## Facts

- BMC Resources, Inc. owned patents claiming a method for processing PIN-less debit bill-payment transactions using an interactive voice response (IVR) interface between a telephone keypad and a debit network.
- The claimed method contemplated a transaction flow involving multiple participants, including a payee’s agent, a debit/ATM network, and card-issuing financial institutions that authorize and process the debit.
- Paymentech, L.P. marketed PIN-less debit bill payment services for merchants in which:
  - a customer used an IVR to submit payment information to a merchant,
  - the merchant transmitted information to Paymentech,
  - Paymentech routed it to a debit network, which forwarded it to a financial institution for authorization,
  - authorization results were transmitted back through the network and Paymentech to the merchant, which informed the customer.
- BMC alleged Paymentech infringed the method claims even though Paymentech did not itself perform every claimed step; some steps were performed by merchants, debit networks, and financial institutions.
- The district court granted summary judgment of noninfringement, reasoning Paymentech performed only some steps and BMC did not show Paymentech was legally responsible for the others’ performance.

## Issues

1. Whether a defendant can be liable for direct infringement of a method claim under 35 U.S.C. § 271(a) when it performs only some steps and independent third parties perform the remaining steps.
2. What showing is required to attribute third parties’ performance of method steps to the defendant (i.e., “direction or control”/vicarious responsibility).

## Decision

- The Federal Circuit affirmed summary judgment of noninfringement.
- Direct infringement was not established because Paymentech did not perform all steps of the asserted method claims.
- The record provided no basis to hold Paymentech vicariously responsible for steps performed by unrelated entities (e.g., merchants, debit networks, and financial institutions).
- The court rejected BMC’s contention that precedent allowed “joint infringement” based on coordinated participation without proof of direction or control.

## Legal Principles

- Direct infringement of a method claim under § 271(a) requires that all claimed steps be performed by, or attributable to, a single entity.
- Steps performed by others are attributable to the accused infringer only when the accused infringer directs or controls the other actors (e.g., through agency or comparable relationships establishing vicarious responsibility).
- Arms-length cooperation among independent entities, without direction or control over their performance, is insufficient to impose direct infringement liability for divided performance of method steps.
- Method claims that necessarily require multiple independent actors can create enforcement gaps; patentees bear responsibility to draft claims that can be infringed by a single actor if they seek direct-infringement liability.

## Conclusion

The court held that Paymentech could not be liable for direct infringement because it did not perform every step of the claimed method and did not direct or control the independent entities that performed the remaining steps, so their conduct could not be attributed to Paymentech under § 271(a).


BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007)