Finjan, Inc. v. Juniper Network, Inc.

Filing 648

ORDER RE 634 REQUEST FOR ATTORNEY'S FEES. SIGNED BY JUDGE ALSUP. (whalc2, COURT STAFF) (Filed on 1/9/2021)

Case 3:17-cv-05659-WHA Document 648 Filed 01/09/21 Page 1 of 5

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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FINJAN, INC.,
Plaintiff,

United States District Court
Northern District of California

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No. C 17-05659 WHA

v.
JUNIPER NETWORK, INC., et al.,

ORDER RE REQUEST
FOR ATTORNEY’S FEES

Defendants.

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INTRODUCTION
Following affirmance by the United States Court of Appeals for the Federal Circuit of the

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rulings in this patent infringement suit, the prevailing defendant moves for attorney’s fees.

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Because this case did stand out as exceptional in certain respects, a limited award of attorney’s

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fees under 35 U.S.C. § 285 is warranted.

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STATEMENT
Patent owner Finjan, Inc. filed this infringement suit in September 2017, asserting several

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patents against Juniper Network, Inc. Motion practice led to the “patent showdown.” Each

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party chose its strongest patent claim, Finjan its best case for infringement and Juniper its best

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case for noninfringement or invalidity, and moved for early summary judgment in June 2018.

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Juniper prevailed on noninfringement of claim 1 of U.S. Patent No. 6,804,780 and though

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Finjan largely prevailed on infringement of claim 1 of U.S. Patent No. 8,677,494, disputes of

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fact remained. So we set a jury trial on that claim for December 2018. Before trial, however,

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Daubert motions excluded Finjan’s damages expert. So Finjan attempted to present a facts-

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only damages case at trial (which was permissible if competent evidence was presented). After

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hearing the evidence, though, the Court awarded judgment as a matter of law to Juniper on

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damages. Worse for Finjan, the jury then returned a noninfringement verdict. Eventually this

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was all affirmed on appeal.

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The patent showdown proceeded to the next set of claims. In May 2019, Juniper

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prevailed, unopposed, on noninfringement of most accused products for claim 9 of the ’780

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patent, and for those remaining accused products, Finjan’s infringement case fell apart because

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it hadn’t provided adequate notice of the patent to Juniper under 35 U.S.C. § 287. Then, after
the construction of a term from claim 1 of U.S. Patent 8,141,154 appeared to preclude

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United States District Court
Northern District of California

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infringement, the undersigned ordered the parties to show cause why summary judgment of

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noninfringement should not be entered. A following order later in July entered such summary

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judgment for Juniper. Just over a week later, Finjan stipulated to dismissal with prejudice ofa

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all remaining patent claims.

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Finjan then appealed aspects of both rounds of the showdown (including trial in the first

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round). The Federal Circuit, following full briefing and oral argument, summarily affirmed.

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Juniper now moves for attorney’s fees. This order follows full briefing and oral argument (held

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telephonically due to COVID-19).

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ANALYSIS

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“The court in exceptional cases may award reasonable attorney fees to the prevailing

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party.” 28 U.S.C. § 285. An exceptional case “stands out from others with respect to the

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substantive strength of a party’s litigating position (considering both the governing law and the

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facts of the case) or the unreasonable manner in which the case was litigated.” It is a totality of

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the circumstances inquiry committed to the court’s sound discretion. Octane Fitness, LLC v.

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ICON Health & Fitness, Inc., 572 U.S. 545, 554 (2014); Elect. Commc’n Tech. v.

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ShoppersChoice.com, 963 F.3d 1371, 1377 (Fed. Cir. 2020).

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Losing, in itself, does not make a case exceptional. More is required. In many respects,
however, this case was exceptional. For one example, Finjan’s first-round ’494 patent damages
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fiasco wasted a great deal of everyone’s time and energy. After discovering its infringement

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theory covered only a minute portion of Juniper’s revenue base, on the eve of trail Finjan flip

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flopped and came up with a new infringement theory, one which would capture more of

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Juniper’s products and inflate the target revenue base. Finjan tried to sneak this theory in with

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its expert-damages report, but we caught it, and the Daubert order excluded that trick.

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Undaunted, Finjan pressed ahead and tried to present to the jury a facts-only damages

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case. Finjan, however, utterly failed. In one instance, a Finjan executive attempted to testify to

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what it would have sought from Juniper in negotiations, prejudicial testimony patently

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irrelevant to the question of the hypothetical royalty that two reasonable parties might have
agreed to. This stunt earned Finjan a stern caution from the Court and a limiting instruction to

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United States District Court
Northern District of California

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the jury, striking the testimony (Dkt. No. 336 at 276–78, 290–294). More broadly, Finjan made

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no effort at trial to allocate the target revenue base between allegedly infringing product

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functions and noninfringing functions. Put simply, Finjan’s facts-only damages case at trial

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evinced the same flaws that got its expert-damages report thrown out, artificially attempting to

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inflate revenue to which it would be entitled, assuming its infringement case succeeded before

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the jury. After hearing this case, then, the Court struck Finjan’s “woefully inadequate” damages

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case for the ’494 patent (Dkt. No. 339 at 837–39). Atop that, the expired patent could not

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support an injunction. So the whole song and dance came to nothing, even before the jury later

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rejected the merits of the infringement claim. The entire assertion of the ’494 patent thus stood

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out as exceptional.

