Fifth Third latest target in USAA's patent war with banks

• Key insight: USAA has won four mobile deposit patent cases worth more than $525 million, but it has only collected on licenses and settlements.
• Supporting data: USAA held 761 patents in 2017, roughly 50 of them covering remote deposit. It now advertises more than 2,200 and counts more than 180 on remote deposit alone.
• Expert quote: Banks and credit unions that defended against USAA's claims "did so successfully," said Brian H. Pandya, a partner at Duane Morris.

Overview bullets generated by AI with editorial review.

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.

History of USAA's patent fight

USAA says it invented mobile remote deposit capture, and it started asking other institutions to license the technology in 2017.

It has sued six banks over the matter: Wells Fargo, PNC, BBVA USA, Truist, Regions (which settled in March) and Fifth Third.

Every one of those cases went to Judge J. Rodney Gilstrap in Marshall, a court patent holders favor for its speed and its record of siding with them. The Fifth Third complaint is at least the ninth suit USAA has brought to the Marshall court over  remote deposit capture. 

Some banks, like Discover, have agreed to license the patents rather than fight.

Five of USAA's mobile deposit patents no longer exist, cancelled by the same government agency that granted them, at the request of a bank that fought instead: PNC.

"Usually, it just takes one institution to step up and fight back on it," Sean Reilly, senior vice president and associate general counsel at The Clearing House, told American Banker in February 2023. "Then, if those patents ultimately get invalidated, then the entire industry benefits."

USAA declined to answer questions for this article.

Four big verdicts, and only settlements

Juries in Marshall have found for USAA four times, against Wells Fargo and PNC, awarding more than $525 million in damages against the two banks.

Wells Fargo lost $200 million in November 2019 and $102.8 million in January 2020. PNC lost $218.45 million in May 2022 and $4.3 million that September.

An appeals court has since reversed the two verdicts against PNC, and a court stayed the verdicts against Wells Fargo before both sides reached a settlement.

Depositing a check with a mobile device is an abstract idea, and abstract ideas cannot be patented, the U.S. Court of Appeals for the Federal Circuit ruled in one of the PNC cases.

The U.S. Supreme Court refused to review that ruling on May 18 of this year, leaving PNC owing USAA nothing. It reached only the patents PNC was accused of infringing, though, so USAA still has patents to assert in front of its friendly Texas venue.

In Wells Fargo's cases, Gilstrap entered judgments against the bank but never ruled on post-trial motions after that. The bank went on to win a stay of collection in both cases, and the two sides settled in 2021 with every post-trial motion still pending.

Whatever USAA has collected in this campaign has come through licenses and settlements it negotiated, not judgments that were enforced.

Where USAA loses: The patent office

A company that thinks a patent should never have been granted can ask the U.S. Patent and Trademark Office to take it back. The proceeding is called an inter partes review, or IPR; the agency's Patent Trial and Appeal Board hears it instead of a judge and jury.

An IPR answers one narrow question: Was this invention new and non-obvious in light of the older patents and published systems that already existed when the inventor claimed it (so-called prior art)?

Five times between January and June of 2023, the board decided USAA's mobile deposit patents were obvious and cancelled them. All five cancellations grew out of petitions PNC filed.

The Federal Circuit upheld every one across four rulings in early 2025, and all five cancellations are now final. USAA asked the Supreme Court to revive two of the patents, and the court refused in October 2025.

On one patent, the appeals court went as far as to order USAA to cover PNC's appeal costs.

Going to the agency beats going to court, according to Reilly, a former patent examiner.

"It's preferable to have that second look outside of a district court case," he said in 2023. "When you're in a district court case, you've got millions in litigation. The IPR process is the alternative to that."

A bank that waits to file an IPR can quickly lose the option. Once it has been served with an infringement complaint, it has one year to file; the patent office appeal board cannot take the case after that.

The IPR route isn't free. Filing a petition costs $23,750 plus another $28,125 once the board agrees to open a review, according to the agency's published fee schedule. Lawyer fees and the cost of searching for prior art come on top of that.

Wells Fargo tried IPRs 20 times and lost

Filing a challenge and winning one are different things, and Wells Fargo offers proof.

Patent office records show that Wells Fargo brought 20 IPRs against USAA's remote deposit patents between November 2018 and August 2020.

It lost all three that reached a final decision. The board declined to take up most of the rest, finding Wells Fargo unlikely enough to win that a full review was not worth opening. Its settlement with USAA ended the remainder.

By contrast, PNC filed 12 challenges and won five.

The merits of each IPR vary, so the differing outcomes for PNC and Wells Fargo are not directly comparable, with two exceptions: the two patents that both banks attacked.

Wells Fargo lost its IPRs on those two patents; PNC later won.

Money and size do not explain the gap; Wells Fargo is the bigger bank and filed more petitions. The strength of the case makes the difference. Specifically, the prior art each bank puts in front of the patent appeals board matters.

Wells Fargo's losing petitions pointed to a patent belonging to Mitek Systems, the vendor that supplied USAA with check-reading software while USAA was building mobile deposit.

The board agreed the Mitek patent counted as prior art yet still found Wells Fargo had not proved its case.

PNC kept one of the references Wells Fargo had used, dropped the Mitek patent and paired what was left with a Chinese patent application published in 2007. That combination persuaded the board.

The differences in the two arguments are highly technical; the point is that these details, handled by intellectual property lawyers, matter.

USAA argued on appeal that the board had contradicted itself, cancelling on one bank's evidence what it had spared on another's. The Federal Circuit rejected that, holding that the two decisions turned on different references, asserted by a different party, on a different record.

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.

There is plenty left over which to argue. USAA held 761 patents in 2017, roughly 50 of them covering remote deposit. It now advertises more than 2,200 issued patents, including more than 180 on remote deposit alone. The portfolio grew while the litigation went against the company.

Fifth Third, the latest bank to grapple with USAA over patents, asked the U.S. Patent and Trademark Office to cancel two of USAA's patents in February, months before it was hit with USAA's complaint. USAA filed several objections to Fifth Third's petitions.

The complaint USAA filed in Marshall, Texas, does not mention any of that. It says instead that Fifth Third "elected to continue its infringement unabated" and "chose to infringe rather than engaging in licensing discussions."

Fifth Third owes an answer to the court by Sept. 25, and its two petitions are pending.

Because the petitions came first, the next ruling on whether USAA's mobile deposit patents survive will likely come from the patent office rather than from a patent-holder-friendly jury.