CUNA Mutual Group Issues Risk Alert on USAA Remote Deposit Capture Lawsuits

Last week a U.S. District Court awarded USAA $200 million in a patent infringement lawsuit against Wells Fargo involving remote deposit capture (RDC) technology.

Credit unions have been closely watching the case as USAA has previously sent letters to many credit unions asking them to negotiate voluntary licensing agreements for RDC and several related patents. There is concern that USAA may actively enforce these patents, which could lead to litigation against credit unions.

CUNA Mutual Group recommends the following to mitigate your credit union’s risk:

• Review your RDC vendor licensing agreement or services agreement for the terms that govern notice to the vendor of other parties asserting patent rights. Licensing and services agreements may contain a deadline for notifying the vendor when customers receive correspondence, and failure to provide notice within a specified timeframe could result in the credit union waiving its rights to be indemnified and held harmless by the vendor.
• A credit union receiving a voluntary patent licensing letter should promptly provide written notice to the vendor in the manner and to the address specified in the vendor’s licensing or services agreement. Such agreements often provide that the addresses listed within the agreement can be changed by written notice. Prior to mailing any correspondence, credit unions should verify whether they previously received a change of address notice from the vendor.

View CUNA Mutual Group's Risk Alert here.