Where Does State Street Lead?: A First Look at Finance Patents, 1971-2000

Abstract

This paper empirically examines patents for financial formulas and methods, whose patentability was recently confirmed in the litigation between State Street Bank and Trust and Signature Financial Group. Awards by the U.S. Patent and Trademark Office have been accelerating in recent years, with a total of 445 financial patents awarded through February 2000. While the two largest recipients of these patents are major financial institutions, other awardees are very heterogeneous, including many computer hardware manufacturers and individual inventors. The role of universities in financial patenting has been modest, and the role of academic finance in delineating patent awards minimal. The final sections of the paper discuss the challenges that these developments pose to finance researchers and universities more generally.