Finjan, Inc. v. Proofpoint, Inc. et al

Filing 290

Order by Hon. Haywood S. Gilliam, Jr. GRANTING 236 Finjan's Motion to Require Defendants' to Conform to the Court's November 14, 2014 Case Management Order and Strike Theories Not Disclosed in Invalidity Contentions. (hsglc3S, COURT STAFF) (Filed on 12/23/2015)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

FINJAN, INC.,
Plaintiff,

8
v.

9
10

PROOFPOINT, INC., et al.,
Defendants.

United States District Court
Northern District of California

11

Case No. 13-cv-05808-HSG
ORDER GRANTING PLAINTIFF’S
MOTION TO REQUIRE DEFENDANTS
TO CONFORM TO COURT’S 11/14/2014
CASE MANAGEMENT ORDER AND
STRIKE THEORIES NOT DISCLOSED
IN INVALIDITY CONTENTIONS
Re: Dkt. No. 236

12

Pending before the Court is Plaintiff’s Motion to Require Defendants to Conform to the

13

Court’s November 14, 2014 Case Management Order and Strike Theories Not Disclosed in the

14

Invalidity Contentions, Dkt. No. 236.

15
16
17
18
19
20

Given that the parties are familiar with the factual and procedural background of this
action, the Court refers the unfamiliar reader to the Court’s earlier orders, see Dkt. Nos. 138, 271,
and repeats facts here only as necessary.
I.

LEGAL STANDARD
“The Northern District of California’s Patent Local Rules exist to further the goal of full

and timely discovery and provide all parties with adequate notice and information with which to

21

litigate their cases.” Verinata Health, Inc. v. Sequenom, Inc., No. C 12-00865 SI, 2014 WL

22

4100638, at *1 (N.D. Cal. Aug. 20, 2014) (internal quotation marks omitted). “The rules are

23
24
25

designed to require parties to crystallize their theories of the case early in the litigation and to
adhere to those theories once they have been disclosed.” Id.
Patent Local Rule 3-3 requires that a defendant serve invalidity contentions that contain:

26
27

(a) The identity of each item of prior art that allegedly anticipates
each asserted claim or renders it obvious. . . .

28

(b) Whether each item of prior art anticipates each asserted claim or

renders it obvious. If obviousness is alleged, an explanation of why
the prior art renders the asserted claim obvious, including an
identification of any combinations of prior art showing obviousness;

1
2

(c) A chart identifying where specifically in each alleged item of
prior art each limitation of each asserted claim is found, including
for each limitation that such party contends is governed by 35
U.S.C. § 112(6), the identity of the structure(s), act(s), or material(s)
in each item of prior art that performs the claimed function; and

3
4
5

(d) Any grounds of invalidity based on 35 U.S.C. § 101,
indefiniteness under 35 U.S.C. § 112(2) or enablement or written
description under 35 U.S.C. § 112(1) of any of the asserted claim

6
7

A district court has wide discretion in enforcing the Patent Local Rules. SanDisk Corp. v.
8
Memorex Prods., Inc., 415 F.3d 1278, 1292 (Fed. Cir. 2005).
9
10

II.

ANALYSIS
Plaintiff makes two arguments. First, it contends that Defendants exceeded the permitted

United States District Court
Northern District of California

11
12

number of theories in their expert report, construing the Court’s scheduling order, Dkt. No. 98, as
limiting Defendants’ obviousness combinations to the specific combinations per patent that

13
Defendants explicitly identified in their Preliminary and Final Election. The Court agrees and
14
provides the following guidance.
15
16
17

1. The Court’s scheduling order, Dkt. No. 98, governs the references Defendants present at
trial as well as the references and theories that Defendants’ experts present. This specifically
includes the scheduling order’s limitation on the number of asserted references.

