Compliance Blog

Accounts Jun 25, 2018

ICYMI: RDC Litigation, USAA sues Wells fargo

Written by André B. Cotten, NCCO, Regulatory Compliance Counsel, NAFCU

Hi, Compliance Friends! It's officially summer, so I hope you have scheduled some time away from your desk to enjoy the season. Meanwhile, things are still in motion here in compliance land. 

On June 7, 2018, United Services Automobile Association (USAA) filed a complaint against Wells Fargo in the U.S. District Court for the Eastern District of Texas alleging patent infringement. USAA developed and patented several technologies to assist military members in banking while on deployment, and it claims Wells Fargo is using these technologies in violation of USAA's patents.  In the complaint, there are four patents in question, all of which, are intended to improve computing systems that enable remote check deposit systems. USAA's patents include the following technologies: deploying an "alignment guide"; a check monitoring system that monitors specific features of the check; an automatic image capture system that works in concert with the alignment monitoring system; and a transmission system. Note, the complaint uses language that sends a message to other financial institutions that the claims may not stop with Wells Fargo, such as the following, "USAA has not licensed its competitors such as Wells Fargo to use these patented technologies." Today's blog will provide a high-level overview of USAA's claims. 

The Complaint

USAA begins by citing its online and mobile presence as being critical to its members, thus sparking the early remote deposit capture technologies. The complaint also provides a bit of background about the various stages of mobile deposit capabilities as USAA developed and refined its remote deposit capture abilities. Ultimately, USAA asserts that Wells Fargo has taken advantage of USAA's innovations in remote deposit capture by incorporating USAA's technologies into its Wells Fargo Mobile Deposit system without its permission. 

Patent infringement claims are highly technical in nature. The complaint goes into a great deal of detail explaining how Wells Fargo is allegedly using USAA's technologies without their permission. For example, two of the patents describe methods and systems for image and criterion monitoring during the remote deposit capture process. USAA asserts that these patents solve discrete, technological problems associated with computer systems when capturing images. For example, "when the image of the check in the field of view passes monitoring criteria, an image may be taken by the camera and provided from the mobile device to a financial institution." The image capture "may be performed automatically as soon as the image of the check is determined to pass the monitoring criteria."

There is also language in the complaint that states Wells Fargo had actual knowledge of the infringement of USAA's patents since at least the time of the complaint, and continues to infringe the patent notwithstanding the knowledge. USAA also asserts that Wells Fargo had actual knowledge of its infringement, because USAA had "put Wells Fargo on notice". From my research, this seems to serve two purposes. First, the process of putting an adversary on notice is a component of claim construction. Claim construction is the process of construing the claims of a patent to give them meaning, which meaning is then compared to an allegedly infringing device or method to determine infringement or to prior art to determine validity. Secondly, it seems USAA is using the preliminary notice as proof of actual knowledge of the patent infringements. In the complaints prayer for relief, USAA asserts that Wells Fargo's infringement is willful and that damages should be enhanced up to three times the actual damages awarded.

While We Wait

In the interim, the NAFCU Compliance team will keep a close watch on this case as it evolves. We realize that some credit unions have received prior correspondence from USAA putting them on notice of a potential suit.  Given the widespread industry use of remote deposit capture, we will be monitoring how courts are deciding this issue. 


In other news, my partner, Jonathan, and I recently got engaged in New Orleans, LA. Here are few photos for you to enjoy:

Andre and Jonathan Engagement Photo OutsideAndre and Jonathan Engagement Photo LoveAndre and Jonathan with Dancer


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  • Remote Deposit Capture