SEGANLLC,

v.
ZYNGAINC.,
Plaintiff,
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
Civil Action No. 11-670-GMS
Defendant.
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ORDER
WHEREAS presently before the court is Zynga Inc.'s Motion to Dismiss (D.I. 17); and
WHEREAS the court has considered the parties' briefing, the parties' statements
regarding supplemental authority, and the applicable law;
IT IS HEREBY ORDERED THAT:
Zynga Inc.'s Motion to Dismiss (D.I. 17) is DENIED.
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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 complaint
states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). In patent cases, the law of the
regional 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 it
cannot 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 patent
infringement under 35 U.S.C. 271(a), that party must commit all the acts necessary to infringe the patent, either
personally 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
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method, either personally or through another acting under his direction or control. Direct infringement has not been
extended to cases in which multiple independent parties perform the steps of the method claim." !d. In the system
claim 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 a
plaintiff 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 to
deny Zynga's Motion to Dismiss is simplified by the allegations that Zynga "has used its own games on social
media (D.I. 14 at 'lfi6.) Such accessing of its own games is sufficient to have "put the invention into
service" 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 as
a whole and obtain benefit from it."). While the Federal Circuit has observed that "[i]n order to 'put the system into
service,' the end user must be using all portions of the claimed invention," it has also made clear that physical or
direct control of all the elements of a system is not required-the user must simply cause those elements to work for
their patented purpose. !d.
Zynga suggests that the express allegations of the First Amended Complaint preclude Segan's argument
that "Zynga, by using its own games on social media websites, uses the patented system by placing the system as a
whole 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, that
paragraph alleges only that: "For example, Defendant has use.d its own games on social media
websites." 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 invention
into service .... "
(!d. (internal citations omitted).) The court, however, cannot agree with Zynga on this point, as it must "construe the
complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the
complaint, the plaintiff may be entitled to relief" Phillips, 515 F.3d at 233. Viewing Segan's allegations in such a
light, the court finds that the First Amended Complaint sufficiently alleges that Zynga has engaged in direct
infringement at least through use of its own games on social media websites. (D.I. I4 at 'lfi6.) For this reason and
in light of Segan's compliance with Form I8's requirements, the court declines to dismiss the direct infringement
claim at this time.
Zynga also challenges the adequacy of Segan's indirect infringement claims, arguing that the First
Amended Complaint fails to allege the requisite underlying direct infringement or the necessary knowledge and
intent. (D.I. I8 at 10, I2.) On the direct infringement prong, the court fmds that Segan met its pleading obligations
by alleging that "on any given day 60,000,000 people (i.e., users) play Defendant's games on social websites" and
that the "games' users to put the invention into service, control the operation of the system as a whole, and obtain
benefit from that use." (D.I. 14 at 'lf'lf23, 27.) As noted above, the Federal Circuit has held "that to 'use' a system for
purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain
benefit 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 its
distinguishing argument is flawed. Zynga contends that:
Centillion ... does not control here, because the system claims [in] that case did not recite
limitations that expressly exclude user participation ... By its plain language, independent system
claim I requires that the user not interact with the claimed service provider. Put another way, the
user does not "put[] into service" the claimed service provider, because claim I expressly excludes
the 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 the
user not interact with the claimed service provider," as Zynga urges. Rather, the claim language appears to provide
only that two elements of the system do not "requir[e] user interaction with the service provider." The court
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Dated: May .1_, 2013
believes there is a subtle difference here. Moreover, even were the user prohibited from interacting with the service
provider, the court is unconvinced that such a limitation would necessarily remove this claim from the scope of the
rule announced in Centillion. In order to "use" a system under 271(a), a user need only cause the various
elements of the system to "work for their patented purpose"-physical or direct control over each element is not
required. Centillion, 631 F.3d at 124.
Finally, Zynga argues that Segan has failed to allege the requisite knowledge and intent for claims of
indirect infringement. Again, the court disagrees. "Liability for inducing infringement requires 'that the alleged
infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual
infringements."' Mallinckrodt Inc. v. E-Z-EM Inc., 670 F. Supp. 2d 349, 354 (D. Del. 2009) (quoting DSU Med.
Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1304 (Fed. Cir. 2006) (en bane)). "The requirement that the alleged infringer
knew or should have known his actions would induce actual infringement necessarily includes the requirement that
he or she knew of the patent." Id. To survive a motion to dismiss, the First Amended Complaint must contain facts
plausibly showing that Zynga specifically intended the games' users to infringe and knew that the users' acts
constituted infringement. See In re Bill of Lading, 681 F .3d at 1339.
The court believes Segan has met those requirements. The First Amended Complaint can be distinguished
from deficient complaints like the one at issue in Chalumeau Power Sys. LLC v. Alcatel-Lucent, No. 11-1175-RGA,
2012 WL 6968938 (D. Del. July 18, 2012). In Chalumeau Power Sys., Judge Andrews dismissed inducement
claims where "the [p ]laintiff allege[ d] actual knowledge and specific intent that others infringe, but there [were] only
insufficient factual assertions to support the legal conclusion of actual knowledge, and no factual assertions at all to
support the legal conclusion of specific intent." Id. at *1. In contrast, Segan has alleged that Zynga had knowledge
of the '928 Patent since at least June 30, 2011, when a letter attaching a full copy of the patent was sent to various
Zynga officers. (D.I. 14 at ~ ~ 12, 23.) Additionally, the First Amended Complaint contains several factual
assertions permitting a reasonable inference that Zynga acted with the requisite specific intent. (I d. a t ~ ~ 15, 23, 27.)
While it is not yet clear whether Zynga actually had this knowledge and intent, Segan is not required to "prove its
case at the pleading stage." See In re Bill of Lading, 681 F.3d at 1339.
The court further finds that Segan has stated an adequate claim for contributory infringement.
"Contributory infringement occurs if a party sells or offers to sell, a material or apparatus for use in practicing a
patented process, and that 'material or apparatus' is material to practicing the invention, has no substantial non-
infringing uses, and is known by the party 'to be especially made or especially adapted for use in an infringement of
such patent."' In re Bill of Lading, 681 F.3d at 1337. "As with induced infringement, a claim for contributory
infringement must also contain allegations of the requisite knowledge of the patent-in-suit at the time of
infringement." MONEC Holding AG v. Motorola Mobility, Inc., No. 11-798-LPS-SRF, 2013 WL 4340653, at *4
(D. Del. Sept. 20, 2012).
For the reasons already discussed in the inducement context, the court fmds that Segan has offered
sufficient allegations regarding Zynga's knowledge of the '928 Patent. (D.I. 14 a t ~ 12, 23.) The First Amended
Complaint also contains factual allegations allowing the court to draw the reasonable inference that Zynga was
aware that its games were "especially adapted for use in infringement" of the '928 Patent. Segan alleges that
"Defendant has specifically designed, developed, and acquired [its] on-line games for game players to use on target
websites," (Id. at ~ 15), and that "Defendant admits in its amended IPO statement that its games require game
players (users) to access the internet, Facebook (or any target website Zynga engages)," (Id. a t ~ 24). At this early
stage and construing the allegations in the light most favorable to Segan, the court simply cannot fmd its
contributory infringement claim to be implausible.
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