Mitek Systems Inc. v. United Services Automobile Association, Appeal No. 2023-1687 (Fed. Cir. June 12, 2025)

In our Case of the Week, the Federal Circuit examined the limits of declaratory judgment jurisdiction for a software supplier whose customers had been accused of infringing certain mobile banking patents.  Appellant Mitek provides automatic image capture technology to banks for incorporation into mobile check deposit applications, against which USAA had sought to enforce its patents through a series of demand letters and lawsuits.  In a detailed opinion, the Federal Circuit rejected Mitek’s bid for declaratory judgment of non-infringement, and affirmed the district  court’s dismissal of Mitek’s case for lack of subject matter jurisdiction.

Mitek had sought to establish jurisdiction based on a purported “reasonable apprehension of suit,” which is one way to demonstrate a “case or controversy” suitable for declaratory judgment.  The Court rejected this argument, finding that Mitek’s general-use image capture software was not implicated by the specific claims of USAA’s asserted mobile deposit patents.  Banks purchasing Mitek’s product had to customize it for incorporation into their own mobile banking platforms, and USAA had never accused Mitek’s software alone of satisfying every limitation of any asserted claim.  The Court also queried whether Mitek faced potential liability for induced or contributory infringement, but similarly found that USAA had never cited Mitek documentation or instructions for inducement of all elements of any claim, and it was undisputed that Mitek’s image capture technology was capable of substantial non-infringing uses.

The Court also noted that since Mitek filed its lawsuit, the only customer cases involving the specific patents Mitek sought judgment on had settled, indicating that even if a reasonable apprehension of suit had existed at the time of filing, it was not ongoing.  Notably, the same day it affirmed dismissal of Mitek’s suit, the Federal Circuit also affirmed dismissal of another USAA mobile banking infringement case, finding that the remaining patents asserted in that case were patent-ineligible under 35 U.S.C. § 101.  (See United Serv. Automobile Assoc. v. PNC Bank N.A., below.)

The Court also rejected Mitek’s arguments based on alleged indemnification demands from its customers.  While a valid obligation to defend its customers might have provided Mitek standing for its declaratory judgment claims, the Court explained that the “existence of these agreements alone” was insufficient to confer standing.  On the record presented, the Court found that most of Mitek’s agreements were with third-party financial services providers who in turn had indemnification agreements with the accused banks.  Mitek had not established a case or controversy between these third-party providers and USAA, and the Federal Circuit further agreed with the district court that each agreement contained carve-outs precluding a reasonable potential for indemnification liability by Mitek.

Finally, although it agreed that subject matter jurisdiction was lacking, the Court went on to explain that even if it was not, the district court would have properly exercised its discretion to decline to hear Mitek’s claims.  Because Mitek’s software was customized by the accused banks in ways that raised infringement issues unique to each case, the district court reasoned that Mitek’s lawsuit could not be litigated without extensive participation from those banks, and was in any event unlikely to fully resolve whatever uncertainty or controversy had given rise to Mitek’s claims.  The Federal Circuit agreed with the district court that in such circumstances, the best way for Mitek to defend its interests would be to intervene in a future USAA suit accusing a Mitek customer, if any.

The opinion can be found here.

By Jason A. Wrubleski

ALSO THIS WEEK

United Services Automobile Association v. PNC Bank N.A., Appeal Nos. 2023-1639, 2023-1866, 2025-1276, 2025-1341 (Fed. Cir. June 12, 2025)

In this appeal from the United States District Court for the Eastern District of Texas, the Federal Circuit reversed the district court’s grant of summary judgment of patent eligibility under 35 U.S.C. § 101, holding that the patent at issue relating to a mobile check deposit system was directed to an abstract idea and did not contain an inventive concept.  The subject patent specifically claimed a system for allowing a customer to deposit a check using a customer’s handheld mobile device, and included the steps for carrying out this process, including instructing the customer to take a photo of the check, using a wireless network to transmit a copy of the photo, and having the configured system check for errors.  In reversing the district court’s grant of summary judgment of patent eligibility, the Federal Circuit reasoned that the claim merely recited routine data collection and analysis steps that have been traditionally performed by banks and people depositing checks, and that the addition of a handheld mobile device to carry out these routine steps did not make the claim any less abstract.  The Court further reasoned that computer-mediated implementation of routine or conventional activity was not enough to provide an inventive concept sufficient to transform the abstract idea into a patent-eligible application.

The opinion can be found here.

By Mario E. Delegato

Agilent Technologies, Inc., v. Synthego Corp., Appeal Nos. 2023-2186, -2187 (Fed. Cir. June 11, 2025)

In Agilent’s appeal from inter partes reviews finding all claims of two of its CRISPR-related patents unpatentable, the Federal Circuit affirmed.   The Court rejected Agilent’s argument—relying on the Supreme Court’s recent decision in Amgen Inc. v. Sanofi, 598 U.S. 594 (2023)—that an anticipatory prior art patent application failed to satisfy the enablement requirement of 35 U.S.C. § 112.   The Federal Circuit distinguished Amgen, explaining that Amgen concerned whether a patent satisfied § 112 for purposes of determining its own validity.  By contrast, when assessing enablement of the prior art for anticipation purposes under § 102, “only a single embodiment” of the reference needs to be enabled.  Moreover, the Court agreed with the Board that the prior art did not require “painstaking experimentation” but rather, “a person of ordinary skill in the art understood ‘how the different elements of a CRISPR/Cas system are used and function together, including the role of gRNA’” because, inter alia, the prior art “did not ‘disclose any new techniques for synthesizing chemically-modified gRNAs.’”  The Court also found that substantial evidence supported the Board’s determinations that the prior art references disclosed the claimed gRNA functionality, and that a skilled artisan would have been motivated to combine them to arrive at the claimed subject matter.

The opinion can be found here.

By Jeff Liao

Fraunhofer-Gesellschaft Zur Forderung Der Angewandten Forschung E.V. v. Sirius XM Radio, Inc., Appeal No. 2023-2267 (Fed. Cir. June 9, 2025)

In a second trip to the Federal Circuit, the Court reversed the district court for a second time.  The case involves expired patents for satellite radio.  In its first trip to the Federal Circuit, the Court reversed the district court’s decision dismissing the case for failure to state a claim.  We covered that appeal here.  On remand, the parties collectively filed thirteen motions for summary judgment.  The district court granted summary judgment to Sirius on the affirmative defense of equitable estoppel.  The Federal Circuit remanded, finding a genuine dispute of material fact as to the reliance factor.  While there was testimony about a business decision to pursue the infringing path over a non-infringing path, that evidence was inconclusive about whether it had anything to do with representations by Fraunhofer, as opposed to other business factors.  The Court reversed and remanded for the district court to resolve the other ten summary judgment motions filed by the parties, which the district court had concluded were moot following its grant of summary judgment on equitable estoppel grounds.

The opinion can be found here.

By Nika Aldrich

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.