United Servs. Auto. Ass’n v. PNC Bank N.A

Authored by: Jeremy J. Gustrowsky

In a significant decision for financial technology patents, the Federal Circuit reversed a lower court’s ruling and found that United Services Automobile Association’s (USAA) patent on mobile check deposit technology was not eligible for patent protection. The case, United Servs. Auto. Ass’n v. PNC Bank N.A., centered on U.S. Patent No. 10,402,638, which describes a system allowing customers to deposit checks by photographing them with a mobile device and transmitting the image to their bank.

USAA argued that its patent represented a technological improvement over earlier systems that required specialized equipment. However, the Federal Circuit disagreed, holding that the patent’s claims were directed to the abstract idea of depositing a check using a mobile device—something banks and customers have long done, just now with a different tool. The court noted that simply implementing this process on a generic mobile device, without any specific technological improvement or inventive concept, was not enough to make the idea patent-eligible.

The court applied the two-step test from the Supreme Court’s Alice decision. First, it found the claims were indeed directed to an abstract idea. Second, it concluded there was no inventive concept that transformed this idea into something patentable. The court pointed out that the steps in the patent—such as taking a photo, using optical character recognition (OCR), and transmitting data—were all routine and well-known, and using a mobile device did not add anything inventive.

This decision is a reminder that for software and business method patents, merely moving a traditional process onto a mobile device or computer is not enough for patent eligibility. The technology must offer a specific, non-conventional improvement to be patentable. As a result, USAA’s claims were invalidated, and the court did not need to address further issues in the case.