USAA loses round in Mitek mobile-banking patent fight

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

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  • Appeals court docket revived preemptive Mitek lawsuit
  • USAA beforehand won about $300 million from Mitek customer Wells Fargo

(Reuters) – A U.S. appeals courtroom on Friday revived a lawsuit by Mitek Devices Inc in search of a judgment that its cellular test-deposit software package does not violate United Companies Auto Association’s patent rights.

USAA has already gained more than $500 million in lawsuits in excess of its mobile-banking patents, like $218 million from PNC Lender last week and additional than $300 million from Mitek consumer Wells Fargo.

An East Texas federal courtroom ought to have taken a more in-depth glimpse at whether or not Mitek’s preemptive lawsuit was justified ahead of dismissing the circumstance, the Courtroom of Appeals for the Federal Circuit mentioned Friday.

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Mitek experienced no remark on the ruling. USAA and its legal professional did not quickly answer to a request for comment.

Mitek sued USAA in 2019 in San Francisco, trying to find a judgment that its software for capturing pictures of checks does not infringe four USAA patents. Mitek licenses the engineering to many economical establishments, like Wells Fargo.

5 days later on, a Texas jury awarded USAA $200 million in its situation in opposition to Wells Fargo, which was accused of infringing two of USAA’s patents by its cellular-deposit technological know-how. A 2nd jury later on awarded USAA an extra $102 million. The get-togethers settled very last calendar year for an undisclosed total.

Mitek argued its lawsuit was justified because the USAA litigation, along with hundreds of need letters despatched by USAA to Mitek’s prospects, showed that it was at threat of currently being sued. U.S. District Decide Rodney Gilstrap disagreed and dismissed the lawsuit final 12 months just after it was moved to East Texas.

Producing for a a few-judge panel, Circuit Decide Richard Taranto mentioned Friday that the circumstance necessary a “finer parsing of the challenges and much more particularized determinations” from both equally the events and the reduce court docket, and despatched it back to Gilstrap.

Gilstrap experienced concluded that Mitek did not clearly show it moderately thought USAA meant to sue it. He dependent his ruling partly on Mitek’s failure to intervene in the Wells Fargo dispute and proof that Mitek’s items would not have infringed with out Wells Fargo’s “significant customization.”

But Taranto mentioned that Gilstrap’s reasoning was “not sufficiently comprehensive” and that the reduce court docket need to devote far more time examining how banking institutions use Mitek’s technological innovation and how it relates to USAA’s potential statements.

Taranto also stated Gilstrap should glance all over again into irrespective of whether USAA’s need letters justified hearing Mitek’s case.

The circumstance is Mitek Techniques Inc v. United Companies Automobile Affiliation, U.S. Courtroom 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 extra:

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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