Case 4:22-cv-00561-JSW Document 85 Filed 11/22/22 Page 1 of 15
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`CYPH, INC.,
`
`Plaintiff,
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`v.
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`ZOOM VIDEO COMMUNICATIONS,
`INC.,
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`Defendant.
`
`
`
`Case No. 22-cv-00561-JSW
`
`
`ORDER GRANTING, IN PART, AND
`DENYING, IN PART, MOTION TO
`DISMISS FIRST AMENDED
`COMPLAINT
`Re: Dkt. No. 54
`
`
`Now before the Court for consideration is the motion to dismiss filed by Zoom Video
`Communications, Inc. (“Zoom”). The Court has considered the parties’ papers, relevant legal
`authority, and the record in this case, and it HEREBY GRANTS, IN PART, AND DENIES, IN
`PART, Zoom’s motion, with leave to amend.
`BACKGROUND
`The Court recited the factual background underlying this patent infringement dispute in its
`Order granting, in part, Zoom’s motion to dismiss Plaintiff Cyph, Inc.’s (“Cyph”) original
`complaint. See Cyph, Inc. v. Zoom Video Commc’ns, Inc., 2022 WL 1556417, at *1 (N.D. Cal.
`May 17, 2022). In brief, Cyph alleges Zoom uses end-to-end encryption technology in its
`products and services and could not have provided that technology without practicing the
`inventions claimed in six of Cyph’s United States patents: No. 9,948,625 (the “’625 Patent”), No.
`10,701,047 (the “’047 Patent”), No. 10,020,946 (the “’946 Patent”), No. 9,794,070 (the “’070
`Patent”), No. 10,003,465 (the “’465 Patent”), and No. 9,954,837 (the “’837 Patent”) (collectively
`the “Asserted Patents”).1
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`Cyph originally alleged that Zoom infringed U.S. Patent No. 9,906,369, but it has dropped
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`Case 4:22-cv-00561-JSW Document 85 Filed 11/22/22 Page 2 of 15
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`The Court concluded that Cyph sufficiently identified the accused products. However, it
`granted Zoom’s motion to dismiss because it determined Cyph’s allegations did “nothing more
`than allege Zoom infringes by reciting the relevant claim language verbatim” and did not include
`any allegations that “the actions of Zoom’s customers can be attributed to Zoom.” Cyph, 2022
`WL 1556417, at *3-*4. Because Cyph failed to state a claim for direct infringement, the Court
`dismissed its claims for contributory and induced infringement. Id.
`Cyph has amended to include allegations about non-party Keybase, and about how
`Keybase products allegedly infringe the claims of the relevant patents. (FAC ¶¶ 41-47, 58-64,
`119-133.)2 By reference to several Zoom publications, Cyph also provides additional detail on
`how Zoom Products allegedly infringe the claims of the Asserted Patents. (See FAC ¶¶ 18-22, 48-
`57, 69-70, 76, 82, 85, 94, 100, 107, 111.) Cyph also alleges that the term “‘User,’ as recited in the
`claims of the Asserted Patents corresponds to the ‘Front-end Component’ or ‘Client’ as defined in
`the Cyph System Architecture as described in the Specification of each of the Asserted Patents.”
`(Id., ¶ 21.) Although there are references to human “users” in the Specification, Cyph alleges that
`the term “User” as recited in the claims does not refer to a “human or any other entity not under
`Cyph’s control.’” (Id.; see also e.g., FAC Ex. A, ‘625 patent, col. 3, ll. 21-26.)
`ANALYSIS
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`A.
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`Applicable Legal Standards.
`Zoom again moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). A
`motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the pleadings
`fail to state a claim upon which relief can be granted. A court’s “inquiry is limited to the
`allegations in the complaint, which are accepted as true and construed in the light most favorable
`to the plaintiff.” Lazy Y Ranch Ltd. v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). Even under the
`liberal pleading standard of Rule 8(a)(2), “a plaintiff’s obligation to provide ‘grounds’ of his
`‘entitle[ment] to relief’ requires more than labels and conclusions, and formulaic recitation of the
`
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`the claims regarding that patent. The claims relating to the ’837 Patent are asserted only against
`Keybase, Inc, which Zoom acquired in May 2020. (See FAC, ¶ 3.)
