Dive Brief:
- PNC was ordered to pay $218.5 million to United Services Automobile Association in a civil suit on Friday, after jurors sided with the San Antonio-based insurance and financial services company over claims PNC infringed on its mobile-check deposit technology patent.
- “This verdict further validates our position that we created mobile deposit capture technology,” Nathan McKinley, USAA’s vice president of corporate development, said in a statement, according to the San Antonio Express News.
- Friday’s verdict is the latest patent infringement victory for USAA, which has already secured favorable rulings on two occasions against Wells Fargo over the same technology.
Dive Insight:
In 2020, USAA won two nine-figure judgments against Wells Fargo totaling more than $300 million, in patent-infringement cases related to mobile check deposits.
Wells Fargo settled the two patent-infringement lawsuits with USAA the following year for an undisclosed amount, according to Bloomberg Law.
USAA’s case against PNC involved two patents not addressed in the Wells Fargo cases.
In a statement to Banking Dive, PNC said it is disappointed in the jury verdict.
“This, however, is just the first of many steps as we work through the post-trial and appellate process,” PNC spokesperson Christina Anderson wrote in email.
PNC claims the patent in question is invalid, noting there are “significant proceedings pending” in the United States Patent and Trademark Office regarding the validity of the patent.
“In fact, the [Patent Trial and Appeal Board] has stated that based on the preliminary record PNC ‘has made a strong showing,’” Anderson said. “Even before the trial, USAA dropped infringement assertions with respect to two other USAA patents under PTAB review. We remain confident that in the end we will prevail as to all of the patents USAA has asserted.”
USAA’s series of legal actions centers on technology developed by software company Mitek Systems and used by about 6,500 financial institutions, which would have to negotiate with USAA to pay additional licensing fees for their mobile deposit technology.
Mitek and USAA began collaborating in the early 2000s on remote deposit capture technology that would let customers deposit checks using their phones. The two companies, however, had a falling out, described at the time as a contract dispute.
Mitek and USAA separately launched similar mobile deposit capture products — first Mitek in February 2008, then USAA in August 2009.
After a series of legal battles over the rights and licensing of the technology, the companies settled in 2014, and both kept their patents.
But USAA sent letters to 100 banks in 2017, offering a “licensing program” to pay for the technology surrounding remote deposit capture capabilities and warning them they were violating the patents.
McKinley said USAA’s goal is to be “reasonably compensated for the investment in mobile banking innovation it has made on behalf of our members and the military community.”
“PNC has benefited from our technology, and we look forward to working with banks to create reasonable and mutually beneficial license agreements,” McKinley said.
