Cyph, Inc. v. Zoom Communication, Inc.

Background

Cyph alleged that its founders developed an end-to-end encryption technology for confidential online communications. It claimed that Zoom’s products and services—including Zoom Meetings, Zoom Marketplace, Zoom Video Webinars, Zoom Chat, Zoom Phone System, Zoom Events, Zoom Rooms and Workspaces, and Zoom Developer Program—infringed six identified patents. Cyph alleged direct infringement, induced infringement, and contributory infringement.

Zoom moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not state a legally sufficient claim. The court explained that a patent complaint must contain enough factual allegations to make infringement plausible and to notify the accused party what conduct is alleged to infringe. A plaintiff does not have to prove infringement or plead every patent element in detail at this stage, but it cannot merely repeat patent-claim language and conclude that the accused product contains those elements.

Court’s Analysis

The court rejected Zoom’s argument that Cyph failed to identify the accused products. It concluded that Cyph had sufficiently identified the products and services it claimed were infringing.

The court nevertheless found that Cyph had not adequately alleged how the products infringed the asserted patents. The complaint and attached claim charts largely recited claim limitations and stated that Zoom products contained them. The court found that the cited Zoom materials did not supply enough additional information about how the products operated to support the allegations. It also found that Cyph had not adequately explained whether Zoom, rather than Zoom’s customers, performed each step of the claimed methods or how customer conduct could be attributed to Zoom under the governing patent-infringement standard.

Because induced and contributory infringement claims require an underlying act of direct infringement, the court granted the motion to dismiss those claims as well. The court stated that it could not conclude amendment would be futile and therefore granted Cyph leave to amend.

Disposition

Judge White ordered that Zoom’s motion to dismiss was granted in part and denied in part. Cyph could file an amended complaint by June 6, 2022, and Zoom was required to answer or otherwise respond by June 27, 2022. The court also continued the initial case-management conference from June 3 to July 8, 2022, and set the parties’ conference statement deadline for July 1, 2022.