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BCBusiness + Oyen Wiggs Green & Mutala LLP The rise of the financial-technology sector has triggered interest in patents for related technologies.
There are many factors to consider when thinking about applying for a patent. One is to keep an invention to yourself from the outset
The rise of the financial-technology sector has triggered interest in patents for related technologies. While it’s clear that most fintech innovations are implemented via software, less obvious is how feasible it is to get patents for new inventions in this realm.
Patents are essentially a monopoly on certain technology granted to people who develop something new and inventive. However, patents aren’t granted for all technologies, explains intellectual property lawyer Gavin N. Manning, partner at Vancouver’s Oyen Wiggs Green & Mutala LLP.
In the late 1990s and early 2000s, it was common for broad software patents to be granted. That changed after some notable U.S Supreme Court cases. One is known informally as “Alice.”
In 2007, the Australia-based Alice Corporation held U.S. patents for financial-trading sys- tems in which a third party held funds in escrow to mitigate the risk of non-payment. CLS Bank launched its own similar service and Alice accused CLS of patent infringement. CLS sued, alleging that Alice’s patents were invalid.
In 2014 the U.S. Supreme Court sided with CLS, maintaining that a patent must deliver more than an abstract idea to be valid.
In Canada, “laws of nature, mere scientific theories or abstract algorithms,” including the use of a computer to perform otherwise un-patentable methods, are not patentable.
After Alice, the number of rejected software patent applications soared.
“With the Alice decision and various court decisions that followed, there was a severe effect of limiting the availability of patents, particularly in certain areas, like financial technology,” Manning says.
However, things continue to shift. “We are now starting to see more areas in which patents may still be available in these fields,” Manning says. “It is necessary to look at new inventions through a different lens.
“There’s still opportunity to obtain patents for things that involve online business,” he adds, “but instead of claiming things that could be abstract ideas, you need more focus on the solutions to technical problems.”
Just as those who are discovering the patent system for the first time may not be aware of its associated limits, there are other common misconceptions. One is that inventors may not fully appreciate how much effort goes into a patent application.
“People may believe that if they file a bit of paperwork, their patent application will soar through,” Manning says. “They may underestimate how long it is likely to take and how much work it is likely to take to convince patent examiners that a particular technology is the stuff they ought to be giving out patents for. Unless the first patent application for an invention is completely solid, the likelihood of successfully obtaining a valuable patent is dramatically reduced.”
There are many factors to consider when thinking about applying for a patent. One is to keep an invention to yourself from the outset. You need to file a patent application first before going public.
“If you make your technology public first, it instantly ruins your opportunity to get a patent in many countries,” Manning says, noting that Canada and the U.S. have a one-year grace period for disclosures by the inventor.
Often, the first step is to seek professional advice from the Oyen Wiggs team in order to streamline the process and pave the way toward success, says Manning.