Western Union Co. v. Moneygram Payment Sys. Inc., 2010-1080

• Decision Date: 07 December 2010
• Docket Number: 2010--1210,2010-1080
• Parties: THE WESTERN UNION COMPANY, Plaintiff-Appellee, v. MONEYGRAM PAYMENT SYSTEMS, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

THE WESTERN UNION COMPANY, Plaintiff-Appellee,

v.MONEYGRAM PAYMENT SYSTEMS, INC., Defendant-Appellant.

2010-1080

2010--1210

United States Court of Appeals for the Federal Circuit

Decided: December 7, 2010

Appeal from the United States District Court for the Western District of Texas in Case No. 07-CV-0372, Judge Sam Sparks.

DAVID E. Sipiora, Townsend and Townsend and Crew LLP, of Denver, Colorado, argued for plaintiff-appellee. With him on the brief were iAN L. SAFFER, AMANDA L. Swaim and Kevin M. Bell.

WILLIAM F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, Massachusetts, argued for defendant-appellant. With him on the brief were JOSEPH J. MUELLER, MEGAN BARBERO and SYDENHAM B. ALEXANDER, Ill; and William G. McElwain, of Washington, DC. Of counsel on the brief were MARTIN R. LUECK and Emmett J. Mcmahon, Robins, Kaplan, Miller & Ciresi LLP, of Minneapolis, Minnesota.

Before Rader, Chief Judge, and Lourie and Prost, Circuit Judges.

Lourie, Circuit Judge.

MoneyGram Payment Systems, Inc. ("MoneyGram") appeals from the final judgment of the United States District Court for the Western District of Texas in favor of the Western Union Company ("Western Union"). A jury found infringement of certain claims of U.S. Patents 6, 488, 203 (the "'203 patent"); 6, 502, 747 (the "'747 patent"); 6, 761, 309 (the "'309 patent"); and 7, 070, 094 (the "'094 patent"), and found those patents not invalid for obviousness. The district court denied MoneyGram's renewed motion for judgment as a matter of law ("JMOL") on infringement and invalidity of the asserted patents. Western Union Co. v. MoneyGram Int'l, Inc., No. 1:07-cv-00372, Dkt. No. 429 (W.D. Tex. Nov. 17, 2009) ("JMOL Opinion"). Because we find that the asserted claims in the patents in suit would have been obvious to a person of ordinary skill in the art at the time of filing, we reverse.

Background

Western Union owns the '203, '747, '309, and '094 patents directed to a system for performing money transfers. The '203, '747, and '309 patents (collectively, the "send patents") specifically relate to methods of sending money through a financial services institution ("FSI"). The '094 patent claims methods for receiving transferred money. The patented system relates to money transfer services such as those offered by Western Union through retail locations where a customer may identify a recipient and tender an amount to be delivered to the recipient.

The money transfer service collects the amount from the retail location and completes the transaction for the customer. Some of the traditional money transfer systems required money senders to fill out forms with transaction information such as recipient information and the amount of money to be transferred. The '203 patent claims a method of performing a formless money transfer using an electronic transaction fulfillment device ("ETFD"). Figure 1 from the '203 patent depicts an embodiment of the patented system.

Figure 1 of the '203 patent

In the patented system, a customer has telephone access to the customer service representative ("CSR") at thefinancial institution, who obtains details of the transfer and "stages" the money transfer for the customer, storing the transaction details on a host computer (18). The customer is later able to complete the transaction at a retail location where an agent is able to retrieve the transaction from the computer (18) through an ETFD (22) and accept the required amount of money from the customer. Claim 1 is representative of the patented invention:

1. A method of performing a money transfer send transaction, the method comprising:

providing a sender direct access to an employee of a financial services institution in order to receive transaction details from the sender;

storing, on a data base, the transaction details provided by the sender, wherein the transaction details include a desired amount of money to be sent by the sender to a recipient;

establishing a code that corresponds to the transaction details stored on the data base, wherein the code is established for use by the sender during the send transaction;

storing the code on the data base such that the code is useable to identify the send transaction on the data base;entering the code into an electronic transaction fulfillment device in communication with the data base to retrieve the transaction details from the data base after the step of storing the code on the data base; and

determining a collect amount, to be collected from the sender, based on the transaction details;

wherein the code is not provided by or to the recipient for use by the recipient during the send transaction.

