Protecting fintech: a transatlantic view


Alex Baldwin

Protecting fintech: a transatlantic view

Wright Studio /

Securing rights for fintech inventions is a notoriously tricky task, with a path to patentability made less obvious with common rejection.

Almost a decade ago, the US Supreme Court released its final decision on Alice v CLS Bank, a case related to the patentability of a computer-implemented electronic escrow service.

The court found that the Alice invention was ineligible for patent protection due to claims of the application being drawn to an abstract idea.

Since then, companies looking to protect fintech inventions have been met with incredible uncertainty as to how to get their technology protected, leading them to get creative with how they approach rights protections.

These issues were discussed in-depth by Kate Gaudry, partner at Kilpatrick Townsend & Stockton in Washington, DC, and UK-based CMS partner Rachel Free, in yesterday’s WIPR Patents Live session.

The pair of fintech patent experts shared the jurisdictional differences for patenting and protecting this growing IP area, plus the potential impact of a recent EPO decision and the US litigation process.

Geographical differences

“There is no stereotyped path for fintech patents in the US,” said Gaudry, “The Alice case changed everything regarding your prospects for fintech patents, especially when trying to file as a business method.”

“In the US, trying to get a patent through business methods is tricky right now as there is a history of case law where fintech patents have been invalidated.”

“If you try and file a fintech patent application now, you are met with a rollercoaster of allowance prospects, and trying to predict what the case law will be when the patents are finally examined three years down the line and how the examiners will have been trained in that time can be difficult.”

Across the Atlantic however, the path to patentability is slightly different and more straightforward.

“The short answer is yes, you can get fintech patents in Europe,” said Free. “Generally, you need to prove one of two things in your application, a technical purpose or a technical implementation.

“A technical purpose is where the algorithm in the invention is tied to something in the real world to elevate it above being abstract. Maybe this could be related to cybersecurity, or addressing a load balance issue. The key is to tie it to an engineering problem or purpose.”

“Technical implementation is related to the way that the computer works, for example, the invention might make a process more suited to work on a graphics processing unit (GPU) in a computer.

‘Wait and see’ with G 1/19

Last month, a major decision on computer-implemented simulations was published by the European Patent Office’s (EPO) Enlarged Board of Appeal which could have substantial effects on the fintech patent landscape in Europe.

However, as things stand now, it is a case of “wait and see” to gauge the full extent of the impact.

Free said: “There aren't many simulation decisions but it could lead to assessors being stricter in the COMVIK approach, and applicants will be well advised to become more familiar with that approach when they are drafting applications.”

“To some extent, it is a wait and see but I don't think there will be a drastic overnight change, it is business as usual for the meantime.”

Advice for pursuing patents

Once the application is submitted, the question remains how to navigate the maze of getting your application granted, Gaudry recommended interviewing the examiner as a good step to establish where the application stands and what the potential issues might be.

“Examiners are following a flowchart, it allows you to unpack it with them,” explained Gaudry. 

“It takes a long time to make a full argument in response to a decision, so it is good to talk in an interview to see exactly what the examiner thinks it will take to make the tech patentable and address that. It is also very cost-effective.”

Looking forward

To round off the discussion, Gaudry and Free highlighted machine learning as the key area to watch in fintech patents.

“There is clearly a lot going on in machine learning and distributed identifiers right now,” said Free.

“I agree,” said Gaudry, “Artificial intelligence and machine learning are more prevalent than ever in fintech. It is not surprising, fintech is a very numbers-heavy industry. The industry is using machine learning to support more sophisticated security algorithms because more and more people are being trained in this background.

“In the patent space, machine learning patents are popular because applicants are being told that this is the type of patent you can get, rather than the general business purpose patent.”

Watch ‘Current Trends in Fintech Patents’.

WIPR Patents Live hosts weekly broadcasts from some of the best speakers in the technology sector in the form of virtual panel discussions, roundtables, webinars and presentations.

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Alice v CLS Bank, fintech, Rachel Free, Kate Gaudry, Kilpatrick Townsend & Stockton, CMS