18
2. The Court concludes that a subset of an obviousness combination constitutes a different
19
combination. That is to say, obviousness combination A+B+C+D is not the same as the
20
combination A+B. At this late stage in the litigation, Defendants are limited to the exact
21
combinations of references identified in their final election:
22

25

Patent
’844 Patent
’086 Patent
’918 Patent
’918 Patent

26

Mixing and matching references from a broad “menu,” as Defendants suggest they seek

23
24

Obviousness Combinations
Abadi, Ji, Necula, ThunderBYTE, and Isaak
Abadi, Isaak, Ji, Necula, ThunderBTYE
Kramer, Satish, Joshi, Jensen, Erlingsson, Trend Micro
Miller, Satish, Joshi, Kramer, Jensen, Erlingsson, Trend Micro

27

to do, would not advance the scheduling order’s goal of narrowing the issues before trial to a

28

manageable number of specific obviousness combinations of which both parties have explicit
2

notice. Cf. Defendants’ Opposition, Dkt. No. 273, at 2 (criticizing Plaintiff’s position because it

2

“would limit [Defendants’ expert] from . . . relying on references in the alternative (for instance, A

3

+ B + C or D)”). Nor would it advance the Patent Local Rules’ purpose of increasing efficiency

4

and streamlining the litigation process. See generally Thought, Inc. v. Oracle Corp., No. 12-CV-

5

05601-WHO, 2013 WL 5587559, at *4 (N.D. Cal. Oct. 10, 2013) (rejecting defendant’s prior art

6

references limitation proposal as “not limited enough,” after plaintiff contended the proposed limit

7

was “effectively meaningless for purposes of streamlining the litigation”). Defendants’ generic

8

assertion that precluding them from relying on some number of as-yet-unidentified permutations

9

would “unduly constrain [the expert’s] role as an expert in providing independent opinions on

10

validity,” Dkt. No. 273. at 1, is not well taken: there is no prejudice, let alone undue prejudice,

11
United States District Court
Northern District of California

1

that results from providing fair notice in advance of trial regarding the theories Defendants

12

actually plan to present. See In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303,

13

1310-13 (Fed. Cir. 2011) (upholding district court’s claim limitation procedure where plaintiff had

14

initially asserted 1,975 claims and “merely asserted ‘the generalized notion that 64 was too few

15

[claims]’” (alteration in original); “[t]hat sort of global claim of impropriety is unpersuasive”). No

16

purpose other than obfuscation would be served by a refusal at this late date to identify and be

17

limited to specific theories as required by the Court’s scheduling order.

18

The Court has broad discretion to limit the scope of trial in a patent case in order to keep a

19

complex case manageable for the jury. Id. at 1313; see also Stamps.com Inc. v. Endicia, Inc., 437

20

F. App’x 897, 900 (Fed. Cir. 2011) (unpublished) (affirming district court’s reduction of 629

21

claims in 11 patents to 15 claims total). If Defendants claim they would be prejudiced at trial if

22

they are precluded from asserting some additional subset of the references identified in the final

23

election, Defendants must identify, and seek leave to assert, those specific subsets. The Court will

24

closely evaluate the reasonableness of any such request with regard to whether it is consistent with

25

the goal of narrowing the parties’ trial preparation and presentation to a reasonable number of

26

clearly-delineated, clearly-noticed theories that present unique issues of invalidity. The Court

27

emphasizes that any request to add a specific subset of a remaining obviousness combination must

28

be supported by good cause and a detailed explanation for its need. See In re Katz, 639 F.3d at
3

1

1312-13; Thought, 2013 WL 5587559, at *4 (ordering defendants to file a narrowed final election

2

of prior art and permitting defendants to seek relief from these limits upon a showing of good

3

cause). Such identification, if any, must be filed by January 4, 2016 and not exceed 10 pages.
Second, Plaintiff contends that Defendants’ expert report includes patent eligibility and

4
5

indefiniteness theories that were not included in Defendants’ supplemental invalidity contentions

6

submitted on June 8, 2015. Dkt. No. 273-2, Ex. A. It requests that the Court preclude

7

Defendants’ expert from asserting new theories under 35 U.S.C. §§ 101, 112(1), 112(2). Dkt. No.

