498 F.3d 1373 (Fed. Cir. 2007), 2006-1503, BMC Resources, Inc. v. Paymentech, L.P.

Docket Nº:2006-1503.
Citation:498 F.3d 1373
Party Name:BMC RESOURCES, INC., Plaintiff-Appellant, v. PAYMENTECH, L.P., Defendant-Appellee.
Case Date:September 20, 2007
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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498 F.3d 1373 (Fed. Cir. 2007)

BMC RESOURCES, INC., Plaintiff-Appellant,


PAYMENTECH, L.P., Defendant-Appellee.

No. 2006-1503.

United States Court of Appeals, Federal Circuit.

September 20, 2007

Appealed from: United States District Court for the Northern District of Texas Judge Barbara M.G. Lynn

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[Copyrighted Material Omitted]

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Christopher R. Benson, Fulbright & Jaworski L.L.P., of Austin, Texas, argued for plaintiff-appellant. With him on the brief were Jeffrey D. Mills; J. Jeffery Richardson, of Dallas, Texas. Of counsel was Michael R. Krawzsenek, of Austin, Texas.

John M. Cone, Hitchcock Evert, LLP, of Dallas, Texas, argued for defendant-appellee.

Daralyn J. Durie, Keker & Van Nest LLP, of San Francisco, California, for amicus curiae, Comcast Cable Communications LLC. With him on the brief were Mark A. Lemley and Matthias A. Kamber.

John Kenneth Felter, Goodwin Procter LLP, of Boston, Massachusetts, for amicus curiae, Freedom Wireless, Inc. With him on the brief was Kevin P. Martin.

Before RADER, GAJARSA, and PROST, Circuit Judges.

RADER, Circuit Judge.

BMC Resources, Inc. (BMC) appeals the district court's decision on summary judgment that Paymentech, L.P. (Paymentech) does not infringe asserted claims from two patents owned by BMC. The court determined that Paymentech had not infringed the claims because it performed some but not all of the steps of the asserted method claims. Because the record contains no basis to hold Paymentech vicariously responsible for the actions of the unrelated parties who carried out the other steps, this court affirms the finding of non-infringement.


BMC is the assignee of two patents, U.S. Patent Nos. 5,718,298 (the '298 patent) and 5,870,456 (the '456 patent). These patents claim a method for processing debit transactions without a personal identification number (PIN). The patented invention provides an interface between a standard touch-tone telephone and a debit card network. On this interface, a customer may perform real-time bill payment transactions with only a telephone keypad. The invention includes an interactive voice response unit (IVR) that prompts the caller to enter an access code, account number, debit card number, and payment amount. This information, in turn, passes to a debit network and on to a banking or financial institution. Each of these entities participates in approving and carrying out the transaction. Using the invention, the caller may also obtain information regarding authorization for the transaction, and inquire about previously processed transactions. Thus, BMC's patents disclose a method for PIN-less debit bill payment (PDBP) featuring the combined action of several participants, including the payee's agent (for example, BMC), a remote payment network (for example, an ATM network), and the card-issuing financial institutions.

Paymentech processes financial transactions for clients as a third party. In 2002, Paymentech began marketing PDBP services. Paymentech processes a PDBP transaction according to the following sequence:

1. the customer calls the merchant to pay a bill using an IVR;

2. the merchant collects payment information from the customer and sends it to Paymentech;

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3. Paymentech routes the information to a participating debit network;

4. the debit network forwards the information to an affiliated financial institution;

5. the financial institution authorizes or declines the transaction, and if authorized, charges the customer's account according to the payment information collected by the merchant; and

6. information regarding the status of the transaction moves from the financial institution to the debit network and then, through Paymentech, to the merchant who informs the customer of the status of the transaction.

This action began when BMC learned of Paymentech's offer to provide PDBP services to its clients. BMC then demanded that Paymentech obtain a license to use the patented technology. Paymentech refused and, as a preemptive measure, filed suit in federal district court seeking a declaration of non-infringement with respect to the BMC patents. BMC counterclaimed for infringement of the '456 patent. After the parties were realigned, BMC, as plaintiff, amended its complaint to allege infringement, both direct and by inducement, of the '456 and the '298 patents. Paymentech, as defendant, filed a counterclaim seeking a declaration of non-infringement and invalidity of the '298 patent. Paymentech also sought a declaration of non-infringement and invalidity with respect to a third patent, U.S. Patent No. 5,652,786 (the '786 patent). The trial court dismissed that claim for lack of subject matter jurisdiction because Paymentech could not prove it had objectively reasonable apprehension of being sued for infringement of the '786 patent. BMC Resources, Inc. v. Paymentech, L.P., No. 3-03-CV-1927-M (N.D. Tex. May 5, 2004).

The parties subsequently filed summary judgment motions relating to infringement. BMC alleged that Paymentech directly infringed claim 7 of the '456 patent and claim 2 of the '298 patent. Claim 7 depends from claim 6 of the '456 patent. Claims 6 and 7 claim:

6. A method of paying bills using a telecommunications network line connectable to at least one remote payment card network via a payee's agent's system wherein a caller begins session using a telecommunications network line to initiate a spontaneous payment transaction to payee, the method comprising the steps of:

prompting the caller to enter a payment number from one or more choices of credit or debit forms of payment;

prompting the caller to enter a payment amount for the payment transaction;

accessing a remote payment network associated with the entered payment number,

the accessed remote payment network determining, during the session, whether sufficient available credit or funds exist in an account associated with the payment number to complete the payment transaction,

and upon a determination that...

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