The suit, filed late last month in the US Federal Court, Western District, in San Antonio, Texas, alleges "misappropriation of USAA's proprietary information, breach of contract and fraud, among other claims. The bank is also seeking an injunction on Mitek using USAA's intellectual property and unspecified damages, in addition to a recovery of an alleged $381,000 overpayment to the vendor.

USAA spokesman Paul Berry says, "USAA invented remote deposit capture technology to meet the needs of our highly mobile military membership, enabling them to deposit cheques with a scanner or smartphone wherever they may be stationed. USAA has invested substantial time and money in the development and implementation of an invention which has revolutionised the banking industry."

USAA's action follows an escalating dispute with Mitek, which claims that the bank infringed on its patents when launching its own RDC product. USAA in turn alleges that Mitek's patent filings made "improper use and disclosure of USAA confidential information", dating back to a prior engagement in which the bank used Mitek's cheque reading software as a 'component' of its own inhouse remote deposit technology programme.

"Mitek misappropriated USAA's proprietary and confidential information while working under contract for USAA, and then took numerous steps to claim it as its own," says Berry. "USAA filed this lawsuit to protect USAA members and our association."

In a statement, Mitek Systems president and chief executive James DeBello says: "It's unfortunate when business negotiations break down...We believe these claims are without merit and we intend to vigorously defend our intellectual-property rights, as necessary."

The popularity of mobile deposit technology among US banks and consumers has proven a boon for Mitek Systems, which last year raised $15 million through a share sale after reporting record revenues and earnings. The company's stock price fell 11% on Tuesday on news of the suit.