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`Exhibit R to the FAC is a red-line version showing the amendments. (Dkt. No. 47-17.)
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`elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
`(citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Pursuant to Twombly, a plaintiff cannot
`merely allege conduct that is conceivable but must instead allege “enough facts to state a claim to
`relief that is plausible on its face.” Id. at 570. “A claim has facial plausibility when the plaintiff
`pleads factual content that allows the court to draw the reasonable inference that the defendant is
`liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly,
`550 U.S. at 556).
`In a patent case, a plaintiff cannot satisfy the pleading standards set forth in Twombly and
`Iqbal “by reciting the claim elements and merely concluding that the accused protect has those
`elements. There must be some factual allegations that, when taken as true, articulate why it is
`plausible that the accused product infringes the patent claim.” Bot M8 LLC v. Sony Corp. of Am.,
`4 F.4th 1342, 1353 (Fed. Cir. 2021) (internal quotations and citations omitted).3 A patentee “need
`not prove its case at the pleadings stage”; it also is not required “to plead infringement on an
`element-by-element basis.” Id. at 1352; see also Phonometrics, Inc. v. Hospitality Franchise Sys.,
`Inc., 203 F.3d 790, 794 (Fed. Cir. 2000). Instead, the patentee must allege sufficient facts to
`“place the potential infringer on notice of what activity is being accused of infringement.” Bot
`M8, 4 F.4th at 1352. “The level of detail required in any given case will vary depending upon a
`number of factors, including the complexity of the technology, the materiality of any given
`element to practicing the asserted claim(s), and the nature of the allegedly infringing device.” Id.
`at 1353.
`If the allegations are insufficient to state a claim, a court should grant leave to amend,
`unless amendment would be futile. See, e.g., Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th
`Cir. 1990); Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th
`Cir. 1990). However, if a plaintiff has previously amended a complaint, a court has “broad”
`discretion to deny leave to amend. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir.
`
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`Prior to 2015, a patentee generally could satisfy the requisite pleading standards by
`3
`utilizing Form 18. However, that year the Supreme Court abrogated the form. See, e.g., Lifetime
`Indus., Inc. v. Trim Lock, Inc., 869 F.3d 1372, 1376-77 (Fed. Cir. 2017).
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`Case 4:22-cv-00561-JSW Document 85 Filed 11/22/22 Page 4 of 15
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`1990) (quoting Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989)).
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`B.
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`The Parties’ Evidence.
`As a general rule, “a district court may not consider any material beyond the pleadings in
`ruling on Rule 12(b)(6) motion.” Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994), overruled
`on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1119 (9th Cir. 2002) (citation
`omitted). However, the Court may consider “documents incorporated into the complaint by
`reference, and matters of which [the Court] may take judicial notice.” Tellabs, Inc. v. Makor
`Issues & Rights, Ltd., 551 U.S. 308, 322-23 (2007).
`Zoom submits two exhibits to support its motion, each of which are cited in Cyph’s claim
`charts as providing support for its infringement contentions: an excerpt from Keybase Book Proofs
`(“Proofs”); and a Zoom white paper entitled “E2E Encryption for Zoom Meetings” version 3.2
`dated October 29, 2021 (“E2Ev.3.2”). (Dkt. No. 54-1, Declaration of Andrew T. Jones, ¶¶ 3-4,
`Exs. A-B.) Cyph does not dispute that those documents are authentic, and it relies on each of
`those documents to support its claims. Therefore, the Court considers them under the
`incorporation by reference doctrine.
`Cyph submitted three exhibits with its opposition to support its arguments regarding the
`claims of the ’047 Patent: two excerpts from Wikipedia pages and a dictionary definition of the
`term “technique.” (Dkt. No. 58, Declaration of Carl I. Brundidge, ¶¶ 3-5., Exs. 1-3.) Because the
`Court did not rely on any of these documents, it denies Cyph’s request as moot.
