USAA sued Fifth Third last month for letting its customers deposit checks by photographing them.
Bank of America and USAA announced Tuesday that they had agreed to a patent cross-license, giving each the right to use what the other has invented. There is no public record of USAA ever suing Bank of America.
The two cases are the latest developments in USAA's nine-year war with banks over remote deposit capture patents. Any financial institution that lets a customer deposit a check by phone is a potential target for the San Antonio insurer and bank for military families, which advertises more than 2,200 issued patents, including more than 180 on remote deposit alone.
A bank can fight back by arguing the patents cover old technology, that the idea is too abstract to patent at all or that its own product works differently. Or it can try to get the vendor that sold it the technology to wage the defense.
Four juries have handed USAA more than $525 million over the past nine years, and it has yet to collect on any of those verdicts. The banks that beat it did so at the agency that issued the patents.
What a bank can actually argue
Banks and credit unions on the receiving end of a patent infringement letter from USAA have more than one way to push back, and many of them work, according to Brian H. Pandya, a partner at Duane Morris who has followed the campaign since it began in 2017.
They could argue the patents were "invalid for covering old technology," Pandya told American Banker, or "unpatentable for claiming abstract ideas or business methods." They could also argue that their own technology, usually bought from a vendor, "operated differently than what the patent claimed," he said.
Good vendor contracts matter in these cases, according to Pandya, and the piece that counts is an indemnity, which puts the burden of defending the technology on the vendor rather than on the bank that bought it.
Many of the institutions that fought, Pandya said, "did so successfully." But fighting is still slow and expensive.
The last option is to "cap their risks and take a one-way license," he said, meaning a deal in which the bank pays USAA and gets nothing back but permission. Discover did that in 2023, taking a license to more than 130 USAA remote deposit patents.
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