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PNC must face USAA’s mobile-deposit patent claims, Texas court says

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The logo above a PNC Bank is shown in Charlotte, North Carolina April 18, 2012. REUTERS/Chris Keane

  • Court rejects PNC’s early arguments that its system doesn’t infringe
  • Tech previously at issue in $300 million USAA dispute with Wells Fargo

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(Reuters) – PNC Bank must face claims that its mobile banking technology infringes military-focused financial services group United Services Automobile Association’s patents, an East Texas federal court has ruled.

U.S. District Judge Rodney Gilstrap in Marshall, Texas, said Friday that PNC couldn’t show at an early stage of the case that its technology for using a mobile phone to make bank deposits functions differently from USAA’s patented technology.

USAA previously sued Wells Fargo in the same court for infringing related patents, winning two jury verdicts totaling over $300 million before the parties settled for an undisclosed amount in February.

PNC declined to comment on the ruling. USAA and its attorney Jason Sheasby of Irell & Manella didn’t immediately respond to a request for comment, nor did PNC’s attorneys Gregory Stone of Munger Tolles & Olson, Lionel Lavenue of Finnegan Henderson Farabow Garrett & Dunner, or Melissa Smith of Gillam Smith.

San Antonio-based USAA, which provides financial services to military members, first sued PNC last year for infringing four patents related to a system for depositing checks remotely using mobile devices.

One of the patents was also at issue in USAA’s $200 million jury win against Wells Fargo in 2019.

In a separate case, USAA sued PNC in March alleging infringement of two additional mobile-banking patents. Those patents were previously the basis of USAA’s second jury win against Wells Fargo last year for $102 million.

Pittsburgh-based PNC moved to dismiss USAA’s claims in this case last year, arguing its mobile-deposit system doesn’t work in the same way as the patented technology.

Gilstrap denied PNC’s motion on Friday, finding at this stage that USAA’s claims were plausible.

PNC had argued that one of USAA’s patents requires the use of a single system with both a “customer’s mobile device” and a “bank computer,” and that it doesn’t infringe because it doesn’t make, use, or sell mobile devices. PNC also said it can’t infringe because customers, not PNC, “complete” PNC’s system using their mobile devices.

Gilstrap said PNC’s arguments “involve issues of fact and law that are not ripe for ultimate resolution,” and that USAA’s claims — which cite, among other things, PNC’s own videos about how its system works — were sufficient to sustain its case.

PNC’s arguments that it didn’t infringe the other three patents “generally suffer from the same deficiencies,” Gilstrap said.

Gilstrap also rejected PNC’s argument that it couldn’t have infringed the patents indirectly because it didn’t know of them before the lawsuit, finding it plausible that PNC was aware of the patents based on USAA’s argument that they were widely publicized in banking industry publications, among other things.

PNC countersued USAA in June for allegedly infringing four of its mobile-banking patents.

The case is United Services Automobile Ass’n v. PNC Bank N.A., U.S. District Court for the Eastern District of Texas, No. 2:20-cv-00319.

For USAA: Jason Sheasby of Irell & Manella

For PNC: Gregory Stone of Munger Tolles & Olson, Lionel Lavenue of Finnegan Henderson Farabow Garrett & Dunner, Melissa Smith of Gillam Smith

Read more:

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

Wells Fargo loses pretrial challenge to USAA patents on mobile check deposits