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.