IP Law Daily Jury finds Wells Fargo must pay $200 million for infringing USAA patents
Thursday, November 7, 2019

Jury finds Wells Fargo must pay $200 million for infringing USAA patents

By Peter Reap, J.D., LL.M.

The asserted patents generally relate to the automated capture of a digital image of a check for deposit using a mobile device.

A jury in the federal district court in Marshall, Texas, has determined that Wells Fargo Bank infringed two patents asserted by competing financial institution United Services Automobile Association (USAA) for the capturing of check images on mobile devices and that Wells Fargo must pay $200 million to compensate USAA for its infringement through the date of the trial. Furthermore, the jury also found by a preponderance of the evidence that Wells Fargo willfully infringed at least some of the asserted patent claims and an award of enhanced damages for the infringement may follow (United Services Automobile Assn. v. Wells Fargo Bank, N.A., Case No. 2:18-CV-00245-JRG, November 6, 2019).

USAA sued Wells Fargo alleging infringement of U.S. Patent Nos. 8,977,571 (the "’571 patent") and 9,818,090 (the "’090 patent"). Wells Fargo then filed petitions for covered business method (CBM) review with the Patent Trial and Appeal Board challenging each of the asserted patents as claiming patent-ineligible subject matter under 35 U.S.C. § 101. The PTAB declined to institute CBM review as to the ’571 patent because it found that the patent claimed a "technological invention"; that is, it claimed a technological feature that is novel and nonobvious and "solves a technical problem using a technical solution." The PTAB also denied initiation as to Wells Fargo’s related Petition for inter partes review of the ’090 patent. Subsequently, in the district court, Wells Fargo moved for summary judgment challenging the validity of both patents-in-suit under Section 101. Just last week, on October 28, the court denied the motion.

Enforceability of the patents. The asserted claims generally relate to the automated capture of a digital image of a check for deposit using a mobile device. The ’571 Patent and ’090 Patent generally claim systems and methods for capturing check images by monitoring images for conformance with certain monitoring criteria.

The court agreed with the PTAB that the asserted claims are directed at a "technical solution to address a technical problem." The asserted claims "focus on a specific means or method that improves the relevant technology" and not, as Wells Fargo contends, on an abstract concept such as taking a picture. The court, therefore, concluded that the asserted claims are eligible for patent protection under step one of the Alice test. Alternatively and independently, the court found that even if the asserted claims were directed to an abstract concept, a genuine dispute of fact would exist as to whether the claim elements individually or as an ordered combination were "well-understood, routine, and conventional to a skilled artisan in the relevant field." Such a factual dispute precludes summary judgment. Under step one of the Alice inquiry, the court "determines whether the claims at issue are directed to a patent-ineligible concept," such as an abstract idea. Here, the court determined that they are not. The court disagreed with Wells Fargo that the asserted claims are directed at the abstract idea of taking a picture rather than an improvement to technology. "Describing the claims at such a high level of abstraction all but ensures that the exceptions to § 101 swallow the rule."

Verdict reaction. "The verdict acknowledged the value of USAA's innovation on behalf of members," said Nathan McKinley, USAA vice president of corporate development, in a press release. "We hope the industry acknowledges this verdict as further evidence of the enforceability of these patents. Our goal is to be reasonably compensated for the benefits we believe the industry has received from using USAA's pioneering efforts."

USAA filed a separate suit for additional patents related to the mobile remote deposit process against Wells Fargo in August 2018 in the U.S. District Court for the Eastern Division of Texas. It is scheduled for trial in January 2020.

This case is No. 18-CV-00245-JRG.

Attorneys: Jason G. Sheasby (Irell & Manella LLP) for United Services Automobile Association. Thomas M. Melsheimer (Winston & Strawn LLP) for Wells Fargo Bank, N.A.

Companies: United Services Automobile Association; Wells Fargo Bank, N.A.

MainStory: TopStory Patent TexasNews

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More

IP Law Daily: Breaking legal news at your fingertips

Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on intellectual property legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.