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`C.
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`The Court Grants, in Part, and Denies, in Part, Zoom’s Motion to Dismiss the Direct
`Infringement Claims.
`1.
`Single Actor.
`Each of the Asserted Patents are directed to methods or systems and methods. “Direct
`infringement under § 271(a) occurs where all steps of a claimed method are performed by or
`attributable to a single entity.” Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020,
`1022 (Fed. Cir. 2015). When method claims are at issue and more than one actor is involved “in
`practicing the steps, a court must determine whether the acts of one are attributable to the other
`such that a single entity is responsible for the infringement.” Id. In Akamai, the Federal Circuit
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`determined that may occur: (1) when an “entity directs or controls others’ performance”; or “(2)
`where the actors form a joint enterprise.” Id.
`Zoom argues that the patents differentiate between the “front-end component” and the
`“user” of that component, which renders Cyph’s allegations implausible because a single entity
`does not perform each step of the claimed methods. As set forth above, Cyph alleges the term
`“user” does not refer exclusively to a human and alleges that, as used in the claims, “user”
`“corresponds to the ‘Zoom Client’ in the Zoom System Architecture [because] the ‘User’ and the
`‘Zoom Client’ perform the same or similar functions in the respective System Architectures.”
`(See, e.g., FAC, ¶ 66; Ex. G, at 5 n.1.) That is, Cyph argues that the term can also be construed to
`apply to Zoom’s software. Therefore, according to Cyph, it is plausible for “User” to be the
`“Front-End Component” that Zoom would control.
`In Bot M8, the Federal Circuit noted that even though a plaintiff is not required to prove its
`case at the motion to dismiss stage, there may be times when the plaintiff “may subject its claims
`to early dismissal by pleading facts that are inconsistent with the requirements of its claims.” 4
`F.4th at 1346 (citing Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1348-50 (Fed. Cir. 2018)). A
`plaintiff needs to allege claims that are “plausible” and not merely possible. Twombly, 550 U.S. at
`570 (emphasis added). Here, Cyph does not plausibly allege the term “user” is software written
`and controlled by Zoom. For example, in the ’625 patent specification, Cyph states that devices
`can be used to provide feedback to a “user” in “any form of sensory feedback” such as visual,
`auditory, or tactile feedback. (FAC Ex. A, ’625 patent, col. 9, ll. 27-28.) Cyph also stated that an
`input from “the user can be received in . . . acoustic, speech, or tactile” form. (Id., col. 9, ll. 31-
`32.) Cyph argues this language demonstrates it is plausible to read “Front-end Component,” as
`used in the claims, as software. However, Cyph’s own patent states that a front-end component is
`“a client computer” not software. (Id., col. 9, l. 37.) In addition, it is not plausible that software
`can provide or would need visual, auditory or tactile feedback.
`Accordingly, the Court concludes Cyph has not sufficiently alleged that the term “user”
`encompasses software controlled by Zoom and fails to allege that Zoom practices each step of the
`method claims in the Asserted Patents. Therefore, the Court GRANTS, IN PART, Zoom’s motion
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`to dismiss, as applied to the ’625 Patent, the ’047 Patent, the ’070 Patent, the ’465 Patent and the
`’837 Patent. The Court notes that the single actor analysis does not apply to the ’946 patent,
`which does not use the term “user” in the claims. The Court provides Cyph leave to amend, with
`direction to point to specific portions of the patent claims and specifications that make it plausible
`to read “user” to enable Zoom to practice each step of the claimed methods.
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`2.
`Individual Patents.
`Even though it seems as though “user” does not plausibly read as software, many of
`Cyph’s other allegations are sufficient to state a claim for relief. Therefore, while Cyph must still
`correct the deficiencies regarding the term “user,” the Court addresses Zoom’s other arguments.
