CC: You’ve warned that operating companies are getting into increasingly entangled relationships with patent assertion
entities. Are you talking about privateering relationships, and why are those necessarily bad or dangerous?
M Y: I’m not just talking about privateering
in the simplest sense, when an operating
company would assign its patents over
to a nonpracticing entity and the NPE
would assert them. It’s gotten actually
more complicated than that.
We have such a dynamic global economy right now. Every year you see companies that are doing great, and you see
huge integrated companies that are no
longer as high as they used to be. So you
have increasing amounts of pressure on
these operating companies to monetize
their patent assets because in some cases
they’ve spent hundreds of millions of dollars prosecuting them.
What we’ve seen more and more is
divestitures of patents from these oper-
ating companies, but not in ways that
are readily apparent. Our research team,
which has crawled through the public
data, the public filings, as well as matched
it up with our proprietary data, is able to
get a better picture of what’s happening.
This morning I was just looking at
some of that data. And there’s an operating company that used to sell lots and
lots of product but their revenues have
declined in recent years. They have an
enormous patent portfolio. Over the past
few years they’ve assigned over 2,700 patents to a couple of dozen NPEs, and those
NPEs have asserted 55 of them in nine
You might know if you were sued in one
of those campaigns that ultimately this pat-
ent originated from X company. But ulti-
mately I think there’s very few [who know]
the enormous impact of this one company
from how much they’ve divested. So I
think the more we can shine a light on it,
the more beneficial it will be to the indus-
try so that companies can focus on innovat-
ing and not just litigating by proxy.
CC: A lot of people credit RPX and other
aggregators with dialing down risks in the
patent arena, along with patent reform
legislation and recent U.S. Supreme
Court decisions. What is RPX’s pitch to
clients in this less volatile era?
M Y: We’ve spent the past 10 years trying to
reduce the risk from patents, and trying to
make patent risk more predictable. We’ve
made significant progress toward that goal.
But in some ways we’re still just beginning.
It took so much time and effort—you
know, almost a decade, right?—to shift
the behaviors and the mindsets of an
entire industry to look at this patent prob-
lem differently and to act differently than
before. And so now that it’s working, now
that we have the data, we have this plat-
form that never existed before, we have
the ability to do things more efficiently.
So in many ways we’ve only just begun.
AS ADOPTION OF FINANCIAL TECHNOLOGY
takes off, so do related patent filings.
An analysis from London law firm
EMW shows a drastic spike in global
patent filings related to financial technology in 2016 compared to 2015. Last
year, the number of fintech filings totaled
9,545—500 more applications than the
The number of fintech patent filings
was up by 49 percent from five years earlier in 2011, when there were 6,399 filings,
according to EMW’s research sourced
from the World Intellectual Property
“The surge in patents reflects both
the proliferation of startups bringing new
technology and products to market over
the last few years, as well as investment by
more traditional financial services firms
in an effort to remain relevant and retain
market share,” Felix Dodd, senior solicitor for EMW, said in a blog post discussing the firm’s findings.
One area for financial technology
patents, EMW found, is artificial intelli-
gence, specifically ideas that enable users
to highlight risks in real time by pick-
ing up suspicious or abnormal activities
through predictive models. EMW’s other
examples of financial technology applica-
tions were for tools providing services for
cryptocurrency or other digital currency,
including bitcoin trading platforms and
bitcoin storage services, as well as new
methods for managing e-money and digi-
According to U.K. news website City
A.M., the United States filed the most
fintech patents with 4,523 last year. This
was twice as many filings as China, the
country with the second highest number
of patents in this area. Korea had the next
highest number of filings.
In January, IPWatchdog published an
article indicating that Visa Inc. and Mastercard hold the most financial technology patented inventions, Visa with 327
and Mastercard with 308.
“We expect the number of patents to
continue to rise, with levels of innovation
showing no signs of slowing,” EMW’s
Dodd wrote in his post.
FINANCIAL TECHNOLOGY PATENT FILINGS SPIKE