Archive: August 9, 2016

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Marketplace lending technology patents held invalid

Marketplace lending technology patents held invalid

By Joseph Valenti, Samuel Reger and Chris Bell

On July 25, 2016, three appellate judges in the United States held that a popular online marketplace lender’s patents were invalid because they merely reflected an “abstract idea” that is not entitled to be patented or otherwise eligible for exclusive protection under American intellectual-property laws.  The practical effect of this decision is that the lender could not sue its competitors for patent infringement where those competitors allegedly used the same techniques to match borrowers with lenders on their own marketplace lending platforms.

The judges from the Federal Circuit Court of Appeals likened the claimed inventions to a “fundamental economic concept” (i.e., an abstract idea) that served as the basis for the consumer-loan industry.  They ruled that simply implementing this concept with “generic technology” to automate the process does not then make it patentable.

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