`The Federal Circuit, in Bot M8, criticized a “blanket element-by-element pleading standard
`for patent infringement,” favoring instead a flexible inquiry into “whether the factual allegations in
`the complaint are sufficient to show that the plaintiff has a plausible claim for relief.” 4 F.4th at
`1352. In its review of the district court’s ruling, the Federal Circuit determined the critical
`elements of each patent and looked to see whether the complaint included specific factual
`allegations to meet those claim elements. For instance, the Federal Circuit determined that two of
`the patents required a control device that executed a fault inspection program before the game was
`started. Id. at 1355. The Federal Circuit then determined that the plaintiff sufficiently alleged
`infringement because it “identifie[d] specific error messages that are displayed” when faults were
`detected. Id. For another patent, the Federal Circuit determined that the claims required “gaming
`information including a mutual authentication program on the same memory.” Id. at 1354
`(internal quotation marks omitted). The court then determined that the plaintiff did not satisfy the
`pleading standard because it “did not plausibly allege that gaming information and a mutual
`authentication program are stored together on the same memory.” Id. at 1355 (emphasis in
`original).
`In accordance with the Federal Circuit’s approach in Bot M8, this Court will identify the
`critical elements of each of the Asserted Patents and then determine whether Cyph has provided
`specific factual allegations to meet those claim elements, placing Zoom on notice of what activity
`is being accused of infringement. See Bot M8, 4 F.4th at 1352.
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`a.
`The ’625 patent.
`The ’625 patent claims an Encrypted Group Communication Method where, in order “to
`begin” and facilitate “a communication session among a group of users,” a first user generates a
`symmetric key that the first user then distributes to each user in the group, and “additional users
`are added to the existing communication system when the first user distributes . . . the generated
`shared symmetric key.” (FAC Ex. A, ’625 patent, col. 10, ll. 20-35.)
` Zoom argues that Cyph’s allegations are insufficient because Cyph cites to documents that
`establish an additional user is added using a new key, not the existing key. Further, Zoom argues
`the cited documents state that end-to-end encryption only allows participants in a given meeting to
`have access to the encrypted communication, and that therefore, it would be impossible to add a
`new user. Zoom’s arguments fail for two reasons.
`First, Cyph’s claim charts provide direct quotes from Zoom publications that put Zoom on
`notice as to what Cyph alleges infringes its patents. With regards to the claim limitation of adding
`new users, Cyph cites to the E2E-v3.2 paper which describes new participants joining the meeting
`when they “have access to the shared meeting key MK” allowing each user to “encrypt and
`decrypt meeting streams accordingly.” (FAC, ¶ 66; Ex. G, at 3.) The claim charts identify the
`MK key as generated when the meeting leader first joins the meeting, and the leader then has “the
`responsibility of generating the shared meeting key . . . and distributing keys.” (Ex. G, at 4.) This
`statement makes it plausible that in Zoom’s products a first user generates a symmetric key that
`the user can then distribute to additional users to join the meeting.
`Further, Zoom’s contention that a new key must be generated any time an additional user is
`added is not reflected in the documentation cited. The E2E-v3.2 document states that “[t]he leader
`should trigger a rekey whenever a participant enters or leaves [a] meeting.” (E2Ev3.2, at 16.)
`(emphasis added). While Zoom argues that its products require a new key to add a user, the
`document’s language merely seems to suggest, rather than to require, that the leader generate a
`new key. Accordingly, Cyph sufficiently alleges infringement of the ’625 patent, and the Court
`DENIES Zoom’s motion to dismiss this claim.
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`b.
`The ’070 patent.
`The ’070 patent claims a Method of Ephemeral Encrypted Communications where a first
`user asks a server to open a communication session, the server assigns the communication session
`a unique ephemeral communication session identifier, the first user sends the session identifier to a
`second user over a “second communication channel,” which the second user then uses to join the
`session. (FAC Ex. D, ’070 patent, col. 10, ll. 30-51.)
`Zoom argues that Cyph does not plausibly allege the use of a “second communication
`channel” to transmit the session identifier because the excerpts that Cyph cites to in its Claim
`Charts do not mention a second communication channel.
