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Frost Bank in San Antonio Encounters Patent Lawsuit

Frost Bank in San Antonio has been served recently with a patent infringement lawsuit by company Lupercal LLC. The lawsuit identifies Dallas as Lupercal’s place of business, yet there is no entity by that business name registered to do business in Texas, according to the Texas Secretary of State. Lupercal LLC appears to be a Delaware limited liability company, yet a business telephone number cannot easily be found by the press.

Frost Bank isn’t the only bank being hit with a lawsuit from Lupercal; there is also a pending suit against JPMorgan Chase, and previous lawsuits against Citibank, Comerica Bank, and PlainsCapital Bank.  The previous lawsuits have each been dismissed or resolved following the banks’ counter-claims.

Frost is the largest regional bank based in San Antonio, and the patent lawsuit focuses on the bank’s mobile app that allows customers to deposit checks electronically by taking a photo of both sides of the check. According to the lawsuit, “the Frost Mobile App is a computer-implemented method performed by an image submission tool on a user device.”

The lawsuit states that the mobile app tool enables “a user to submit . . . one or more pre-processed images” and alleges that this tool infringes on their patent (U.S. Patent 9,386,094). The lawsuit does not specify how much Lupercal is seeking in payment of financial damages.

USAA and Wells Fargo have just recently been involved in two lawsuits concerning mobile banking/mobile capture technology, with Wells Fargo losing both lawsuits, with over $300 million being awarded to USAA.  Additionally, Mitek, the leading vendor in the mobile-capture industry, has recently sought a declaratory judgment that its technology does not infringe on four USAA patents relating to mobile banking/mobile capture technology.

Although these lawsuits have largely been going on before the current coronavirus pandemic, online banking, and especially mobile deposit of checks, is becoming ever-more important and valuable.  Most, if not all, major banks are offering mobile banking options, and lawsuits like this may limit the options and ability that users will have to online banking, or at least require the banks to license various technologies from the others relating to the mobile banking/mobile capture technology.

We will continue to monitor and keep you updated about this patent lawsuit.

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