The topic of financial services patents was a
focus of discussion during a panel moderated by Bruce Berman (Brody Berman
Associates) during this year’s IP Business Congress in San Francisco. The
panellists included Michael Chernoff (MDB Capital Group), Andrew Ramer
(Cantor Fitzgerald) and Sean Reilly (The Clearing House Payments
Company). Each panellist had a significant perspective on the future
of patents held by banking and financial services firms, where the majority of
these patents are primarily business methods and software-related.
The
panellists seemed to agree that, overall, values for patents in their industry
have seen a reduction post-Alice Corp. Michael Chernoff stated
that, over the years, he has stressed the difficulty in valuing methods patents,
and the current environment is no exception. However, as history has shown,
markets tend to rise and fall with the tides, and the panellists acknowledged
that the near future could possibly be a low point for methods patents valuations.
Research from Michael Chernoff's firm showed that financial services
companies, as well as major technology companies, continue to seek,
and are receiving, methods patents, albeit not at the same rate as in previous
years. For example, MDB Capital’s analysis of patent applications from 2011 to
2015 shows that eBay owns 585 patent application families related to business
methods and software patents relevant to financial transactions and supporting
technologies, while Bank of America owns 633.
Andrew Ramer envisioned that patenting
activity at his firm, and other financial firms, would continue with regard to
financial service-related technology. While he believed methods-related claims
will still be sought, patent application filings
related to consumer and enterprise facing devices and hardware may increase in the coming
months and years.
Sean Reilly believed that the
focus at the patent office would be on quality and clarity in terms of
business methods patents; he did not feel that stricter legislation is
necessarily the correct way to address issues surrounding the use of software
patents.
The overall tone of this year’s conference
seemed to focus on a pendulum shift from the high values attributed to patents
during the Nortel and Motorola patent acquisitions (here and here) just a few years ago.
Many participants and speakers felt that the current
environment is an extreme situation caused by an uncertainty in case law,
and by the legislative issues still pending in Congress. Despite the
negative headwinds, some feel this may present a unique buying opportunity –- where an increased risk may prove to yield higher returns.
It's hoped that, once some further clarity comes out
of the courts and Congress, the pendulum may swing back towards a
median, which may signal an increase in overall patent values, especially for
software-related patents.
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