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Segan LLC v. Zynga Inc., C.A. No. 11-670-GMS (D. Del. May 2, 2013)

Segan LLC v. Zynga Inc., C.A. No. 11-670-GMS (D. Del. May 2, 2013)

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SEGANLLC,
v.
ZYNGAINC.,
Plaintiff,IN THE UNITED STATES DISTRICT
COURTFOR
THE DISTRICT OF
DELAWARE
Civil Action No. 11-670-GMSDefendant.
))))))))))
ORDER
WHEREAS presently before the court is Zynga
Inc.'s
Motion to Dismiss (D.I. 17); andWHEREAS the court has considered the parties' briefing, the parties' statementsregarding supplemental authority, and the applicable law;IT
IS
HEREBY ORDERED THAT:Zynga
Inc.'s
Motion to Dismiss (D.I. 17) is DENIED.
1
1
Zynga Inc. ("Zynga") seeks dismissal pursuant to Rule 12(b)(6)
ofthe
Federal Rules
of
Civil Procedure,which provides for dismissal where the plaintiff "fail[s] to state a claim upon which relief can be granted." Fed.
R.
Civ. P. 12(b)(6). In considering a motion to dismiss, the court "accept[s] all factual allegations
as
true, construe[s]the complaint in the light most favorable to the plaintiff, and determine[s] whether, under any reasonable reading
of
the complaint, the plaintiff may be entitled to relief."
Phillips
v.
Cnty.
of
Allegheny,
515 F.3d 224, 233 (3d Cir.2008). The touchstone
of
the pleading standard is plausibility.
Bistrian
v.
Levi,
696 F.3d 352 365 (3d Cir. 2012).The "complaint must plead 'enough factual matter' that, when taken as true, 'state[s] a claim to relief that
is
plausible on its face."'
In re Bill
of
Lading Transmission
&
Processing
Sys.
Patent Litig.,
681
F.3d 1323,
1331
(Fed. Cir. 2012) (quoting
Bell
At!.
Corp.
v.
Twombly,
550 U.S. 544, 570 (2007)). "Determining whether a complaintstates a plausible claim for relief will
...
be a context-specific task that requires the reviewing court to draw on itsjudicial experience and common sense."
Ashcroft
v.
Iqbal,
556 U.S. 662, 679 (2009). In patent cases, the law
of
theregional circuit governs a motion to dismiss.
See In re Bill
of
Lading,
681
F.3d at 1331.In its First Amended Complaint, Segan LLC ("Segan") alleges direct infringement, inducement
of
infringement, and contributory infringement
ofU
S. Patent No. 7,054,928 (the
"'928
Patent"). (D.I.
14
at
mJ
14-31.)The '928 Patent itself contains two independent claims: a system claim and a method claim. Zynga contends that itcannot possibly directly infringe either the system or method claims
of
the '928 Patent. (D.I.
18
at 1.) Specifically,it argues that while these claims require activity
by
multiple actors, "for a party to be liable for direct patentinfringement under 35 U.S.C.
§
271(a), that party must commit all the acts necessary
to
infringe the patent, eitherpersonally or vicariously."
Akamai Techs., Inc.
v.
Limelight Networks, Inc.,
692 F.3d 1301, 1307 (Fed. Cir. 2012)."In the context
of
a method claim, that means the accused infringer must perform all the steps
of
the claimed
Case 1:11-cv-00670-GMS Document 24 Filed 05/02/13 Page 1 of 3 PageID #: 294
 