'203 patent, claim 1 (emphases added).

Claim 12 is dependent on claim 1 and adds the limitation that an employee of the money transfer business provides the transaction identifying code. Claim 16, which is also dependent on claim 1, adds the limitation of collecting the money from the sender, notifying the database of the collection, and recording the transaction as complete. The '203 patent was filed on October 26, 1999 and issued on December 3, 2002. The '747 patent, also filed in 1999, and the '309 patent, filed in 2004, are both continuations of the '203 patent. The '309 patent claims are similar and substantially identical in scope to the '203 patent claims. The '747 patent primarily adds the use of internet-based communications, using an internet communications protocol ("the TCP/IP protocol"), to the money transfer system and claims the use of a "first computer" instead of "the data base" used in the '203 patent. Claim 20 is illustrative:

20. A method of performing a money transfer send transaction through a financial services institution, the method comprising:

receiving transaction details on a first computer of the financial services institution, wherein the transaction details are provided by a sender and include a desired amount of money to be sent by the sender to a recipient;

storing the transaction details on the first computer;

establishing a code that corresponds to the transaction details, wherein the code is established for use by the sender during the send transaction;

storing the code on the first computer such that the code is useable to identify the send transaction;

receiving the code at the first computer from an electronic transaction fulfillment device in communication with the first computer after the step of storing the code on the first computer;

validating the code received from the transaction fulfillment device by comparing the code received from the transactionfulfillment device with the code stored on the first computer; and

transmitting a collect amount, to be collected from the sender, from the first computer to the transaction fulfillment device if the code received from the transaction fulfillment device is valid;

wherein at least a portion of the method is performed using TCP/IP, and wherein the code is not provided by or to the recipient for use by the recipient during the send transaction.

'747 patent, claim 20 (emphases added). During prosecution of the '747 and '309 patents, the inventors filed a terminal disclaimer limiting the terms of those patents to that of the '203 patent in response to double patenting rejections by the USPTO.

Like the patented invention, a prior art system owned by Orlandi Valuta, another money transfer service company, also employed technology that did not require customers to fill out forms to transfer money. Below is a figure from Orlandi Valuta's literature on its "Red Phone" system:

Orlandi Valuta's Red Phone technology, used as early as 1997, required a customer to use a telephone to initiate a transaction with an Orlandi Valuta CSR. The telephone typically used by the customer was a red colored telephone available at the retail location that automatically connected to an Orlandi Valuta CSR in Los Angeles, California. The CSR would enter information received from the customer into the Orlandi Valuta computer system, whereupon the system would fax an invoice to the retail location of the customer or to the one that the customer had requested. The Orlandi Valuta customer would not receive a confirmation number for the transaction, but was simply required to wait at the retail loca-tion. Upon receipt of the fax, an agent at the retail location would call out the name of the customer, who could then tender the required amount to that agent. Western Union acquired Orlandi Valuta in 1997, shortly after it had developed the formless transfer system.

The patents in suit claim to solve shortcomings of the Orlandi Valuta system. The inventors, Earney Souten-burg and Dean Seifert, both employees of Western Union, were also responsible for Orlandi Valuta's technology group following Western Union's acquisition of that company. Prior to developing the patented system, later commercialized as Western Union's "Yellow Phone" system, the inventors evaluated Orlandi Valuta's formless money transfer system to determine if Western Union could utilize it on a larger scale to support its higher volumes of money transfers. The inventors claim that the Orlandi Valuta system was not a viable formless option for Western Union.

MoneyGram, also a money transfer service company and a direct competitor of Western Union, developed and deployed its "FormFree" money transfer system in 2000. Like the patented system, the MoneyGram system provided the customer with a confirmation number, which when provided by the customer to a retail agent allowed for completion of the previously staged transaction. This confirmation number was also stored in a Confirmation File database along with other information, such as the transfer amount, of the staged transaction. In September 2003, when MoneyGram learned of the patents in suit, it developed a work-around to avoid infringement of those patent claims. The redesigned system no longer stored the desired amount to be sent in the Confirmation File database for pending...