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Datatreasury Corp. v. Wells Fargo & Co.

United States Court of Appeals for the Federal Circuit

April 16, 2008, Decided

2007-1317

Opinion

 [***1441]  [*1369]   FOGEL, District Judge.

Wells Fargo & Company ("WFC") and Wells Fargo Bank, N.A. (collectively, "Appellants") appeal an order of the United States District Court for the Eastern District of Texas denying Appellants' motion to dismiss or stay pending arbitration litigation brought by Datatreasury Corp.  [*1370]  ("Appellee"). This Court heard oral argument on November 6, 2007. Because the parties are not bound by the operative arbitration clause, we affirm.

In December 2003, one of WFC's subsidiaries, Wells Fargo Services Corp. ("WFSC") entered into a software  [**2] license agreement with e-Banc LLC ("e-Banc") and WMR e-Pin LLC ("WMR"). This agreement, the Software License Agreement Schedule 2 ("Schedule 2"), provided WFSC with rights to certain software, including software that "provides ability to provide net settlement services." 2 Schedule 2 also memorialized the following side agreement:

WMR . . . shall sign a side agreement representing and warranting that it has the rights to license its Central Check Clearing System patent relating to national net settlement (No. 5,265,008) ("Patent") and shall grant Wells Fargo a royalty free license to . . . use such Patent for the term of the License hereunder . . . .

In 2004, WFSC entered into a Patent License Agreement ("PLA") with WMR. The PLA between WFSC and WMR contained six clauses that are relevant to this case:

(1) PLA License Grant

WMR hereby grants Wells Fargo a non-exclusive, fully paid-up, royalty free worldwide right and license under and to the Patent, and any rights that may be embodied in the Patent, for the purpose of enabling Wells Fargo, or any of its Affiliates, to use or utilize the Licensed Products for providing and performing, directly or indirectly, any Net Settlement Services  [**3] (the "License").

(2) PLA Definition of the Patent Being Licensed 

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522 F.3d 1368 *; 2008 U.S. App. LEXIS 8127 **; 86 U.S.P.Q.2D (BNA) 1440 ***

DATATREASURY CORP., Plaintiff-Appellee, v. WELLS FARGO & COMPANY and WELLS FARGO BANK, N.A., Defendants-Appellants, and BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., U.S. BANCORP, U.S. BANK, N.A., WACHOVIA CORPORATION, WACHOVIA BANK, N.A., SUNTRUST BANKS, INC., SUNTRUST BANK, BB&T CORPORATION, BRANCH BANKING AND TRUST COMPANY, BANCORPSOUTH, INC., BANCORP SOUTH BANK, COMPASS BANCSHARES, INC., COMPASS BANK, CULLEN/FROST BANKERS, INC., THE FROST NATIONAL BANK, FIRST HORIZON NATIONAL CORPORATION, FIRST TENNESSEE BANK, N.A., HSBC NORTH AMERICA HOLDINGS, INC., HSBC BANK USA, N.A., HARRIS BANKCORP, INC., HARRIS, N.A., NATIONAL CITY CORPORATION, NATIONAL CITY BANK, ZIONS BANCORPORATION, ZIONS FIRST NATIONAL BANK, BANK OF NEW YORK CO., INC., THE BANK OF NEW YORK CO., INC., UNIONBANCAL CORPORATION, UNION BANK OF CALIFORNIA, N.A., BANK OF TOKYO-MITSUBISHI UFJ, LTD., CITIZENS FINANCIAL GROUP, INC., COMERICA INCORPORATED, COMERICA BANK & TRUST, N.A., FIRST CITIZENS BANCSHARES, INC., FIRST CITIZENS BANK & TRUST COMPANY, KEYCORP, KEYBANK NATIONAL ASSOCIATION, LASALLE BANK CORPORATION, DEUTSCHE BANK TRUST COMPANY AMERICAS, LASALLE BANK, N.A., M&T BANK CORPORATION, M&T BANK, THE PNC FINANCIAL SERVICES GROUP, INC., PNC BANK, N.A., SMALL VALUE PAYMENTS COMPANY, LLC, REMITCO, LLC, THE CLEARING HOUSE PAYMENTS COMPANY, LLC, FIRST DATA CORPORATION, TELECHECK SERVICES, INC., ELECTRONIC DATA SYSTEMS CORP., UBS AMERICAS, INC., THE BANK OF NEW YORK, and VIEWPOINTE ARCHIVE SERVICES, LLC, Defendants.

Subsequent History: As Amended, April 22, 2008.

Patent interpreted by DataTreasury Corp. v. Wells Fargo & Co., 2009 U.S. Dist. LEXIS 133483 (E.D. Tex., May 11, 2009)

Prior History:  [**1] Appeal from the United States District Court for the Eastern District of Texas in case no. 2:06-CV-72, Judge David J. Folsom.

Datatreasury Corp. v. Wells Fargo & Co., 490 F. Supp. 2d 756, 2007 U.S. Dist. LEXIS 43770 (E.D. Tex., Apr. 24, 2007)

Disposition: AFFIRMED.

CORE TERMS

arbitrate, patent, parties, arbitration clause, License, license agreement, software, patents-in-suit, Settlement, assignee, rights

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Civil Procedure, Appeals, Standards of Review, Clearly Erroneous Review, De Novo Review, Computer & Internet Law, Internet Business, Licensing, Patent Assignments & Transfers, Federal Arbitration Act, Arbitration Agreements