`The Court agrees with Zoom that Cyph’s quotations in the Claim Chart do not provide
`notice as to what comprises the “second communication channel” within Zoom’s products. The
`Claim Chart contains three different quotations that reference verifying a phone number,
`generating an MK key, and discuss who is responsible for generating and distributing keys. (FAC,
`¶ 97; Ex. J, at 3.) None of these quotes references a “second communication channel.”
`In its opposition brief, Cyph points to language from the Zoom E2E-v3.2 paper that it
`argues could support its allegations that the Accused Products include a first and second
`communication channel. Cyph acknowledges that this language was not cited in its Claim Chart
`and seeks leave to amend. “It is axiomatic that the complaint may not be amended by the briefs in
`opposition to a motion to dismiss.” Frenzel v. AliphCom, 76 F. Supp. 3d 999, 1009 (9th Cir.
`2014). Accordingly, the Court GRANTS Zoom’s motion to dismiss this claim. Because the Court
`cannot say it would be futile, it will grant Cyph leave to amend.
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`c.
`The ’837 patent.
`The ’837 patent claims a method of Multi-Factor Authentication During Encrypted
`Communications where a first user and a second user can communicate with each other after each
`user validates the other’s identification when a “one-on-one encryption message [is] directly sent .
`. . through [a] second [communication] channel.” (FAC Ex. N, ’837 patent, col. 10, ll. 22-31.)
`The second communication channel can be either a Short Message Service (SMS) channel, a
`Multimedia Messaging Service (SMS) channel, an email channel, or a social media service
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`channel.” (Id., col. 10, ll. 31-35.)
`Zoom argues that Cyph does not identify a Zoom product that sends a direct message
`through a second communication channel to verify an identity. Zoom argues that Cyph merely
`points to social media or other web accounts that users can use to verify each other. Zoom
`emphasizes that the “Proofs” that Cyph cites to are “static links” and not direct communications
`between two users.
`The Court agrees with Zoom. Cyph alleges that Zoom’s “Keybase Proofs” would satisfy
`the claim element of a “second communication channel.” (FAC, ¶ 125; Ex. P, at 3.) However, the
`Proofs document does not reference anything resembling a communication channel. Rather, the
`documents instruct that the best way to verify a Keybase account “is to tell [someone else] in
`person” or, alternatively, to check the “other social accounts” of the user to verify that the
`accounts match. (FAC, Ex. P, at 3.) Neither of these forms of verification involve a message
`being sent through a communication channel, which is a required element of the claim.
`Cyph does not provide any convincing argument as to why the claim limitations are
`present in the Zoom products. Cyph merely points the Court to the claim limitations it laid out in
`the ’625 and ’070 patents, but neither shows the direct message claim limitation present in the
`Zoom products. Accordingly, the Court GRANTS Zoom’s motion to dismiss this claim, with
`leave to amend.
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`d.
`The ’465 patent.
`Claim 1 of the ’465 patent claims a Method of Encrypting Authentication Information
`when a first user generates a shared symmetric key to exchange authentication information, then
`said first user distributes the shared key to each communicating party, and the other users can then
`exchange authentication information using the symmetric key. (FAC Ex. E, ’465 patent, col. 11,
`ll. 50-58.) The shared symmetric key is generated using an “out-of-band communication.” (Id.,
`col. 12, l. 6.)
`Zoom argues Cyph’s allegations about this patent are insufficient because, like the ’837
`patent, Cyph does not allege a second communication channel used to exchange authentication
`information. However, Zoom’s argument is misplaced. First, “second communication channel” is
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`the critical element in the ’837 patent but that term cannot be found in claim 1 of the ’465 patent.
`Second, the record suggests the communication channels claimed in the ’837 patent and the ’465
`patent may not be used for the same purposes. For example, the “out-of-band communications” in
`the ’465 patent are used to “generate a shared symmetric key,” while the “second communication
`channel of the ’837 patent is used to authenticate another user. (Compare ’465 patent, col. 12, l.
