Monday, 30 November 2015

USPTO's patent assignment dataset: research-ready data now available

No stones are being unturned in the continuing quest for more and better patent data. A case in point is a recent research paper by three US writers. "Patent Transactions in the Marketplace: Lessons from the USPTO Patent Assignment Dataset", by Stuart J.H. Graham, Alan C. Marco and Amanda F. Myers -- all of the United States Patent and Trademark Office -- was posted on SSRN at the beginning of this month.  Its abstract is revealing:
While records of the assignments (transactions) affecting US patents and patent applications have been maintained by the US Patent & Trademark Office (USPTO) for over 40 years, few researchers have used them. To help remedy this deficiency, the USPTO Office of Chief Economist is releasing research-ready data files. This paper describes the contents of the USPTO Patent Assignment Dataset, a database covering roughly 6 million assignments and other transactions recorded during 1970-2014 and affecting about 10 million US patents or patent applications published 1930-2014. 
Records include information on transferred patent and application numbers, the dates a transaction was executed by the parties and subsequently recorded at the USPTO, the assignor(s) and assignee(s), and the “nature of conveyance” (for instance, whether the transaction was an assignment, merger, security agreement, or license). 
This paper provides a comprehensive description and presents stylized facts to facilitate better understanding and motivate future research. Although the paper describes limitations inherent in the data, their release nevertheless offers researchers many novel avenues for conducting original research, particularly those related to the study of innovation, the markets for technology, and the financial collateralization of intellectual property and intangible assets.
There are two quick points to note here.  First, while some of the data is clearly going to be historical or related to technologies that are no longer current, there is a dearth of transaction-related data when compared to application and grant data, which are far easier to obtain, collate and cross-refer.  This initiative of the USPTO is therefore greatly welcomed.

Secondly, this data embraces "the dates a transaction was executed by the parties and subsequently recorded at the USPTO, the assignor(s) and assignee(s)".  Regular readers of this weblog need hardly be reminded of the inaccuracy of recording of patent ownership records, the reason why the ORoPO open register of patent ownership was launched last year with the support of IBM, Microsoft and several other notable patent-owning corporations [coincidentally we posted an item on ORoPO a week and a half ago here].

You can download this 56 page paper here (it's not as long as it seems: more than half of it consists of tables and figures) or view it on your browser here. It's the 29th in the series of Georgia Tech Scheller College of Business Research Papers.

Wednesday, 25 November 2015

Nasdaq: shifting tides of value and the IP tidal wave

The IP Analytics contribution to this week's IAM Weekly Industry Reports, researched and written by Aistemos, addresses the vagaries of the Nasdaq stock market, home to some of the world's best-known and most highly-capitalised businesses. How does the Nasdaq valuation of stock reflect companies' intangible assets -- and in particular their IP portfolios? 

You can read this analysis below or enjoy it on IAM here.


*******************************************

Founded in 1971, Nasdaq has been a symbol of the ever-changing environment of high-tech and new-tech investment that has characterised its 40-plus years of operation. However, as the Financial Times recently described the institution as “down but not out”, the time seems propitious to take a look at the largest Nasdaq constituents from the perspective of their IP holdings. A telling comparison addresses the ever-growing part of intangibles as part of corporate value, currently estimated at 84% of the S&P 500: is there really a correlation between growing IP holdings and corporate value? And if we agree that patents are a proxy for innovation output, can we see indications of the increase in innovation output being understood by the financial markets and reflected in the value of companies?


