Does State Street Lead to Europe? The Case of Financial Exchange Innovations

Abstract

We study whether financial exchange innovations are patentable in Europe. We find that exchange‐related patent applications surged after the State Street decision. The majority of the applications come from the USA, investment banks and exchanges being among the most active innovators. But the applications seldom result in valid patents, and the post‐grant opposition rate is very high. The evidence suggests that patentability standards for financial innovations have not weakened in Europe after the State Street decision and that the combination of inventive step and technical contribution requirements constitutes a major obstacle for applicants seeking financial patents in Europe.

Technological Innovation and the Bank Lending Channel of Monetary Policy Transmission

“…Here, our paper also adds to the literature on the determinants of financial innovation and patenting (see Lerner et al 2023 for an overview). Initial contributions to that literature, including Lerner (2002Lerner ( , 2006, Hall et al (2009) and Komulainen and Takalo (2014), were largely inspired by the changes in the legal treatment of financial patents in the United States. More recent contributions such as Chen et al (2019), Fu and Mishra (2022) and Jiang et al (2021) provide patent-based evidence of FinTech innovations.…”