Information Regarding Litigation with USAA

Frequently Asked Questions

This is a factual update on the status of the case as of 8/25/2014:

What is the origin of the dispute between the two companies?

USAA, according to its own reports, had exceeded the transactional limit covered by its software license. Mitek attempted to get USAA to move from the outdated platform to the current Mobile Deposit 3.3 software at market rates. USAA refused and decided to litigate instead.

When is the trial? How long is it expected to last?

The trial date has been set for September 8, 2014 and is expected to span a 2-3 week period.

Did the judge dismiss any of USAA’s claims?

Yes. The Court rejected USAA’s motion to dismiss Mitek’s claims against USAA for Lanham Act violations and defamation.  Also, the Court bifurcated USAA’s claim of “inequitable conduct” related to inventorship on some of Mitek’s patents, so these claims will not be heard by the jury at this trial.

 What is the Lanham act and why is it important?

The Lanham Act prohibits a number of activities, including false advertising.  The Court ruled that Mitek can proceed to trial on its claims under the Lanham Act and common law defamation for the damage caused to Mitek by USAA’s public accusations of trade secret misappropriation.

 The patent claims filed against USAA were dismissed.  What does this mean?

This means that those claims will not be presented to the jury at this trial. All of Mitek’s 8 Mobile Deposit patents, which comprise 163 individual patent claims remain valid. Mitek’s Lanham Act and defamation claims against USAA will be heard by the jury at trial starting September 8, 2014.

What remedies is Mitek seeking?

Mitek seeks monetary damages and a finding that USAA defamed Mitek, violated the Lanham Act, and breached the parties’ license agreement.

What USAA claim is going to trial against Mitek?

USAA wrongly alleges that Mitek took unidentified information from USAA and incorporated it into a Mitek patent application in January 2008, launched its Mobile Deposit based on such information, and that USAA did not learn about Mitek’s product until it read a Mitek regulatory filing that was published in January 2009.

Why did Mitek file the lawsuit? 

As a technology company, Mitek is compelled to protect its intellectual property on behalf of the company and its shareholders. Mitek also takes great pride in being an ethical and responsible business partner to the banking industry and enjoys good working relationships with more than 2,500 banking partners around the country. Mitek did not begin this lawsuit, but it countersued to protect its inventions and its business reputation.

Why are USAA’s accusations false?

USAA claimed that Mitek stole its confidential information to develop Mobile Deposit. Mitek believes it alone invented and perfected its Mobile Deposit technology over several years. The Company has been awarded 20 total patents, 8 of which are directly related to Mobile Deposit. Mitek initiated frequent communications with USAA about Mitek’s Mobile Deposit product starting in January 2008, and USAA never suggested that Mitek’s product was based upon information originating from USAA before filing the lawsuit in March 2012.

 

Overview

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 to trial on September 8, 2014.

Mitek Litigation Timeline