Stock price volatility has been a Nasdaq leitmotif and the largest constituents of the index have changed considerably over only the past 15 years. Against a background of economic peaks and troughs culminating in the 2008 sub-prime crash, not to mention millennium bug panic, the dotcom bubble and the events of September 11 2001, even the most stable listed corporations could be expected to reflect stock price fluctuation. Given the market-changing nature of the high-value intellectual property held by some Nasdaq-listed firms and the impact of real and imagined disruptive technologies, the fluctuation factor is endemic. 
What does the Nasdaq data tell us? First, only four companies (highlighted in the table below) appear in the top 15 in both 2000 and 2015. If market capitalisation is taken to be the measure by which listed companies are assessed, some of the world’s leading innovators with proven track records appear to be worth considerably less now than in 2000. Only Qualcomm has kept a fairly steady market capitalisation.
Source: Cipher, Thomson Reuters, Wall Street Journal, Google Finance
Admittedly, 2000 was a boom year in terms of company valuations, especially in the high-tech sector. But when looking at the development of patents over the same period, the development has been dramatic, often five or even tenfold. The table below highlights the dramatic change in market cap and patent portfolio for the four companies seen in both lists.
Sources: Cipher, Thomson Reuters, Wall Street Journal, Google Finance
Focusing on the growth of patent portfolios, the picture is equally impressive. The graph below plots the eight companies of the existing top 15 with the largest patent portfolios, and shows that the growth over the past 15 years is impressive. Not all growth is organic, of course (Google buying Motorola is probably the most well-known transaction), but that is common for growing companies (and subsequent market cap) in general.
Source: Cipher, Thomson Reuters
Aside from their technology, Apple, Microsoft, Google, Facebook, Amazon and most other Nasdaq trailblazers also hold highly rated brand assets, listed in the Forbes Most Valuable Brands for 2015. Thus Apple, with a market capitalisation of $663.1 billion, owns the rights to the Apple brand which is valued at $145.3 billion and Microsoft, valued at $351.8 billion, places a value of $69.3 billion on the Microsoft brand. Many of the brands in question were already fairly well established in their respective markets in 2000 (as was the case for most Nasdaq leaders in 2015), so it can only be assumed that brand value was already taken into account to some extent in stock prices for that year and is now considered with the brand value numbers mentioned above.
Might it then be the case that patents matter less? Surely not. People in the IP industry can show the many ways in which patents are increasingly important to companies and how they can be used to generate financial returns. The chart mapping US patent litigation below, looking at the total number of ongoing lawsuits over time for the existing Nasdaq top 15, shows that it has increased from 29 in 2000 to a peak of 800 active suits in 2013.
Source: Cipher
The Samsung v Apple suit is well known and a PWC report tracked the largest damages awards in recent years. Apple and Microsoft are involved in three of the 10 largest awards, for a total of nearly $2.7 billion in damages.
On the basis of the accepted wisdom that intangibles represent a large part of corporate value and that brands are recognised and valued by the financial community, one may wonder how patents are treated by the financial community. The importance of patents to corporates is evidenced by ten to twentyfold increases in patent portfolios, hundreds of ongoing patent suits and billion dollar settlements.
The market cap for our four champion companies found in both top 15 lists clearly decreased at the same time as patent portfolios, patent lawsuits and settlements surged. This invites the question of whether the financial community understands patents. Admittedly, there is more to intangibles than patents alone, but it seems counter-intuitive that even as experts agree about the increasing importance of intangibles, a substantial and registered (ie, publicly available) intangible asset class does not seem to correlate to market cap performance. In this digital day and age and with the advent of big data and analytics, this industry is as well positioned as it has ever been to help the financial community better understand patents and intangibles.

Friday, 20 November 2015

Accurate patent ownership: a word about ORoPO

Earlier this year, amid the bright lights of the IPBC event in San Francisco, ORoPO (the Open Register of Patent Ownership) was launched.  To remind recent readers of this weblog what OPoPO is and what it stands for, we quote the register's website verbatim:
ORoPO is voluntary, open and non-profit.
  • Voluntary – participation in ORoPO is voluntary and free. ORoPO works alongside many of the world’s leading patent offices to complement their work around improvements in openness, transparency and data quality.
  • Open – all data uploaded into ORoPO is free of intellectual property restrictions and is made available to the public as open data.
  • Non-profit – ORoPO is a non-profit corporation. It is managed by a board of directors with the support of an Advisory Board.
The ORoPO database includes verified details of patents owned by organizations. 
Our mission is to improve transparency and openness around patent ownership data. This is an essential and necessary step towards the evolution of patents as a functional asset class.
Since the June 2015 launch, OPoPO has been mentioned on Aistemos blogposts here, here, herehere, here, here, here and here.

