USAA awarded $4.3 M Verdict in second Patent Lawsuit win against PNC Bank

The United Services Automobile Association (USAA) has succeeded again against PNC Bank in ongoing patent infringement litigation over remote check deposit technologies used in mobile banking systems.

After finding the bank liable for patent infringement last Friday, a federal East Texas jury in Marshall’s federal court ordered PNC to pay $4.3 million in damages.

“This patented technology enables USAA to connect members of the military and their families across the globe to financial services,” the lawsuit filed July 2021 states. “USAA developed this technology as part of its mission to improve the financial security of its members. In its decades of serving the military community, USAA has worked to innovate in serving the needs of its members, including a lifestyle that can make getting to a bank branch difficult, particularly if they are out to sea or deployed outside the United States.

“PNC has chosen to use USAA’s patented technologies without permission for its own commercial gain,” the lawsuit states. “This lawsuit seeks remedies for PNC’s misconduct.”

The case kicked off last Monday with U.S. District Chief Judge Rodney Gilstrap presiding.

Friday’s verdict comes four months after USAA secured a $218.45 million verdict against PNC Bank in Marshall’s federal court in May.

Their win in May marked, at that time, the latest in a series of nine-figure jury wins for USAA in patent cases over the technology.

In January 2020, for instance, a federal jury in Marshall ordered Wells Fargo – the nation’s fourth largest bank — to pay $102,792,510 in damages, which was the exact dollar amount the plaintiff was seeking in that particular case. The verdict came exactly two months after USAA scored a $200 million verdict in a patent infringement trial against Wells Fargo, held in Marshall’s Federal Building and United States Courthouse.

During closing arguments last Friday, USAA’s counsel asked the jury to find the defendant guilty of infringement and award a running royalty of no less than $80.5 million.

Counsel for PNC Bank asked the jury if they did find for the plaintiff to at least assess damages at a $4.3 million lump sum, which is exactly what the jury granted.

“USAA is asking for $80 million for 14 months use of two patents if there’s infringement at all,” PNC’s attorney Joseph Mueller, of Wilmer Hale-Boston, of Boston, Massachusetts, argued in closing statements. “There’s not. This needs to come to an end.

“And a lump sum — if you are to award damages at all — would make it come to an end,” Mueller said, noting that the defendant’s damages expert suggested a hypothetical figure of $4.3 million.

In closing arguments, USAA’s attorney, Jason Sheasby, of Irell & Manella law firm of Los Angeles, California told jurors the case is very important to USAA.

“In September 2020, USAA gave formal notice to PNC that it needed to stop using our invention,” said Sheasby.

He said instead of complying, PNC released a new product.

“This case is solely about that new product,” said Sheasby.

Sheasby said PNC has seen significant growth in mobile checking deposits, using USAA’s technology. He contended that PNC has made 176 million infringing deposits.

“Ladies and gentlemen, this process is safe,” Sheasby said of USAA’s patented technology. “USAA spent decades with the money of its members creating groundbreaking technology. USAA is in your hands.”

The lawsuit notes that USAA, a San Antonio- based reciprocal interinsurance exchange for military service members, has been serving present and former members of the U.S. military and their families since 1922 and is one of America’s leading insurance and financial services companies.

“This is an action for infringement of patents awarded to research and development teams at USAA for their years of work developing and improving technologies that, among other things, allow banking customers to easily and conveniently deposit paper checks into their accounts from their smartphones – wherever they might be in the world,” the lawsuit states.

According to the lawsuit, USAA began investing in and developing the technology around 2004.

In his closing statements, PNC’s attorney Mueller said this latest case is what PNC hopes to be the end of the ongoing dispute.

“It needs to come to an end,” he said.

Retracing the genesis of the dispute, Mueller told the jury that PNC took the liberty to remove features in its product, following the first lawsuit filed against them, in order to avoid further litigation.

“Yet, here we are,” said Mueller.

Mueller accused USAA of misdirecting, mixing and matching patents and taking things out of context in order to prove their case.

“When the features were taken out, there’s no fit let,” Mueller argued. “They brought on a lawsuit anyway.”

Arguing for USAA regarding the issue of damages, Sheasby said because USAA’s patents-in-suit last until 2026, the defendant should have to pay for the entire use of the technology by being ordered to pay a running royalty instead of a lump sum.

“PNC wants you to award a lump sum. If you award a lump sum, it doesn’t pay for (future use),” he explained, adding a running royalty is the only way to make sure it’s paid for future uses.

“If you (award a) lump sum, that’s PNC’s clear language for saying we get it for free,” said Sheasby.

“USAA created something unique; they created something special,” said Sheasby.

Source: marshallnewsmessenger.com-Robin Y. Richardson

Editor: IPR Daily-Ann