IP Law Daily, PATENT—E.D. Tex.: PNC Bank’s equitable defenses fail to overturn jury’s $281 million award to USAA, (Aug 22, 2022)

By Kevin M. Finson, J.D.

PNC’s prosecution history estoppel and unclean hands arguments were rejected because there was no showing that the narrowing of claims during prosecution was done for reasons of patentability.

PNC Bank was unable to show that equitable defenses justified overturning a jury verdict finding that it had infringed three patents owned by United Services Automobile Association, the federal district court in Marshall, Texas, has held. Prosecution history estoppel did not apply because there was no showing that the patentee had narrowed the patent claims in order to avoid rejection, and PNC’s unclean hands arguments had been previously rejected by the court (United Services Automobile Association v. PNC Bank N.A., August 19, 2022, Gilstrap, R.).

United Services Automobile Association (USAA) was the owner of U.S. Patents Nos. 10,482,432 (the ?432 patent”), 10,013,605 (the ?605 patent), 10,013,681 (the ?681 patent), and 8,977,571 (the ?571 patent), all of which were directed to mobile check deposit technology. The ‘754 Patent is titled “Tracking Customer Spending and Income.” USAA sued PNC Bank N.A. (PNC) for infringement of the patents USAA filed a motion to dismiss arguing that the ‘754 Patent and ‘623 Patent claim patent ineligible subject matter. In November 2021, the court denied the motion. In May 2022, after a weeklong jury trial a verdict was reached finding that PNC infringed at least one claim, that none of the asserted claims were invalid, and that the infringement was willful. The jury found the damages amount was $218,450,000.

After the verdict, the court turned to PNC’s equitable defenses of prosecution history estoppel and unclean hands, to which no jury trial right attached. Because of scheduling issues with another pending case between the same parties before the same court, the parties agreed to forego a bench trial and have the equitable defenses decided on the papers alone.

Prosecution history estoppel. PNC argued that during prosecution, USAA had narrowed its application with regard to a “checking for errors” term and a “presenting photos” term, and that such narrowing reflected a conscious reduction of the claims in order to make them patentable. While the court did find that USAA amended its claims, there was nothing in the record to show this was done for reasons of patentability or to overcome a rejection. Prosecution history estoppel therefore did not apply.

Unclean hands. PNC presented no evidence or argument on the subject of unclean hands that had not previously been raised in a motion for sanctions. The court merely noted that it had already considered the issue and declined to set aside the verdict for the same reasons that it had declined to award sanctions.

The court determined that PNC’s equitable defenses did not give a reason to overturn the jury verdict.

The Case is No. 2:20-cv-00319-JRG-RSP.

Attorneys: Jason G. Sheasby (Irell & Manella LLP) for United Services Automobile Association. Gregory Hayes Lantier (Wilmer Cutler Pickering Hale and Dorr LLP) for PNC Bank N.A.

Companies: United Services Automobile Association; PNC Bank N.A.

Cases: Patent TexasNews GCNNews