`6., with ’837 patent, col. 10, ll. 22-31.)
`Further, Cyph has pointed to specific factual content in the E2E-v3.2 publication that puts
`Zoom on notice as to what it is accused of infringing. (FAC, ¶ 103; Ex. K.) For example, to meet
`the claim limitation “distributing the generated shared symmetric key to each communicating
`party in the communications group,” Cyph points to section 3.4 of the E2E-v3.2 paper which
`states that the “Meeting leader” “will have the responsibility of generating the shared meeting key
`. . . and distributing keys.” (FAC, Ex. K, at 2.) The other parts of the claim chart similarly satisfy
`Cyph’s pleading responsibility. Accordingly, the Court DENIES Zoom’s motion to dismiss this
`claim.
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`e.
`The ’047 patent.
`The ’047 patent claims an Encrypted Group Communication Method where a first user
`generates a shared symmetric key to start “a long-lived session,” and the first user distributes the
`key to each user in the group. (FAC Ex. B, ’047 patent, col. 10, ll. 17-24.) The users in the group
`can then communicate with encryption, with each encrypted group communication comprising “a
`short-lived secure communication system.” (Id., col. 10, ll. 25-34.)
`Zoom argues that Cyph’s allegations are implausible because Cyph attempts to tie an end-
`to-end encryption meeting with the Zoom chat encryption, two products that are, allegedly,
`incompatible with each other. Zoom’s argument fails for two reasons. First, Zoom relies on
`statements made in the E2E-v3.2 paper. However, Cyph relies on the Zoom Security Guide from
`February 2021 for the claim limitation in question, not the E2E-v3.2 paper. The Zoom Security
`Guide states that “Advanced chat encryption allows for a secured communication where only the
`intended recipient can read the secured message.” This statement makes it plausible that a chat
`can be encrypted within an encrypted meeting.
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`Second, regardless of whether Zoom’s argument is correct, it is a merits argument not
`suitable for disposition at the motion to dismiss stage. At the motion to dismiss stage, courts
`analyze whether there are “factual allegations that, when taken as true, articulate why it is
`plausible that the accused product infringes the patent claim.” Bot M8, 4 F.4th at 1353 (emphasis
`added). Here, Cyph alleges that Zoom’s products read on the claim limitations because the Zoom
`Security Guide describes Zoom Chat as a “feature of Zoom Meetings that enable users to chat and
`share files one-one or in groups.” (FAC, ¶ 79; Ex. H, at 1.) Taking Cyph’s allegations as true, a
`chat feature within a Zoom meeting reads on the claim limitations of a short-lived communication
`system within a long-lived session. Accordingly, the Court DENIES Zoom’s motion to dismiss
`this claim.
`
`f.
`The ’946 Patent.
`The ’946 patent claims a Multi-Key Encryption Method where a client computing device
`downloads an encrypted data block that includes a server-stored symmetric key, and the client
`computing device then decrypts the data block with a previously stored symmetric key. (FAC Ex.
`C, ’946 patent, col. 10, ll. 25-32.) The client computer then generates a new shared-symmetric
`key, creates a new encrypted data block, transmits the data block to the servers, wherein the server
`decrypts and overwrites the old server symmetric key with the new key. (Id., col. 11, ll. 32-43.)
`Zoom argues that Cyph’s claimed method requires storing a decrypted key on a server,
`something that is fundamentally antithetical to the idea of end-to-end encryption. Specifically,
`Zoom alleges that its end-to-end encryption requires keys to always remain hidden from a server
`while Cyph’s patent allows a server to decrypt and store a key.
`Similar to its argument for the ’047 patent, Zoom presents a merits argument, rather than
`an argument about the sufficiency of the allegations. Further, Cyph’s ’946 claim chart provides
`specific references to Keybase documents that identify the Zoom products that allegedly read on
`the claim terms. (FAC, ¶ 130; Ex. Q.) For example, for the claim limitation of “generating a new
`shared-symmetric key” Cyph points to the “Keybase Block” document, which includes the
`statement that “[o]nce she has established keys as above, Alice can start encrypting blocks.” (Ex.
