"Perhaps Senior U.S. District Judge Harry Lee Hudspeth has been riding too many trains bound for nowhere.
The San Antonio federal judge on Monday quoted lyrics from “The Gambler” to explain why he was denying a request by USAA’s lawyers to set a briefing to recover their legal fees in a dispute with San Diego software company Mitek Systems Inc.
“Never count your money while you’re sittin’ at the table,” Hudspeth wrote in the opening line of his order. Kenny Rogers sung the 1978 hit, which was written by Don Schlitz, a 2012 inductee into the Songwriters Hall of Fame.
Country Music Hall Of Fame Kenny Rogers Exhibit Opening Reception
“There is a fine line between having confidence and being presumptuous,” Hudspeth continued. “The Plaintiff’s motion to set a briefing schedule regarding attorneys’ fees crosses that line. Plaintiff’s counsel has yet to establish that their client will be the prevailing party….”
Hudspeth ended his order with another line from the song, “They’ll be time enough for countin’ when the dealin’s done.”
The legal battle between USAA and Mitek, over technology that allows USAA’s customers to remotely deposit checks using a smartphone, goes to trial Sept. 8. Recently, Hudspeth granted USAA’s motion to dismiss patent infringement claims brought against it by Mitek.
Mitek's development timeline and records of communication with USAA about their product prior to USAA filing suit will go a long way toward discrediting USAAs claims.
USAA v. Mitek
USAA filed a complaint against Mitek on March 29, 2012 seeking a declaratory judgment that USAA’s products do not infringe on Mitek’s Mobile Deposit patents or, alternatively, that these patents cannot be enforced against USAA. USAA also wrongly alleged that Mitek took unidentified information from USAA and incorporated it into a Mitek patent application in January 2008 and launched Mobile Deposit based on such information.
Mitek believes that USAA’s claims of misappropriation are without merit. Mitek launched Mobile Deposit in January 2008 with USAA’s full knowledge, and USAA did not launch its competing product until August 2009. It was only until April 2012 that USAA first accused Mitek of misappropriating information from USAA to —more than four years after first learning about Mitek’s mobile technology.
Mitek v. USAA
On April 12, 2012, Mitek filed a lawsuit against USAA for patent infringement and breach of contract. Mitek also believes that USAA breached the parties’ license agreement by using Mitek products beyond the scope of the agreed-upon license terms, and by disclosing confidential pricing and other confidential information for a Mitek legacy product installation in a lawsuit filed in Texas by USAA against Mitek. On July 18, 2012 Mitek filed a motion to amend its complaint to include the claims of defamation and violation of the Lanham Act for unfair business practices. These claims are based on the fact that USAA has wrongly accused Mitek of misappropriating USAA’s proprietary and confidential information while under contract with USAA and claiming it as its own.
The courts consolidated the foregoing cases in the U.S. District Court for the Western District of Texas. On February 15, 2013, the court granted Mitek’s motion to dismiss USAA’s Lanham Act claim. On July 29, 2014, the Court dismissed Mitek’s infringement claims against USAA. Mitek’s claims against USAA for defamation and Lanham Act violations are expected to go
Looks like breach of license agreement is still on the table.
So I guess it wasn't knocked out by the non-infringment ruling. Good to know.
Article excerpt related to Mobile Deposit:
"Demand in mobile capabilities continues to soar. It’s no surprise that mobile banking capabilities have been the fastest growing features among bank shoppers over the past few years. According to Pew Internet Research as of January 2014 90% of American adults own a cell phone and 58% own a smartphone. Mobile banking has seen a 33% increase and mobile check deposit has seen a 42% increase since last year."
What I'd like to know is if USAA was not infringing on patents because the license extended to both remote and mobile deposit, what was (is) the length of time they can use the patented product before having to renew and pay for continued use? Did the court deem the license perpetual after a certain payment period as USAA asserted?
I know Mitek is not currently doing business with USAA but
is USAA still using Mitek's contributions for free or did they change the formula as it were?
USAA and Mitek may reassess the need for the second trial depending on the results of what is accomplished by the first.
USAA was found to not have infringed on Mitek's patents but that is not the same as the patents being invalid.
I believe at the end of the trial, the court will not make any ruling that invalidates Mitek's patents.
There is no other banking institution that will ever claim that they invented Mobile Deposit.
USAA was the only bank that ever attempted to provide this service to it's customers.
When the case is over, Mitek will be able to issue at PR stating that it's patent portfolio remains intact and that the case has had no impact in that area.
We'll see what happens with breach of contract, fraud, defamation, price disclosed at the like.
I think several of these will go in Mitek's favor. Not sure what they will be worth monetarily.
Maybe USAA will win some, Mitek others and the money will be a wash.
Nice to see a major bank making an effort to inform it's customer base of the easy of Mobile Deposit.
I'm sure Citibank, along with others, would like to reap the cost savings over standard deposits and be able to close unnecessary branches.
SIGN. SNAP. DEPOSIT.
Mobile Check Deposit gives you the flexibility to deposit checks from almost anywhere, right from your phone with the Citi Mobile app.
Simply sign, snap a picture and tap submit - and your deposit of up to $1,000 per day will be sent to the bank with no branch visit needed.
You'll get an email confirmation when the check is submitted, and another when the deposit has been accepted for processing.
Once Enrolled, 3 Simple Steps to Deposit a Check
1. Sign the back of your check.
2. Select your checking account and snap a picture of the front and back of your check.
3. Tap "submit" to send your check image to the bank.
Another top 100 bank. About 15 left.
We need the 3 or 4 majors that Mitek is in talks with to launch MPBP and get some commercials out there. They the masses will say "wow, that looks cool, why doesn't my bank have that.." Then the masses will demand it. Just like what happened with Chase commercial years ago.
They were referring to back office software products like MobiFlow which is where they make their money. Not mobile capture. Banks haven't even had mobile capture long enough to be dissatisfied with it.
The whole point of opening up the platform was that Mitek and Allied weren't selling much themselves. No indication we lost Allied but if so no big loss.
USAAs claims of ineqitable conduct, fraud, breach of contract, etc were really to bolster its non-infringement case. They had an arguement with Mitek over licensing and wanted to beat them to the punch w this lawsuit. They didn't know if they'd win do they claimed as much as they could. The non-infrigement is what they were after.. Non this other stuff. Do you really think they care if some russians helped Mitek with development?
They may not even want to pursue the 2nd trial and save the legal costs.
Mitek can claim lost revenue because of the pricing disclosure did not allow them to price at higher levels. defamation may have harmed its ability to sign more customers than it did and hurt stock price. USAA will claim that defamation had no effect since Mitek was able to sign up thousands of banks subsequently.