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For another example, Finjan should have dropped the ’780 patent after that first round

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patent showdown, which granted Juniper summary judgment of noninfringement on claim 1 on

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the construction of the phrase “performing a hashing function.” Undeterred, Finjan kept the

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“substantially overlap[ping]” claim 9, which included the same “performing a hashing function”

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limitation, in the running for the second round of the showdown and even expanded the scope

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of accused products. Yet when Juniper moved for summary judgment against claim 9, Finjan

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failed to oppose as to a majority of the accused products. Just as both parties have a joint duty

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to frame dispositive issues with good judgment, each party has an individual duty to continually
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reevaluate the viability of its claims. Finjan shirked its end of both of those duties and again

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wasted everyone’s time and energy in instigating this motion aspect. Finjan v. Juniper, 387 F.

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Supp. 3d 1004, 1014 (N.D. Cal. 2019).

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Finjan’s case as to the few remaining accused products, which turned on whether it had
provided actual or constructive notice (through product marking) of the ’780 patent to Juniper

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before its expiration, suffered its own unforced errors. On the constructive notice front, Finjan

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attempted to relitigate concessions it had already made to the Court in previous hearings. Then

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on the actual notice front, Finjan misrepresented, though perhaps not intentionally at least

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recklessly, a favorable district court decision as having been affirmed on those relevant grounds

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by the Federal Circuit when, in fact, it had not been. Id. at 1014–16. And so, Finjan’s assertion

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United States District Court
Northern District of California

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of the ’780 patent stands out as exceptional as well.

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On the other hand, it cannot be said that every aspect of this case stood out. Juniper

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complains that Finjan ignored previous adverse claim constructions regarding the ’154 patent

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by other tribunals, but Finjan had every right to distinguish and even argue against earlier non-

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binding claim constructions by the Patent Trial and Appeals Board and unpublished Federal

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Circuit memoranda. Indeed, this Court disagreed with prior claim constructions from another

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esteemed judge of this district in ruling for Juniper on the “performing a hashing function”

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limitation of claim 1 of the ’780 patent (Dkt. No. 180 at 9). “[T]he rule of law embodies

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evenhandedness, and ‘what is sauce for the goose is normally sauce for the gander.’” Nat’l Inst.

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of Fam. & Life Advs. v. Becerra, 585 U.S. ___, 138 S. Ct. 2361, 2385 (2018) (Breyer, J.,

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dissenting) (quoting Heffernan v. City of Paterson, 578 U.S. ___, 136 S. Ct. 1412, 1418

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(2016)). On this point at least, Juniper has little, if any, right to complain.

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Other considerations weigh against a complete award of fees here. After all, shifting of

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attorney’s fees deviates from the “‘American Rule’ that each party in a lawsuit ordinarily shall

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bear its own attorney’s fees . . . .” Hensley v. Eckerhart, 461 U.S. 424, 429 (1983). Juniper’s

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attempts to analogize to Straight Path continually miss this point. Even there, where the

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undersigned found as exceptional the patent owner’s contrary and simultaneous arguments to

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this Court and the Federal Circuit, the fee award remained limited narrowly to time spent
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defending against the specific patents tainted by that misconduct. That same caution in fee

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shifting remains appropriate here. See 411 F. Supp. 3d at 1035; 2020 WL 2539002 at *3.

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In addition, though Juniper highlights the Federal Circuit’s summary affirmance of the

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merits of both chapters of our case as evidence in its favor, this order hesitates to adopt an

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interpretation of “exceptional” that inhibits a party’s right of appeal. Indeed, a recent

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nonprecedential decision of the Federal Circuit similarly cautioned parties against reading

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exceptionality into a summary affirmance. See Innovation Sciences v. Amazon.com, No. 2020-

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1639, 2021 WL 28216 at *3 (Fed. Cir. Jan. 5, 2021).

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Last, this order notes that although Juniper characterizes Finjan’s record here as zero-fornine (asserted patents), we only litigated three asserted patents to any substantive rulings, the

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United States District Court
Northern District of California

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’494, the ’780, the ’154 patents. True enough; it took two rounds of summary judgment and

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one jury trial. In the end, however, when it came time to litigate the remaining six patents,

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Finjan voluntarily dismissed them with prejudice. Juniper may have a colorable argument that

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Finjan should have done so sooner. But on this record this order cannot conclude that the delay

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stood out as exceptional.

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CONCLUSION

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This order holds as exceptional Finjan’s assertion of the ’494 and ’780 patents, but it

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awards no fees yet. Juniper’s submitted billing records do not distinguish between work

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eligible for reimbursement and work not. So, Juniper shall resubmit its records and take care to

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submit only for time spent on the ’494 and ’780 patents, which truly deserves compensation,

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and at reasonable billing rates. The Court may treble the deduction of inappropriate requests, or

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may deny fees altogether. The Court is inclined to appoint a special master to resolve

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remaining disputes. A companion order will set out the procedure going forward.

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IT IS SO ORDERED.
Dated: January 9, 2021.

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WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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