The Litigation of Financial Innovations

The past 10 years have seen a profound change in the conditions under which financial innovations are pursued. Because patents fundamentally alter the way in which innovations can be used, assessing the impact of patenting is critical to understanding the future of financial innovation. Litigation is crucial to delineating the boundaries of patent awards, and this paper examines the litigation of such financial patents to gain insights into the future of financial innovation. This paper seeks to understand the litigation of financial innovations, an area where patents have only recently been granted. Key concepts include:

• Financial patents are litigated two to three dozen times more frequently than patents as a whole
• The awards being litigated are disproportionately those awarded to individuals and to smaller, private entities
• Patents with more claims and more citations are also more frequently litigated
• Larger firms are disproportionately targeted in litigation.