ORoPO has also been mentioned on the IP Finance weblog here, here and here.  Further write-ups can be found on the IAM Blog, ZDNetAdams IP and, impressively, on the Fraunhofer Big Data Center website.

2016 will see a renewal of activity regarding ORoPO as its advantages become more widely appreciated and more companies join the eleven which have already lent their support and their data to this important project.  Meanwhile, the ORoPO Twitter account is being kick-started and will provide a channel for communicating news of ORoPO as it happens. The ORoPO LinkedIn Group is also being activated. Do feel welcome to participate!

Wednesday, 18 November 2015

Herding catfish? Time to cast a wider net over the aquaculture market

"Herding catfish? Time to cast a wider net over the aquaculture market" is the title of the most recent Aistemos IP analytics contribution to IAM's Weekly Industry Reports. Following earlier IAM features on prosthetics and the beer industry, this article casts a sharp analytical eye over one of the world's less well-known sectors, in which the size of the market and the sheer number of patent rights governing it are not apparent to the casual observer.  The piece reads like this:

As the global population continues to rise and traditional food sources come under threat from climate change, natural disasters and genetic depletion, the need to develop and secure alternative food sources has never been greater.  
Aquaculture – the farming of fish and other aquatic species – is becoming increasingly important in providing an alternative source of food. The sector provides not only human food, but also animal food and soil fertiliser. Today, aquaculture now accounts for nearly 50% of the world's fish eaten as food and, according to the Food and Agriculture Organisation of the United Nations, is the fastest-growing sector of the world food economy. It is therefore unsurprising that considerable time, ingenuity and investment have been devoted to this sector. 
Technology has been crucial in yielding not just fish and other aquatic species, but also IP rights. An analysis of the sector since 2000 shows a marked increase in overall portfolio growth, in both the number of granted applications and pending applications. 
Two main technology areas dominate. The largest – which accounts for around 90% of the sector – relates to aquaculture equipment such as fish pens, tanks, filtering systems and feeding apparatus. The remaining 10% are biological advances relating to disease eradication, genetics and breeding techniques.

