IP Law Daily, SUPREME COURT NEWS—USAA asks U.S. Supreme Court to revive invalidated mobile check deposit patents, (Jan 21, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

The Federal Circuit misclassified a concrete technological process as an “abstract idea,” nullifying jury verdicts totaling more than $220 million and improperly narrowing patent eligibility, USAA alleges.

United Services Automobile Association (USAA), a Texas-based financial institution, has filed a petition for certiorari before the U.S. Supreme Court challenging the Federal Circuit’s reversal of two infringement verdicts it secured against PNC Bank. USAA contends that the appellate court fundamentally misapplied the Supreme Court’s two-step test from Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014), by misclassifying a specific technological process as an abstract idea and by excluding innovations that improve user experience from patent protection. The petition urges the Court to clarify the limits of the judicially created “abstract idea” exception under section 101 and to restore the jury verdicts totaling $222.75 million (United Services Automobile Association v. PNC Bank N.A., No. 25-853 (U.S. Jan. 20, 2026)).

Background. USAA, a member-owned financial cooperative based in Texas, provides a wide array of banking services to military personnel and their families. To address logistical obstacles in traditional banking, USAA developed the Deposit@Mobile system, enabling users to deposit checks by photographing them with a mobile phone. The technology eliminated the need for specialized scanners. PNC Bank, a large national bank with its own mobile platform, was accused of adopting similar remote deposit features without authorization. USAA sued PNC for patent infringement in 2020 and 2021 in the Eastern District of Texas.

The patents at issue are U.S. Patent Nos. 10,402,638 (the ’638 patent), 10,482,432 (the ’432 patent), 10,013,681 (the ’681 patent), and 10,013,605 (the ’605 patent). Filed between 2006 and 2018, the patents disclose systems and methods for capturing check images using a mobile device, guiding the user through the capture process, performing OCR (optical character recognition) to extract check data, and validating the captured image against technical deposit requirements.

After filing suit, USAA proceeded to trial in two cases that were eventually consolidated. In both, the district court denied PNC’s motions for summary judgment under section 101, holding that the asserted claims were not directed to an abstract idea and that the patents recited eligible subject matter. The court found that USAA’s technology solved a concrete technological problem by enabling mobile devices to perform functions historically reserved for specialized equipment. Following five-day jury trials, USAA obtained favorable verdicts in both cases. The jury awarded $218.45 million in the first action and $4.3 million in the second. Both verdicts were based on findings of willful infringement. The district court declined to address Alice Step Two because it had already concluded that the claims were not abstract.

The Federal Circuit reversed in two consolidated opinions issued on June 12, 2025. The appellate court held that the asserted claims were directed to the abstract idea of “depositing a check using a handheld mobile device,” and that the claims lacked any inventive concept to transform that idea into patent-eligible subject matter. At Alice Step Two, the court rejected USAA’s expert evidence as insufficient and determined, as a matter of law, that the claim elements, including image capture, OCR, and mobile app control, were routine and conventional. The court entered summary judgment for PNC and vacated the jury awards in their entirety. USAA’s petitions for rehearing en banc were denied on September 16, 2025.

Petition. USAA argues that the Federal Circuit’s core error lies in its misapplication of the “abstract idea” exception. The concept of depositing a check using a mobile phone is not a mental process, economic practice, or mathematical algorithm, the petitioner argues, but rather a concrete technological process implemented through specific hardware and software interactions. Citing Diamond v. Diehr, 450 U.S. 175 (1981), and Bilski v. Kappos, 561 U.S. 593 (2010), USAA contends that the statute was intended to be broad and that applications of ideas to new and useful ends remain eligible for patent protection. By reducing its invention to a generalized “idea,” the court of appeals ignored the specificity and technical character of the claimed method, the petitioner claims.

USAA also challenges what it calls the Federal Circuit’s rigid “functionality” rule. In cases such as Simio, LLC v. FlexSim Software Prods., Inc., 983 F.3d 1353 (Fed. Cir. 2020), and Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020), the court has held that software innovations must improve the functionality of the computer itself, not merely enhance the user experience, to qualify as patent-eligible. USAA argues that this distinction finds no support in section 101 or in Alice. The Court in Alice emphasized that applications of abstract ideas to new technological ends remain eligible. USAA asserts that improving the user’s ability to conduct remote deposits on consumer-grade devices is a legitimate technological improvement, even if it does not enhance the mobile device’s core operating system.

The petition further asserts that the Federal Circuit improperly resolved factual disputes at summary judgment, denying USAA its right to a jury trial on critical questions under Alice Step Two. In Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018), the court held that whether a claim recites well-understood, routine, and conventional elements is a question of fact. USAA submitted expert testimony explaining why its patented process, using a mobile app to guide image capture and perform OCR to extract MICR data, was not conventional in 2006. PNC submitted no contrary expert evidence. Yet the appellate court dismissed this evidence without discussion and declared the technology routine as a matter of law. USAA argues that this approach violated established precedent and denied it an opportunity to present its case to a jury.

According to USAA, the decision below reflects a broader problem in Federal Circuit jurisprudence. The petitioner identifies several cases in which the appellate court has invalidated software and hardware patents under the “abstract idea” exception, including Yu v. Apple Inc., 1 F.4th 1040 (Fed. Cir. 2021) (dual-lens camera system), Chamberlain Grp., Inc. v. Techtronic Indus. Co., 935 F.3d 1341 (Fed. Cir. 2019) (wireless garage door opener), and Recentive Analytics, Inc. v. Fox Corp., 134 F.4th 1205 (Fed. Cir. 2025) (machine learning event scheduler). USAA contends that these cases demonstrate an overbroad interpretation of abstractness that undermines the predictability and stability of the patent system. The petitioner urges the Court to clarify that concrete technological innovations should not be excluded from patent protection simply because they are implemented in software or improve user interaction with digital systems.

Relief. USAA asks the Supreme Court to grant certiorari and reverse the Federal Circuit’s judgment. The petition specifically requests the Court to clarify that (1) the “abstract idea” exception under section 101 does not extend to concrete technological processes, and (2) an improvement to user experience, when implemented through technical means, qualifies as patent-eligible subject matter. USAA also asks the Court to reaffirm that the presence of factual disputes under Alice Step Two precludes summary judgment and requires submission to a jury when supported by credible evidence.

The petition contends that these clarifications are urgently needed to restore consistency in patent eligibility doctrine and to prevent the erosion of protections for software-enabled innovations. Absent such intervention, USAA warns, inventors in fields like mobile banking, AI, and digital health will face significant uncertainty about whether their inventions are protectable.

The Case is No. 25-853.

Attorneys: William M. Jay (Goodwin Procter LLP) for United Services Automobile Association. Mark Christopher Fleming (Wilmer Cutler Pickering Hale and Dorr LLP) for PNC Bank N.A.

Companies: PNC Bank N.A.

News: Patent FedCirNews