adding the names of particular components to its previous contentions regarding the associated functionality. ECF 274 ("SVK Order") at 6-7. Judge van Keulen explained that "Finjan's proposed amendments to identify components are significantly more complex and prejudicial than Finjan has portrayed them"- evidenced by the fact that "Finjan did not present its proposed amendments in the form of a redlined version of its existing Infringement Contentions, but instead as an entirely new, separate document." Id. at 7.

         Finjan sought relief from the SVK Order (again, without attaching a redlined version of its contentions), which this Court denied on July 17, 2019. ECF 304 ("BLF Order") at 3-4. The Court noted that it "would have expected Finjan to present a list of newly identified internal code names to be swapped out for less precise designations in the infringement contentions" and concluded that "Finjan has done nothing to persuade this Court that the true effect of its request is as benign as suggested in the moving papers." Id. at 3.

         Finjan has since served "three infringement reports totaling 6, 629 pages" on infringement. Mot. at 1. Cisco filed the present motion arguing that Finjan's expert reports "are replete with material that Finjan was not permitted to add into the case" pursuant to the SVK and BLF Orders. Id. at 3.

         B. Discussion

         i. Internal Code Names of Software Components

         Cisco argues that that Finjan's 6, 629 expert reports on infringement read as though the SVK and BLF Orders never issued and contain thousands of instances of internal names of software components, which Finjan sought (but failed) to add to its infringement contentions. Mot. at 3. Finjan does not dispute that its expert reports include the terms subject to the SVK and BLF Orders, but instead argues that "Cisco's reliance on the SVK and BLF Orders is misplaced" because neither Order "made reference to experts or expert reports, and they did not forbid Finjan from using information learned in discovery to support its existing infringement allegations." Opp'n at 4, ECF 323.

         Finjan's argument is meritless. It is well settled that "[e]xpert reports may not introduce theories not set forth in contentions." Huawei Techs., Co, Ltd v. Samsung Elecs. Co, Ltd., 340 F.Supp.3d 934, 946 (N.D. Cal. 2018) (citing Golden Bridge Tech. Inc. v. Apple, Inc., No. 12-cv-04882-PSG, 2014 WL 1928977, at *3 (N.D. Cal. May 14, 2014)). "Given the purpose behind the patent local rales' disclosure requirements, a party may not use an expert report to introduce new infringement theories [or] new infringing instrumentalities... not disclosed in the parties' infringement contentions ...." Verinata Health, Inc. v. Sequenom, Inc., No. C 12-00865 SI, 2014 WL 4100638, at *3 (N.D. Cal. Aug. 20, 2014) (citation omitted). Finjan was, of course, prohibited from including in its expert reports the theories it sought but failed to add to its infringement contentions by the SVK and BLF Orders.

         Finjan's main argument is that its expert reports identify "Cisco's confidential, internal terms used to describe the accused functionality at issue in its products" and therefore, Finjan could not have identified them when it served its last set of infringeinent contentions. Opp'n at 4. This issue is certainly common in patent infringement cases and is anticipated by Patent Local Rules, setting out the procedures for amending infringement contentions. See. Patent L.R. 3-6 ("Amendment of the Infringement Contentions ... may be made only by order of the Court upon a timely showing of good cause" such as "[r]ecent discovery of material[.]"). Thus, as Finjan recognized, its argument was more properly raised in a motion for leave to amend infringement contentions-not after expert reports are served. The problem for Finjan is that it has tried and failed twice to amend its infringement contentions to add these component names. See SVK Order at 7; BLF Older at 2-3. Finjan failed to carry its burden of showing diligence and lack of prejudice. See Apple Inc. v. Samsung Elecs. Co., No. CF 12-00630 LFTK, 2012 WL 5632618, at *2 (N.D. Cal. Nov. 15, 2012) ("The good cause inquiry" considers (1) whether the party seeking leave to amend acted with diligence and (2) whether there would be undue prejudice to the non-moving party). The Court declines to give Finjan a thud bite at this apple.

         Next, Finjan argues that Cisco's motion lacks "any analysis" and "is premised on a superficial word comparison, which has no bearing on whether there are actually new claims in the expert reports." Opp'n at 4. For its part, and "[f]or the Court's reference," Finjan attaches a 133-page document "mapp[ing] each of the 'terms' Cisco complains about from Finjan's infringement reports to Finjan's infringement contentions." Id.; ECF 322-4 ("Exhibit 1"). Cisco responds that Finjan "tries to re-litigate that issue by attaching a 100-page exhibit to its brief and declines to "take the bait to now dive into that 100-page exhibit as part of its 5-page reply[.]" Reply at 1, ECF 332. The Court sympathizes with Cisco's position and similarly declines to analyze Finjan's lengthy exhibit term by term. If nothing else, the length of Finjan's Exhibit 1 further confirms Judge van Keulen's assessment that "Finjan's proposed amendments to identify components are significantly more complex and prejudicial than Finjan has portrayed them." SVK Order at 7.

         It was Finjan's burden to demonstrate (in its motion for leave to amend infringement contentions) that "each of these internal and confidential component names were used to identify with greater specificity components and functionalities already accused of infringement in Finjan's Infringement Contentions[.]" See Opp'n at 4. Finjan failed to do so twice and does not get to try its hand for the third time by referencing its lengthy Exhibit 1-to which Cisco has no meaningful way of responding.

         Finally, Finjan asserts that "[i]t would be unfair and contrary to precedent to require that all internal component names and all evidence and proof of infringement be included in Infringement Contentions." Opp'n at 7. Be that as it may, Finjarr "may not use an expert report to introduce new infringement theories [or] new infringing instrumentalities" and therefore is required to persuade the Court that the additional internal code names and components are "the identification of additional evidentiary proof and not "new theories" of infringement. See Finjan, Inc. v. Symantec Corp., No. 14CV02998HSGJSC, 2018 WL 620169, at *2 (N.D. Cal. Jan. 30, 2018). Finjan had two opportunities to do so but missed those opportunities because it failed to provide a redline (or a list) identifying the code names and the corresponding accused products. As Judge van Keulen explained, "[s]imply put, without a redline, the Comt is imable to determine that Finjan's proposed amendments are limited to clarifying the existing contentions rather than expanding them." SVK Order at 7; see also BLF Order at 3. The Com1 has no choice but to assume that Finjan is unable to provide the now twice-requested redline or list because even Finjan's Exhibit l is not a redlined version of its infringement contentions. See Exhibit 1.

         Finjan claims that its "mapping demonstrates that Finjan provided Cisco with notice of the specific contentions and Finjan's expert reports merely expound on those contentions with further evidence." Opp'n at 1. The Court disagrees. As an example, the Court has reproduced below, Finjan's "mapping" of Aegis, one of the 69 terms at issue:

         EXHIBIT I (Image Omitted)

         ECF 322-4 at 1. Even if the Court was inclined to parse through Finjan's lengthy Exhibit 1-which the Court declines to do-the above example demonstrates that contrary to Finjan's assertions, it is not self-evident from Exhibit 1 whether Aegis is a component of an ...