Wolf Run Hollow, LLC v. State Farm Bank, F.S.B.

The allegation that State Farm Bank operated a secure online portal did not provide a reasonable inference of patent infringement.

Opinion (Zagel): Wolf Run Hollow, LLC ("Wolf Run") sued State Farm Bank, F.S.B. ("State Farm Bank") alleging the Bank's secure online portal infringed Wolf Run's patent. State Farm Bank moved to dismiss for failure to state a claim. Wolf Run alleged that State Farm Bank infringed the patent by securing communications on the online portal by implementing public key encryption based on Secure Sockets Layer technology (SSL). Wolf Run's patent contemplates that encryption will performed using “software transmitted to the sender by the recipient.” SSL performs encryption using preexisting software in the sender's existing web browser. To survive a motion to dismiss, the plaintiff must allege sufficient facts that, when accepted as true, present a claim that is plausible on its face and which would entitle the plaintiff to relief. The court found that Wolf Run's specific allegation, that State Farm Bank uses SSL to encrypt it online portal, did not show that the online portal infringed the patent because SSL does not perform encryption in the manner required by the pleading's description of the patent. The court further found that when the SSL allegations were removed, the complaint did not specify how State Farm Bank's online portal infringed the patent, but merely asserted the legal conclusion that infringement must have occurred in some manner. The court held that the allegation that State Farm Bank operated a secure online portal did not provide a reasonable inference of infringement of Wolf Run's patent, especially where the use of SSL facially suggests that the online portal did not infringe the meets and bounds of the patent. Because the allegations in the complaint did not permit a reasonable inference of infringement, the court granted State Farm Bank's motion to dismiss without prejudice, and will allow Wolf Run the opportunity to file an amended complaint that pleads sufficient facts to state a valid claim.