A Study On Patent Strategies For Business Method Inventions In Financial Industry

Financial industry is playing growing vital role in economy development. Since the financial products are always related to business method which involved mental activities and rules, patents played a limited role for nearly the entire history of financial products and services. The development of computer and network technology eliminate the obstacles of patentability for business method gradually. The appearance of business method patents provides a good approach for the protection of financial products and strengthens the competitive advantage of financial enterprises, which increased the market and innovation competition greatly in financial industry.Based on the theories of sustainable competitive advantage of resource-based view of the firm, patent strategy and business method patent, the research focus is now directed toward patent strategy in financial industry, which include the framework of patent strategy in financial industry, the patent portfolio strategy for financial business methods, motives to patent and patent litigation strategy. Again, the study combines the methods of normative research, comparative research and empirical research. The main conclusions are as follows.The analysis framework for patent strategy in financial firms comprises patent monitoring, patent acquisition and patent exploitation, which will be affected by the legal system of business method patents and business environment in financial industry.Regarding the legal environment of business method patents, the standards in the US are lenient compared with those of Europe. In addition, the technical requirement is the main character of legal system of business method patent in Europe. As to China, SIPO has followed EPO to a great extent and the criteria are even stricter than those of Europe. With the legal background, the applications and awards at the USPTO are the most and financial players in the US are implementing patent strategy activly.In light of the analysis of patent information, the paper argues non-financial institutes are filing financial patent actively, which will bring big threats to financial players. The number of patents hold by individuals and small enterprises is much more than that of other industries. Financial innovation is mainly dominated by financial institutes rather than non-financial institutes in spite of large numbers applications filed by non-financial institutes. There has been a high ratio of forward citation for financial basic patents, which shows the core technologies in this industry are concentrative. To sum up, patent portfolio has become a crucial strategy in financial players.With regard to the motives to patent in financial industry, besides defensive strategy, offensive strategy and transactional strategy, a new patent strategy named patent troll is increasing popular. The new patent strategy of "being infringed" deliberately in financial industry might baffle technical innovation and increase the phenomena of patent thickets. There is some evidence that patents in this sector are relatively more prone to litigation than patents in general. The research indicates licensing, cross-licensing and negotiation material might be the main motive to patents in financial industry which is related to complex technical industries involving computer software.The value and disclosure of patent has a positive and significant effect in probability of litigation. Therein to, the effect of forward citation and claims is much more important than that of patent family and patented prior art, rather than academic prior art has a more significant impact. Furthermore, the disclosure of patent has a different effect in probability of litigation with different patent value. With a lower patent value, increasing in disclosure will lead to increased likelihood of litigation.