Tag Archives: banks

Can blockchain be a game-changer for millions of IP transactions?

The abundant promise of blockchain has yet to be realized. To many in IP, finance and tech, it is just beginning to come into sight.

The initial application of blockchain’s distributed ledger, bitcoin, has turned out to be more of a speculative sideshow than a legitimate alternative currency. We hear repeatedly that bitcoin is merely the first of many possibilities, and that blockchain should not be judged on the basis of bitcoin.

Fundamental Change?

One of the most intriguing areas of potential for blockchain, or encrypted distributed ledger of data, is transacting IP rights — so-called smart transactions. Smart transactions aim to make more efficient millions of copyright, patent and trademark licenses by providing greater transparency and the removing costly middlemen. It sounds great – but can it really happen or is it merely the alchemists’ fantasy?

In April, Managing Intellectual Property, magazine ran a feature on blockchain, “Blockchain Party,” which can be found here. The special report discusses how blockchain will fundamentally change IP transactions, and haw already started to. The race for blockchain patents is well under way, with U.S. and some European banks, fintech firms and tech companies jockeying for position with the Chinese.

Who use blockchain?

The following infographic from Bitfortune.net, a bitcoin promotion and gaming website, offers 16 industries and areas where distributed ledger adoption is underway. (Sources for the data are offered at the bottom of the graphic. They have not been checked.)

Bitfortune says “many experts believe that blockchain will change our world in the next 20 years as much as the internet has over the past 20.”

[Three useful blockchain articles follow the long infographic below.]

 

More on blockchain:

IP CloseUp: 59% of blockchain patents are owned by developers; BofA and IBM dominate banks and tech players.

DS Avocats: Blockchain, Smart Contracts and Intellectual Property.

WIPO Magazine: Blockchain and IP Law: A Match Made in Crypto Heaven?


Inauspicious Beginnings

Can blockchain shake off its inauspicious beginnings as bitcoin foundation and deliver on its promise?

Many are pulling for it, including me and several banks, fintech businesses and technology players, who are either investing heavily or hedging their bets.

 

Image source: bitfortune.net

Fintech patent competition: fierce, diverse, growing

Among the most watched areas for new patent value is financial technology, covering inventions in areas like authentication, mobile payments and wealth management.

Fintech is among the few bright spots in the patent landscape, with leading banks like JP Morgan, Bank of American and Wells Fargo, and credit card companies like Visa, MasterCard and American Express deeply involved and competing with a broad range of new entrants, including:

• Traditional banking industry vendors such as Fiserve and IBM

• Scores of venture funded start-ups, some supported by former banking executives

• Established technology players such as Apple, Google and Amazon looking to capitalize on their   consumer recognition by expanding into banking and payments.

Close behind is leading Korean bank Shinhan and Bizmodeline Co., Ltd, a Korean company with a total of 2700 patents, 1000 patents related to Financial and Billing, 1400 patents related to Mobile, Ubiquitous, RFID and NFC, 300 patents related to authentication and other technologies. A host of Japanese companies, like HitachiToshiba, Sony and NEC, have become more active in identifying and developing inventions in the transaction space; Microsoft, too.

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“Start-ups, big tech and… banks,” in the current IAM magazine, The Intangible Investor, looks at the diverse competition in this space. (Subscribers can find the piece, which I wrote, here.)

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For more good background, “FinTech: An IP Perspective,” is a comprehensive report from IP research firm, Releclura. It outlines the players in the space and details the patents they have accumulated and in which areas of banking or transaction. The report can be found here.

A summary of the Relecura research compiled by IP consulting firm Aistemos, with charts and graphs, can be found here.

Execs Poised to Profit

According to The Financial Times, former banking executives are all over fintech startups, hoping for a big payout. See “Former Wall Street titans shake-up banking with fintech investments.” 

In the Wall Street Journal, “Banks and Fintech Firms’ Relationship Status: It’s Complicated,” discusses how disrupters and big lenders, often seen as rivals, are finding some success playing together.

Top holders

Fintech upstarts have attracted more than $50 billion in investments on the premise that they will disrupt banking and finance the way Uber or Airbnb have the taxi and hotel industries. But despite a decade of stumbling the banking industry has proven a tougher business to crack than some had thought. The American Banker speculates that the fintech sector may be overheating.

“’It’s too simple to say all these banks are stupid,’” says Qasar Younis, a partner at the Silicon Valley seed fund Y Combinator.

Like Big Pharma

The banks, much like some of the pharmaceutical companies, are smart enough to know that they will not be able to come up with all of the technology solutions they need to succeed, and that they have the capital, markets and regulatory savvy that others need.

For more information, Forbes’ top fintech stories for 2015, go here; their “Fintech 50” also provides a good overview of the up-and-comers, here.

Image source: americanbanker.com; CB Insights; Relecura 

 

Schumer: Strike Affirmed Patents That Cost Banks $400m

Senator Seeks Free IP Pass for Banks –

Senator Charles Schumer, D-NY, a staunch supporter of financial institutions in his home state, is seeking a double standard for patent rights that have been both granted and re-examined.

He is helping banks try to reverse a patent ruling that has required them to pay $400 million in legal settlements and license fees to a small Texas company, Data Treasury Corp.

A provision inserted by Schumer into the long-awaited “American Invents Act” (H.R. 1249), which according to sources is will come before the House starting on Wednesday, June 22 at noon EST, appears to have only one aim: Strip DataTreasury Corp., of Plano, Texas, of a patent for processing digital checks that has made the company wealthy at banks’ expense. At least two House members are said to want the provision removed.

In November 2005, First Data Corporation filed a request for a reexamination of the DataTreasury Ballard patents citing numerous earlier publications that it felt either anticipated the DataTreasury inventions or made them obvious. In 2007, the USPTO not only upheld both patents but further allowed DataTreasury to claim additional inventions that were disclosed but not claimed in the original applications.

Reported the The New York Times:

“[Inventor Claudio Ballard] bristles at the characterization of DataTreasury as a company that merely exploits dubious patents.

“It is true that the company now is just a holding company for the patents with only a few employees. At one time it had more than 100 — before the banks stole his patented technology, he said.

“‘I didn’t invent the scanner; I didn’t invent networking, or computers or software,” he said. “But I am an expert at systems integration, and I created this complete end-to-end solution” for digital check processing.'”

More than three dozen banks and financial institutions have settled with or signed license agreements with DataTreasury to use its inventions, including Bank of NY Mellon, Bank One, Citibank, Diebold, First Data, JP Morgan Chase, Mellon Bank, Merrill Lynch, NCR and PNC Financial Services.

Read more on Newsmax.com: Schumer Sides With Banks Against Patent Holder.

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What is Schumer thinking? The courts via Bilski have already spoken on business method patents. Besides, financial institutions and their local Senator should be careful what they wish for.

The House of Representatives should not permit valid, licensed and reexamined patents to be held to a separate, higher standard so that a select group of infringers can avoid paying licensing fees. If it does, expect fewer investors to risk their capital on innovative businesses and new technologies.

Illustration source: bastiatinstitute.org

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House Republicans Reach Accord on Bill

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A note from Hal Wegner via the Internet Patent News Service:

“A tentative deal has apparently been reached amongst House Republican leadership factions on the America Invents Act that makes it “likely” that it will start to be considered in the House floor this Wednesday:

Thus, the House GOP leadership has announced a schedule for next week which includes the following: ‘On Wednesday, June 22, 2011 the House will meet at 12:00 p.m. for legislative business… and likely begin consideration of H.R. 2021 1249 – America Invents Act.'”


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