Ten Years After: What Are the Effects of Business Method Patents in Financial Services? (Third Quarter 2008 Business Review)

*The views expressed here are those of the author and do not necessarily represent the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System. n recent years, the courts have determined that business methods can be patented and the United States Patent and Trademark Office has granted some 12,000 patents of this sort. Has the availability of patents for business methods increased the rate of innovation in the U.S. financial sector? The available evidence suggests that there has been no significant change in the aggregate trend of R&D investments made by financial firms. In this article, Bob Hunt discusses how recent court decisions and proposed federal legislation may change how firms enforce their patents. In addition, he outlines some of the remaining challenges that business method patents pose for financial companies.