Mobile Check Deposit Patent Case Headed for Trial

By David Barnard and Samir Mehta

Companies involved in mobile checking should watch case closely

The United States Automobile Association (USAA) owns a portfolio of patents aimed at mobile check deposit technology. One group of these patents is targeted at the process by which mobile check deposit is accomplished (i.e., the backend processing of mobile check deposits in banking data centers). Another set of patents is aimed at the specific technology used by mobile devices to correctly capture the image of the check (i.e., technology that allows a user to capture check information in proper formats using a camera on a smartphone or another mobile device).

For several years, USAA has sent scores of letters to financial institutions, noting its patent rights, and asserting that the financial institutions' mobile checking technology falls within the scope of their patents. Until fairly recently, however, USAA had not filed suit to enforce its patents. 

In the summer of 2018, USAA filed two suits against Wells Fargo Bank NA in the Eastern District of Texas, one of the most popular venues for patent plaintiffs in the country. In response, Wells Fargo filed 11 inter partes reviews (IPRs) and covered business method (CBM) challenges at the U.S. Patent and Trademark Office, asserting that the USAA patents are invalid. Wells Fargo's CBMs and IPRs relating to the set of patents in the first lawsuit were unsuccessful. 

Wells Fargo also filed a motion for summary judgment contending that the some of the patents are invalid as "abstract ideas," which are unpatentable under 35 U.S.C. § 101 when they fail to recite “significantly more” than the abstract idea. These types of challenges have yielded favorable results in many cases when they were brought against software patents that did not a) improve the technology of a computing system, b) include a technological innovation, or c) include steps that were not well-understood, routine and conventional. Wells Fargo argued that the USAA patent claims were directed to the abstract idea of taking a photograph, failed to improve the technology of the computing system or make any other innovation, and only applied well-understood, routine and conventional steps from the field of software computing. On October 28, 2019, the District Court rejected Wells Fargo's summary judgment motion. Accordingly, this case is headed for trial.

As this case heads toward trial, financial institutions involved in mobile check depositing will want to stay updated about its developments in order to understand and plan for possible future claims from USAA. 

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