RDC Litigation Trending Against Financial Institutions

January 13, 2021 at 9:35 am Leave a comment

Here is a blast from the past. Yesterday, Wells Fargo lost another round in their uphill legal battle with USAA over the validity of various patents related to remote deposit capture (RDC) technology. The outcome of the litigation is crucial to many credit unions in New York State and around the country which face the prospect of entering into licensing agreements with USAA. 

This issue has actually been floating around since June 2018, when USAA sued Wells Fargo alleging that it was violating various patents relating to remote deposit capture technology. Many credit unions have received letters from USAA requesting that they enter into licensing agreements in order to continue using the RDC technology. The Wells Fargo litigation is the key test of the strength of USAA’s patent claims. This latest decision from the patent board follows an earlier decision by a district court in Texas that allowed USAA to continue its patent infringement claims against Wells Fargo. 

Of course, many credit unions have utilized this technology by working with vendors including MiTek – in another important case that’s still pending, MiTek filed a lawsuit in California district court seeking a judgment that it was not violating USAA’s patents. Many credit unions included indemnification clauses in their vendor agreements, however, it’s possible given the scope of these claims that vendors will not be able to satisfy their obligations. The bottom line is that you may want to check in with your outside counsel, and you should be preparing for the financial impact of having to pay licensing fees in the future. 

Entry filed under: New York State, technology. Tags: , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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