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USAA, the big insurance company and bank serving current and former military members and their families, filed a federal lawsuit Thursday accusing Wells Fargo Bank of infringing on four of its mobile remote deposit capture patents.
The lawsuit, filed in U.S. District Court in Marshall, Texas, asks for unspecified damages. The lawsuit appears to be the first legal action USAA has taken since it asked financial institutions just over a year ago to license its RDC technology, for which it holds about 50 patents.
A spokesperson for the bank’s parent company, San Francisco-based Wells Fargo & Co., declined to comment on pending litigation.
With a customer base spread throughout the nation and the world, San Antonio, Texas-based USAA has only four branches. To serve its dispersed clientele, USAA in 2006 launched a scanner-based remote deposit capture service, and later rolled out remote capture services for smart phones.
“To date, USAA has invested many millions of dollars and thousands of employee-hours in the development and implementation of its mobile-deposit technologies,” the civil complaint says. “USAA has not licensed its competitors such as Wells Fargo to use these patented technologies.”
In light of the now-widespread use of mobile capture by banks and credit unions, a spokesperson declined to say why USAA specifically chose to sue Wells Fargo. But Nathan McKinley, USAA vice president of corporate development, told the San Antonio Express-News that “Wells Fargo is one of the biggest adopters of remote deposit capture. We believe they are leveraging the technology to improve their bottom line, and they failed to take a license.”
The lawsuit claims Wells Fargo had 21 million active mobile-banking customers as of February. Most bank mobile apps now enable customers to snap a picture of the front and back of a check and upload the images for deposit to a checking or savings account.
USAA said in the complaint that it approached Wells Fargo last August and “engaged in good-faith negotiations” regarding its patents. The bank, however, still has not licensed any of the patents or otherwise compensated USAA, according to the complaint.
A USAA spokesperson declined to say whether the company planned to sue any more banks.
In 2014, USAA and Mitek Systems Inc., which worked with USAA on technology development in remote capture’s early years, settled patent-infringement and related allegations agains each other.
Industry researcher and publisher John Leekley of Alpharetta, Ga.-based RemoteDepositCapture.com calls the lawsuit “certainly an interesting development.” He notes that very few banks or credit unions have developed their own RDC technology.
“I would estimate at least 95% of all remote deposit and mobile deposit applications at financial institutions are provided by outside vendors,” Leekley tells Digital Transactions News by email.
