Surge in fintech patent applications
Marketplace lending technology patents held invalid

Surge in fintech patent applications

By Alistair Mann and Steven Wulff

Several business publications have recently reported a dramatic increase in the number of patent applications filed globally for fintech-related inventions. According to one widely-reported analysis, 9,545 applications were filed in 2016 which is 500 more than in 2015 and over 49% more than in 2011. The United States is reportedly leading the charge with 4,523 patent filings in 2016 and China, in a somewhat distant second place, filed about half that number in the same year.

A patent gives an inventor exclusive rights to exploit their invention commercially for a limited term (usually 20 years) in return for public disclosure of the invention. The monopoly conferred serves to incentivize innovation and encourages public disclosure of innovations for the advancement of technology and the common good. The recent surge in patent applications clearly reflects a significant uptick in research and development efforts in fintech and shows that innovators in this space are serious about protecting and commercialising the fruits of their labour.

The types of fintech-related inventions seeking to be patented are diverse and include systems for managing bitcoin and blockchain-based currency reserves. Other examples include credit risk assessment tools and artificial intelligence agents for identifying and analysing fraud and irregular trading activities.

K&L Gates has significant experience filing fintech-related patents including for SMEs and large entities in Australia and the United States. Innovators should consider patenting their new fintech technologies to help protect their competitive advantage and reward their R&D efforts.

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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