method, either personally or through another acting under his direction or control. Direct infringement has not beenextended to cases in which multiple independent parties perform the steps
of
the method claim."
!d.
In the systemclaim context, direct infringement by "use"
under§ 27l(a)
"requires a party
...
to use each and every
...
element
of
a claimed [system]."
Centillion Data Sys.,
LLC
v.
Qwest Commc'ns lnt'l, Inc.,
63I F.3d I279, I284 (Fed. Cir.
20II).
While the court recognizes that motions to dismiss like the present one raise complex legal issues and that aplaintiff cannot always take refuge in its compliance with Form
I8's
pleading requirements,
see, e.g., Pragmatus
AV,
LLC
v.
Yahoo! Inc.,
No. II-902-LPS-CJB,
20I2
WL 6044793, at
*5
(D. Del. Nov. 13, 20I2), its decision todeny Zynga's Motion
to
Dismiss
is
simplified
by
the allegations that Zynga "has used its own games on socialmedia
websites~"
(D.I.
14
at 'lfi6.) Such accessing
of
its own games
is
sufficient to have "put the invention intoservice" and constituted "use" under 35 U.S.C. § 27I(a).
See Centillion Data Sys.,
631
F.3d at I284 ("We hold that
to
'use' a system for purposes
of
infringement, a party must put the invention into service,
i.e.,
control the system asa whole and obtain benefit from it."). While the Federal Circuit has observed that "[i]n order to 'put the system intoservice,' the end user must be using all portions
of
the claimed invention," it has also made clear that physical ordirect control
of
all the elements
of
a system is not
required-the
user must simply cause those elements to work fortheir patented purpose.
!d.
Zynga suggests that the express allegations
of
the First Amended Complaint preclude Segan's argumentthat "Zynga,
by
using its own games on social media websites, uses the patented system by placing the system as awhole into service." (D.I. 20 at 6 n.2 (quoting D.I. I9 at
IO).)
Zynga argues:Although Segan cites to paragraph
I6
in the Amended Complaint as support for its claim, thatparagraph alleges only that: "For example, Defendant has
use.d
its own games on social mediawebsites." Nowhere does the Amended Complaint allege that by using its own games, Zynga"uses the patented system by placing the system
as
a whole into service,"
as
Segan claims.Rather, the Amended Complaint alleges only that the
users
of
Zynga's games "put the inventioninto service
....
(!d.
(internal citations omitted).) The court, however, cannot agree with Zynga on this point, as it must "construe thecomplaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading
of
thecomplaint, the plaintiff may be entitled to
relief"
Phillips,
515 F.3d at 233. Viewing Segan's allegations in such alight, the court finds that the First Amended Complaint sufficiently alleges that Zynga has engaged in directinfringement at least through use
of
its own games on social media websites. (D.I.
I4
at 'lfi6.) For this reason andin light
of
Segan's compliance with Form
I8's
requirements, the court declines to dismiss the direct infringementclaim at this time.Zynga also challenges the adequacy
of
Segan's indirect infringement claims, arguing that the FirstAmended Complaint fails
to
allege the requisite underlying direct infringement or the necessary knowledge andintent. (D.I. I8 at 10, I2.)
On
the direct infringement prong, the court fmds that Segan met its pleading obligationsby alleging that
"on
any given day 60,000,000 people
(i.e.,
users) play Defendant's games on social websites" andthat the "games' users
to
put the invention into service, control the operation
of
the system as a whole, and obtainbenefit from that use." (D.I.
14
at
'lf'lf23,
27.)
As
noted above, the Federal Circuit has held "that to
'use'
a system forpurposes
of
infringement, a party must put the invention into service,
i.e.,
control the system as a whole and obtainbenefit from it."
Centillion,
63I F.3d at I284. Here, Segan alleges that the games' users do precisely that.While Zynga challenges the applicability
of
Centillion
to the claims at issue here, the court believes itsdistinguishing argument
is
flawed. Zynga contends that:
Centillion
...
does not control here, because the system claims [in] that case did not recitelimitations that expressly
exclude
user participation
...
By
its plain language, independent systemclaim I requires that the user
not
interact with the claimed service provider. Put another way, theuser does not "put[] into service" the claimed service provider, because claim I expressly excludesthe user from interacting with the service provider. As such, the user cannot directly infringe,because the user does not use all parts
of
the claimed system.(D.I. 20 at 7-8.) The court first notes that it
is
not entirely clear that "independent system claim I requires that theuser
not
interact with the claimed service provider," as Zynga urges. Rather, the claim language appears
to
provideonly that two elements
of
the system
do
not "requir[e] user interaction with the service provider." The court
2
Case 1:11-cv-00670-GMS Document 24 Filed 05/02/13 Page 2 of 3 PageID #: 295

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