`Q, at 3.) This is sufficient at the motion to dismiss stage to put Zoom on notice of the allegedly
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`infringing activity. See Bot M8, 4 F.4th at 1353. Accordingly, the Court DENIES Zoom’s motion
`to dismiss this claim.
`
`D.
`
`The Court Grants Zoom’s Motion to Dismiss the Indirect Infringement Claims.
`Cyph’s complaint alleges two theories of indirect infringement: (1) induced infringement
`under 35 U.S.C. § 271(b), and (2) contributory infringement under 35 U.S.C. § 271(c).
`
`1.
`Induced Infringement.
`Under 35 U.S.C. § 271(b), “[w]hoever actively induces infringement of a patent shall be
`liable as an infringer.” 35 U.S.C. § 271(b). “To prevail on inducement, the patentee must show,
`first that there has been direct infringement, and second that the alleged infringer knowingly
`induced infringement and possessed specific intent to encourage another's infringement.” Kyocera
`Wireless Corp. v. ITC, 545 F.3d 1340, 1353–54 (Fed.Cir.2008) (quoting Minn. Mining & Mfg. Co.
`v. Chemque, Inc., 303 F.3d 1294, 1304–05 (Fed.Cir.2002)).
`
`Zoom argues that Cyph cannot allege indirect infringement because Cyph’s direct
`infringement theory relies on Zoom performing all infringing steps. Cyph argues that it did plead
`indirect infringement, as well as direct infringement, because it alleged that third party account
`owners “enable (i.e. turn-on) end-to-end encryption for meetings.” (FAC, ¶ 50.)
`“Liability for indirect infringement of a patent requires direct infringement by a third
`party.” Fortinet, Inc. v. Forescout Techs., Inc., 543 F. Supp. 3d 814, 836 (N.D. Cal. 2021)
`(internal quotations omitted). Cyph claims that third parties infringe the patents by simply
`enabling/turning on the Zoom programs. However, Cyph relies on a theory that Zoom performs
`all essential steps of the method claims to support its claim that Zoom directly infringes the
`Asserted Patents. (See, e.g., FAC, ¶ 54 (“All of the steps and/or functions of E2EE encryption . . .
`are performed by the Zoom System Architecture including the Zoom Client and Servers, not a
`human or any other entity not under Zoom’s control . . . .”)) That theory appears inconsistent with
`its claims for induced infringement. Further, Cyph does not appear to plead these claims in the
`alternative. See, e.g., Fed. R. Civ. P. 8(d)(2). Accordingly, the Court GRANTS Zoom’s motion,
`but it will grant Cyph leave to amend.
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`Case 4:22-cv-00561-JSW Document 85 Filed 11/22/22 Page 13 of 15
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`2.
`
`The Court Grants Zoom’s Motion to Dismiss the Contributory Infringement
`Claims.
`Zoom also argues that Cyph’s allegations of contributory infringement are deficient
`because they consist of conclusory assertions that simply recite legal standards. Under 35 U.S.C.
`section 271(c), “[w]hoever offers to sell or sells within the United States . . . a component of a
`patented machine . . . for use in practicing a patented process” is liable for contributory
`infringement if: (1) the component constitutes “a material part of the invention”; (2) the alleged
`infringer knows that the component is “especially made or especially adapted for use in an
`infringement of [the] patent”; and (3) the component is “not a staple article or commodity of
`commerce suitable for substantial noninfringing use.” 35 U.S.C. § 271(c). To state a claim
`for contributory infringement, “a plaintiff must, among other things, plead facts that allow an
`inference that the components sold or offered for sale have no substantial non-infringing uses.” In
`re Bill of Lading Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1337 (Fed. Cir.
`2012).
`
`Here, Cyph’s allegations relating to contributory infringement consists of one assertion:
`“[u]pon information and belief” the Accused Products “constitute a material part of the Asserted
`claims and are not staple articles or commodities of commerce suitable for substantial non-
`i