FinTech Strategy: Intellectual Property Strategy

The digital revolution for financial services, like in other industries, is taking place. FinTech has been improving financial processes for decades. The FinTech landscape of the Information Age is constantly changing. New business models, providers, and services are added.
FinTech can open new markets and give you a competitive edge over traditional offerings. This could have broad implications for diverse stakeholders including financial institutions, insurers, hedge funds, institutional buyers, ratings agencies, auditing firms, auditors and accounting firms, regulators as well technology companies, consortiums not-for-profits or start-ups.
Large institutions could be making substantial investments in upgrading or replacing legacy technology with FinTech innovation. This includes payments, blockchain and lending.
Companies can now use technology such as blockchains, distributed ledgers, encryption, and automation to complete tasks that were otherwise impossible or difficult with traditional methods. These technologies are beginning to gain acceptance and capability. It’s important to understand how the evolving jurisprudence, regulatory activities and FinTech innovation apply.
FinTech requires intellectual property
Traditional financial institutions as well as start-ups compete for FinTech products and services. It is important that companies clearly define and protect intellectual property. This is especially true when working with multiple entities. A company could then have control over the use of its IP rights, which may include permissible use under licensing or collaborative arrangements.
Copyright
Copyright automatically extends computer code, visual and audio interface features, audio, videos guides, structure of the application programming interface (API), and other works. Computer code could include information such as source code or pseudo code, as well purpose-built firmware and hardware. Copyright is a valuable intellectual property asset for FinTech companies, especially if the program design delivers computational and usability efficiency.
FinTech companies may be able place digital locks on their copies to add security. The contravention of digital locks may be an offense in certain jurisdictions. However, it could also provide relief for unauthorised parties. FinTech companies must be aware of policies for developers who incorporate third-party code, even if it is accidental, because this could affect ownership of the technology or freedom to operate. An example of this is when employees or contractors include third-party code without authorisation. This could affect ownership.
Brand
Some brands may use a logo, icon, or word mark that are protected as trademarks. These can be used to prevent others from illegally copying or diluting the brand’s goodwill. FinTech companies create their brands through quality customer service and trust in order to build goodwill with their customers and the general population. FinTech companies are able to differentiate their services and products from those of other companies by creating strong brands. A reputable brand is important to customers, as FinTech companies can often be stewards for financial assets and documentation.
Trade secrets
Common law rights known as trade secrets protect secret business information. These include code, backend server processes and code. Trade secrets don’t require registration but companies must take reasonable steps in keeping them secret. Protected information can be protected for an unlimited amount of time, as long as it remains secret and is not commercially valuable. Trade secrets are considered unfair business practices if they are misused (e.g., unauthorised)
Trademark renewal secrets may be passed on by employees who have left the company to obtain unfair competitive advantages. These trade secrets could take different forms, such as customer lists or source code, or technical documentation. Canada’s common law provides protection for trade secrets. The United States has adopted the Uniform Trade Secrets Act (UTSA) to protect trade secrets.
However, trade secret protection can be subject to limitations, especially when it is relied upon as protection for company assets. Trade secrets rights can be difficult or impossible to enforce. Enforcement may prove ineffective against third parties that indirectly receive the invention from an unauthorised discloser. Trade secret protection could prevent integration and collaboration between entities developing FinTech products, and services. Trade secrets are not protected against third-party independent invention.
Design for the industrial sector
For example, industrial designs can protect the physical appearance of items such as transaction machines and electronic cards. Protecting a brand’s distinctiveness, products or services can be valuable.
Patents
Patents are a way to protect your research and development investment and prevent others from using the technology. Patents may be used to gain a competitive advantage or as a negotiation tool. An organisation might cross-license with another organization to protect its core innovation from third party patent assertions. In order to stop grant of patents, patent publications may also be cited against later filed applications.
Patent protection should be considered for core technology innovation in any technology development strategy. Companions and other players might have their patents or pending cases, so companies should be aware of any other publications and litigations. Contrary to trade secrets and patents, granted patents could be enforced against third-parties who make, use, sell or distribute the claimed invention. However, patent protection may prove costly and difficult in comparison to other IP rights.
However, international treaty system are available to delay expenses while still allowing for the possibility to obtain a prior priority date to protect rights over critical innovations. Due to the nature of patent systems, the priority dates for early filing are crucial in order to take advantage of the fast-evolving FinTech market.
Patent eligibility
Patents are generally granted worldwide for useful and new inventions of patentable matter. Computer-implemented inventions come under greater scrutiny. However, not all innovations related to financial technology are patentable. The jurisprudence for determining whether financial technologies are patentable subject matter is changing constantly. Both the courts and the patent offices have struggled to define what patentable subject matter is.
FinTech companies must review all the guidance and jurisprudence when they prepare patent applications to cover their latest innovations. It is possible to increase your chances of success in patent examination by highlighting key technical features like technical advantages or practical implementation details. The FinTech’s effects should be highlighted in the description.
To protect various aspects of FinTech, an IP strategy for FinTech development will cover intellectual property rights. Registering and documenting can help companies clearly identify and protect their intellectual property. Third parties need to reach clear agreements about intellectual property rights.