USAA loses round in Mitek mobile-banking patent fight

The United States Court of Appeals for the Federal Circuit is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

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  • Appeals court revived preemptive Mitek lawsuit
  • USAA previously won over $300 million from Mitek customer Wells Fargo

(Reuters) – A U.S. appeals court on Friday revived a lawsuit by Mitek Systems Inc seeking a judgment that its mobile check-deposit software does not violate United Services Automobile Association’s patent rights.

USAA has already won more than $500 million in lawsuits over its mobile-banking patents, including $218 million from PNC Bank last week and more than $300 million from Mitek customer Wells Fargo.

An East Texas federal court should have taken a more in-depth look at whether Mitek’s preemptive lawsuit was justified before dismissing the case, the Court of Appeals for the Federal Circuit said Friday.

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Mitek had no comment on the ruling. USAA and its attorney did not immediately respond to a request for comment.

Mitek sued USAA in 2019 in San Francisco, seeking a judgment that its software for capturing images of checks does not infringe four USAA patents. Mitek licenses the technology to several financial institutions, including Wells Fargo.

Five days later, a Texas jury awarded USAA $200 million in its case against Wells Fargo, which was accused of infringing two of USAA’s patents through its mobile-deposit technology. A second jury later awarded USAA an additional $102 million. The parties settled last year for an undisclosed amount.

Mitek argued its lawsuit was justified because the USAA litigation, along with hundreds of demand letters sent by USAA to Mitek’s customers, showed that it was at risk of being sued. U.S. District Judge Rodney Gilstrap disagreed and dismissed the lawsuit last year after it was moved to East Texas.

Writing for a three-judge panel, Circuit Judge Richard Taranto said Friday that the case needed a “finer parsing of the issues and more particularized determinations” from both the parties and the lower court, and sent it back to Gilstrap.

Gilstrap had concluded that Mitek did not show it reasonably believed USAA intended to sue it. He based his ruling partly on Mitek’s failure to intervene in the Wells Fargo dispute and evidence that Mitek’s products would not have infringed without Wells Fargo’s “significant customization.”

But Taranto said that Gilstrap’s reasoning was “not sufficiently complete” and that the lower court should spend more time analyzing how banks use Mitek’s technology and how it relates to USAA’s potential claims.

Taranto also said Gilstrap should look again into whether USAA’s demand letters justified hearing Mitek’s case.

The case is Mitek Systems Inc v. United Services Automobile Association, U.S. Court of Appeals for the Federal Circuit, No. 21-1989.

For Mitek: Brian Mack of Quinn Emanuel Urquhart & Sullivan

For USAA: Lisa Glasser of Irell & Manella

Read more:

Wells Fargo slapped with $200 million patent verdict in East Texas

USAA wins $218 mln verdict from PNC in mobile-deposit tech trial

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Our Standards: The Thomson Reuters Trust Principles.

Blake Brittain

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at

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