We catch up with Jonathan Midgley for his expert opinion on patents surrounding the new technologies used in financial services and related areas, such as banking and insurance.

What is Fintech?

There isn’t a universally agreed upon definition of Fintech but, broadly speaking, it relates to new technologies used in financial services and related areas, such as banking and insurance.

These will often involve some sort of computer-implemented invention, which uses software to achieve its core purpose.

Examples might include mobile banking apps, digital payment systems or cryptocurrency management systems.


Can Fintech inventions be protected with a patent?

Yes, a lot of Fintech inventions can be patented and this includes the large proportion of inventions in the sector that are based on computer software.

There are quite a few misconceptions around software patents, but there are actually an increasingly large number of patents being registered for Fintech inventions.


Why patent inventions in the Fintech sector?

The pace of development in the Fintech sector could make it seem as if there is little value in patenting inventions, especially when you consider that it can take a number of years to go from application to grant.

However, patents can open up new commercial opportunities through activities such as licencing, as well as providing a more general competitive advantage in preventing competitors from duplicating your inventions. A portfolio of patents can also help to underpin the value in a company which is important where a sale is considered.


What are the challenges around patenting Fintech?

The assumption that software-based inventions cannot be patented is not entirely groundless. The principle of ‘mere computerisation’ means that existing physical processes cannot simply be translated into computer programs and then patented. There needs to be something novel in the invention.

This novel element does not need to be the unique selling point (USP) of the product and will often not be obvious to the developer or its target audience.

For instance, this feature could be something to do with security features that were not present in a broadly equivalent process before it was computerised.

As a hypothetical example, a banking app could translate processes that were carried out previously using paper statements and chequebooks into a software-based process but with novel security measures, such as the use of blockchain technologies. That would then potentially be patentable.

Whether a particular software-based invention is an instance of ‘mere computerisation’ can be a fine judgement and there is a considerable body of case law on the topic.

It is also important to identify an aspect of the technology that is significant to its function and commercial value. The aspect that is protected needs to be sufficiently important that the product could not be copied by competitors without infringing the patent.

There are other considerations that also need to be taken into account including how the patented aspect of the invention will be used commercially.

For this reason, businesses developing products in the Fintech sector need to work closely with a patent attorney who has strong experience of software-based patents and the financial sector.


Jonathan Midgley

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