Where do these patents originate? They might be expected to originate from leading commercial operators in the patent-conscious United States and Europe, which are also high-consumption economic powerhouses and among the largest importers of aquatic food. However, this is not the case. The table below shows that almost all patent applications in the field now emanate from China, with South Korea, the United States and Norway trailing by so great a distance as to be almost negligible. Further, a study of the patent holdings of the Global Aquaculture Alliance – which promotes responsible aquafarming and represents the interests of leading trading companies, aquaculture research institutes and local trade bodies – shows that, out of its 181-strong membership, less than one-fifth hold patent families relating to aquaculture, with on average only two pending or granted families each.
The history of aquaculture may provide some explanation of China’s dominance in aquaculture patenting. Aquaculture has a long history in China, dating back 4,000 years to the farming of the common carp, shortly followed by the introduction of carp polyculture. China’s interest in aquaculture has continued to the present day and now involves a much wider range of fish and other aquatic organisms, such as oysters and edible seaweed.
Unlike in many other industries, patenting is concentrated where production takes place, as opposed to where consumption takes place – with China accounting for 70% of global production and much of global exports.
China’s commitment to the development of aquafarming is focused principally on just four institutions:
  • Zhejiang University – 968 pending and active aquaculture patent families;
  • Chinese Academy of Fishery Sciences – 704 pending and active aquaculture patent families;
  • Dalian University – 476 pending and active aquaculture patent families; and
  • Ocean University of China – 173 pending and active aquaculture patent families.
Less than 1% of these patent families were filed outside China. At first glance, this would appear to suggest a lack of interest in protection outside the home jurisdiction and a preoccupation with a growing domestic market, rather than the development of global or international portfolios which would support licensing and other commercial activities abroad. 
However, there may be other explanations for the discrepancy, if not its magnitude. Some innovations may relate to breeding techniques that would struggle to satisfy patentability criteria outside China; others may relate to eradication techniques for diseases not found in other geographical regions; still others may not be worth patenting in jurisdictions where local health and hygiene regulations would prevent their use (eg, where they involve the administration of steroids or products with toxicological indications).
What about outside of China? Korea, with its abundant fisheries, has historically always been a consumer of aquatic products. Korea has turned to aquaculture in recent years to meet growing demand for seafood and is one of the larger patent-owning nations in this sector. As seen in China, filings predominantly stem from public-sector research organisations and universities. The United States similarly has a growing domestic market for aquatic products and investment in aquaculture is on the increase. Norway, in fourth position, is one of the world's largest producers of farmed salmon. The United States and Norway have filings from research institutes and universities as well as commercial operators.
What conclusions can be drawn from this exercise? It is hard to get a good sense of the presence of truly dominant players outside China, the entry of disruptive technologies or the development of global or international marketing strategies. This may make the sector ripe for consolidation and for casting the investment and innovation net more widely, especially as it moves towards greater sustainability and an improved environmental footprint. Lastly, with its long history in the development of aquaculture, China has the opportunity to be an international leader in this sector, should it choose to look outwards.
This piece was posted last week by IAM here.

Monday, 16 November 2015

Disruptive technology: substance or slogan?

The terms "disruptive technology" and "disruptive innovation" are increasingly heard, read and hashtagged in the world of innovation, investment and analytics. They sound impressive and bestow an aura of superior knowledge on those who use them. What exactly do they mean, though? A selection of websites throws up, among others, the following:

Disruptive innovation, as by Clayton Christensen in 1995, is "a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors". 

WhatIs.com explains the concept in terms that exclude progression up the market: "a disruptive technology is one that displaces an established technology and shakes up the industry or a ground-breaking product that creates a completely new industry".

* According to BusinessDictionary.com, "new ways of doing things that disrupt or overturn the traditional business methods and practices. For example, steam engine in the age of sail, and internet in the age of post office mail". Here the definition is kinder to the disrupted technology.  Sailing is still a hugely popular pastime and technology is being developed by Boeing for the commercial exploitation of windpower even in the era of supertankers, while post office mail delivery has refocused from domestic mail to servicing the ever-growing use of Amazon, eBay, Alibaba and other online shopping facilities.

Intelligent HQ offers "a new emerging technology that unexpectedly displaces an established one". 

So what does this mean to the analyst?  At its simplest, "disruptive technology" or "disruptive innovation" is not a predictor of the future but a descriptor of the past, a conclusion drawn from the fact that an innovative technology, having planted itself in one corner of the garden, has grown to the point that it has forced out all the other plants -- the eradication of competitors being the most complete form of disruption.

The notion that an emerging technology can unexpectedly displace an established one is troublesome,  This may have been possible in the nineteenth century and for most of the twentieth, but surely any emerging technology that takes the world by surprise must be a rare exception now, rather than the rule.  Information supplied by the patent system is so rich and textured that one scarcely needs to read between the lines in order to see which businesses are innovating, and in which fields. Supplement that information with further data concerning industrial investment, consumer spending, market size and the like, plus the self-reported activities of major and even minor players in the market, and the jigsaw puzzle -- if not actually complete -- leaves little to the imagination for anyone looking at the gaps.

