USAA wins $20OM in patent lawsuit
A federal jury in East Texas awarded USAA $200 million Wednesday after finding that Wells Fargo Bank infringed on two of the San Antonio company’s patents relating to technology that allows users to deposit checks using mobile devices.
“The verdict acknowledged the value of USAA’s innovations on behalf of (its) members,” Nathan McKinley, vice president of corporate development, said in a statement. “We hope the industry acknowledges this verdict as further evidence of the enforceability of these patents.”
USAA had asked jurors to award it $300 million in damages during the trial, which started Oct. 30.
USAA sued San Francisco-based Wells Fargo in June 2018, the first
lawsuit the insurance and financial services company filed after it warned in 2017 that it would reach out to banks and credit unions to “pay their fair share” by licensing its patented check-deposit technology.
USAA had sent out hundreds of letters to financial institutions seeking licensing fees for its intellectual property.
“Our goal is to be reasonably compensated for the benefits that we believe the industry has received from USAA’s pioneering efforts,” McKinley added.
The two USAA patents are for an “auto capture” process, which allows customers to use their mobile devices to photograph and then deposit checks without visiting a branch or sending checks by mail.
Nearly every U.S. bank and credit union uses the technology, which USAA says has benefited some 87 million consumers.
Wells Fargo spokesman Peter Gilchrist said the bank is considering its options following the verdict. It could appeal.
“Wells Fargo strongly disagrees with the jury verdict and does not believe it has infringed on USAA’s patent rights,” Gilchrist said in an email. “We believe this is an industry issue involving numerous other banks that license remote mobile deposit technology from the same vendor, not USAA.”
The verdict has no impact on Wells Fargo’s customers’ ability to remotely deposit checks, he added.
Wells Fargo had countersued USAA in August 2018, asking the court to rule that the bank didn’t infringe on any of USAA’s asserted patents. The suit also asked that the patents in question be declared invalid.
The U.S. District Court in Marshall has had a reputation for its friendliness to plaintiffs filing patent lawsuits, the New York Times reported in 2017. More than 40 percent of patent lawsuits are filed in the court.
Marshall also became known in patent circles in the early 2000 for its “rocket docket,” a reference to rules designed to move patent cases along quickly, Bloomberg reported in 2017.
USAA has another pending lawsuit against Wells Fargo relating to the same technology. That case is scheduled to go to trial in January.
When USAA filed its first lawsuit, McKinley wouldn’t say why USAA chose to pursue litigation against Wells Fargo, the third-largest U.S. bank.
But Jim Marous, co-publisher of The Financial Brand, an online publication that covers the financial industry, had a theory.
“It doesn’t do much good to sue a smaller institution if you’re trying to make sure you’re taking a stand for your product,” Marous said in an interview last year. “If you’re going to put a monetary amount toward the damages, you’re going to pick a large institution.”
USAA has about 13 members, comprising current and former members of the military.