8

236 at 6-7.
Defendants contend that its use of exemplary claims should not limit Defendants to only

9

those claims. Dkt. No. 273 at 3. It contends that it “generally reserved its right to assert claims as

11
United States District Court
Northern District of California

10

invalid under Section 101.”1 Id. The Court disagrees. The efficacy of the Patent Local Rule 3-

12

3(d) —requiring invalidity contentions to identify “[a]ny grounds of invalidity based on 35 U.S.C.

13

§ 101, indefiniteness under 35 U.S.C. § 112(2) or enablement or written description under 35

14

U.S.C. § 112(1) of any of the asserted claims”—would be a nullity if parties could address it with

15

a broad reservation. Such a general disclaimer would be contrary to the local rule’s requirement

16

that parties crystallize their theories early in the litigation.
The Court agrees that Defendants’ supplemental invalidity contentions did not identify the

17
18

following theories:

19

35 U.S.C. § 101, Patentable Subject Matter:

20

The ’305 Patent

Claims 2 and 5

21

The ’086 Patent

Claims 17 and 24

22

The ’408 Patent

Claims 9 and 21

23

35 U.S.C. § 112(2), Indefiniteness:

24

The ’844 Patent

“first rule set” (Claims 15 and 16)

25
26
27
28

1

See Dkt. No. 273, Ex. A at 5-6 (“Defendants also reserve the right to challenge any of the claim
terms herein under 35 U.S.C. § 112, including by arguing that they are indefinite, not supported by
the written description, not enabled, or fail to disclose the best mode contemplated by the
inventor(s). Accordingly, nothing stated herein shall be construed as a waiver of any argument
available under 35 U.S.C. §§ 101, 102, and 112.”).
4

1
2
3
4
5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18

The ’086 Patent

“suspicious computer operations”
(Claims 17 and 24)

35 U.S.C. § 112(2), Written Enablement:
“a rule-based content scanner that communicates with
said database of parser and analyzer rules, operatively
coupled with said network interface, for scanning
incoming content received by said network interface
to recognize the presence of potential computer
exploits therewithin” (Claim 1)
The ’305 Patent
“a network traffic probe, operatively coupled to said
network interface and to said rule-based content
scanner, for selectively diverting incoming content
from its intended destination to said rule-based content
scanner” (Claim 1)
“a Downloadable scanner coupled with said received
for deriving security profile data for the
Downloadable, including a list of suspicious computer
operations that may be attempted by the
Downloadable” (Claim 24)
The ’086 Patent
“a transmitter coupled with said receiver and with said
Downloadable scanner, for transmitting the
Downloadable and a representation of the
Downloadable security profile data to a destination
computer” (Claim 24)
Defendants’ arguments to the contrary are unavailing. Defendants argue that Plaintiff
“cannot show the differences in scope between claims 17 and 35 of the [’086 Patent] are such that
it was (as admits) on notice for Section 101 purposes on the latter but not the former.” Dkt. No.

19
273 at 3. But regardless of any alleged similarity between Claims 17 and 35, Defendants may not
20
at this late stage assert a previously undisclosed claim on the basis of its similarity to a disclosed
21
22

claim. Likewise, it is not enough that Defendants identified “first rule set” under elements for
written description or that they identified “suspicious computer operations” as parts of larger

23
phrases. Finally, that Defendants disclosed theories under § 112(6) does not constitute a
24
disclosure under § 112(2).
25
Per the local rules, Defendants have the burden to list any grounds for invalidity on the
26
basis of §§ 101, 112(1), or 112(2) early in the litigation so as to provide structure to discovery and
27
to allow the parties to move efficiently toward the eventual resolution of their dispute. Because
28
5

1

Defendants failed to previously disclose these theories, the Court strikes them from the expert

2

report and precludes the expert from relying on them in trial.

3
4

IT IS SO ORDERED.
Dated: 12/23/2015

5
________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
6