This leads us to consider another question: what is the psychological force of the deployment of the words "disruptive technology"?  To the prospective investor, the prospect of funds being invested in such a technology must be attractive, carrying with it the inherent promise that the new technology will scoop the pool and grant mastery of an entire market or at least a major part of it.  To investors in an established technology, the term may convey a warning that it is now a time to sell up and move away, or it be an excuse: "sorry: your investment isn't delivering any more, but we've just been hit by a disruptive technology. What could we do? Who could have seen it coming?"

It is also worth considering how much disruption is caused by nothing more technological than a fresh approach to branding. (for example the face of High Streets the world over, and retail human behaviour, was greatly changed by the introduction of business format franchises) or advertising (promoting lifestyle aspirations rather than product quality). 

In short, both disruption and innovation are a permanent part of our commercial and industrial environment and we live constantly with their effects. And while technology is never stagnant, in an era of analytics and the massive availability of data to analyse, its applications and effects should never surprise us or take us unawares.  Most importantly, we should use the words "disruptive technology" and "disruptive innovation" neither as a promise nor as an excuse but with thought and caution, if they are to be words of substance and not mere slogans.

Thursday, 12 November 2015

Aistemos discussions on LinkedIn: recently-added topics

The Aistemos LinkedIn Group. has started a few more discussion topics since we last drew the attention of our readers to it a little over a month ago.  Our recent topics look like this:
* "Quality patents" is not a term of art but a slogan. Almost everyone wants "quality patents", but do we all want or mean the same thing? For a manufacturer, a QP effectively wards off competition; to a licensor, it must generate stable, predictable income; for anyone advancing finance on the security of IP, a QP is an asset that will not vaporise if its validity is challenged and which will retain its commercial value. To an information scientist it's one that accurately and succinctly describes the advance on the art, and so on. Do we need greater consensus as to the meaning of the term?

* Following a recent Aistemos blogpost on Unwired Planet in the wake of its latest quarterly report, a reader's comment speculates as to whether stock analysts need bother looking carefully at a company's IP assets and prospects, if all they need do is assess whether its current stock price is a deviation from the mean. While this may seem a little cynical, recommendations to buy or sell -- unlike share movements immediately following key court decisions on eg patent validity -- don't seem to be linked to IP value. Thoughts, anyone?

* A tweet from @InnovateUK picked up a speech by Confederation of British Industry Director General John Cridland, reported in The Times, pointing out that the UK had the smallest R&D spend of any G8 country. Investment in R&D may come through the public sector or private funding. In the first case this is a matter of policy; in the latter, it's a matter of preference -- and investors have a preference for putting money where it is more likely to get a safe and worthwhile return. Why, then, is R&D investment lower in the UK than in, eg France, Italy, Canada or Russia? Any suggestions?
The Aistemos LinkedIn Group is a serious and responsibly moderated LinkedIn Group which welcomes discussion and debate. Do join and feel welcome to share your thoughts and opinions with us.

Tuesday, 10 November 2015

Unwired Planet: in orbit -- or heading out to space?

Los Altos, CA based Unwired Planet, Inc. has just announced its financial results for the first quarter of fiscal year 2016. The figures are in negative territory: revenue to 30 September was US$1.3 million, while loss from continuing operations totalled US$10.2 million. This deficit sparked an upbeat response from company president and CEO Boris Teksler:
“We have been working tirelessly on a strategy to reinvigorate Unwired Planet with financial stability, while executing on our IP licensing business. With the addition of a new CFO and new board members, we are assembling a team with the financial acumen to develop and execute on the next chapter of Unwired Planet”.
This begs the question: is what is needed a dose of financial acumen or an injection of intellectual property strategy?

Unwired Planet holds a portfolio of some 2,500 patents -- though this number includes both granted and pending US and foreign patents and stretches across 2G, 3G and 4G technologies. This portfolio, which comes mainly from Ericsson, includes patents pointing to technologies that let mobile devices connect to the internet and enable mobile communications.

Wikipedia gives a brief bio of the company, whose roots go back to Libris Inc. in 1996 and which in turn has traded as software.com, phone.com and more recently Openwave -- a name that is associated with the introduction of the Mobile Internet. In its relatively short life the business has done, and been, many things. Of late, with 16 employees and no products, it has been accused of being a patent troll. However, the company resists the charge. According to Bloomberg, citing Unwired Planet general counsel Noah Mesel:
“It’s become a hackneyed term that’s used in a derogatory way.  You can call us anything you like.  We happen to be at the point in our business cycle where what’s left is a patent portfolio".
So what are the company's prospects? Much depends on the outcome of pending patent infringement litigation.  An action against Apple in the Northern District of California appears to have hit the buffers this May, but major actions are pending in Europe: Samsung, Huawei and Google are being pursued by the company's Irish subsidiary in Germany and the United Kingdom, and HTC is being sued in Germany too.  In the UK the litigation has already established the principle that infringement disputes involving FRAND licence terms are not amenable to summary judgment and have to go to full trial.  It may be a long, long time before the outcome of this litigation is known, at least in the UK where earlier this month Samsung was granted leave to appeal to the Court of Appeal for England and Wales against the trial judge's decision to strike out part of its defence.

So what happens next?  Will Unwired Planet be able to subsist with an operating loss eating into its cash mountain (with total assets slipping from US$ 88 million to US$ 80 million between 30 June and 30 September) until such time as licensing income and court-awarded damages help it turn the corner?  Will even a successful litigation outcome be enough to save it?

This question cries out for an exercise in patent analytics in order to tease out the information needed to address it. For example: 

  • in precisely which fields of technology does the company's patent strength lie?
  • how many of those patents are standard-essential and how many compete with those which are already recognised as standard-essential?
  • are FRAND licensing arrangements in place and, if so, have they been judicially upheld?
  • how are those patents spread between jurisdictions that award punitive or large damages and between those where damages are low or purely compensatory?
  • how are those patents distributed across those fields?
  • how old is the portfolio in comparison to the patent holdings of competitors and what are the prospects for augmenting it through organic growth or purchase?

With the relevant information, the decision whether to fight on or change tack becomes easier to make.

Thursday, 5 November 2015

"Law on the Market", the impact of court rulings and the risk of irrational response

"Law on the Market? Evaluating the Securities Market Impact of Supreme Court Decisions" is a 28-page article by three American scholars -- Daniel Martin Katz (Illinois Tech, Chicago Kent College of Law), Tyler Soellinger and James Ming Chen (both of the Michigan State University College of Law), together with infrastructure and business strategy specialist Michael James Bommarito II (Bommarito Consulting, LLC).

The abstract of this article, which is available in full on SSRN (browse here, download here), sets out the authors' thesis (the emphases are ours):
Do judicial decisions affect the securities markets in discernible and perhaps predictable ways? In other words, is there “law on the market” (LOTM)? This is a question that has been raised by commentators, but answered by very few in a systematic and financially rigorous manner. Using intraday data and a multiday event window, this large scale event study seeks to determine the existence, frequency and magnitude of equity market impacts flowing from Supreme Court decisions.

We demonstrate that, while certainly not present in every case, "law on the market" events are fairly common. Across all cases decided by the Supreme Court of the United States between the 1999-2013 terms, we identify 79 cases where the share price of one or more publicly traded company moved in direct response to a Supreme Court decision. In the aggregate, over fifteen years, Supreme Court decisions were responsible for more than 140 billion dollars in absolute changes in wealth. Our analysis not only contributes to our understanding of the political economy of judicial decision making, but also links to the broader set of research exploring the performance in financial markets using event study methods.

We conclude by exploring the informational efficiency of law as a market by highlighting the speed at which information from Supreme Court decisions is assimilated by the market. Relatively speaking, LOTM events have historically exhibited slow rates of information incorporation for affected securities. This implies a market ripe for arbitrage where an event-based trading strategy could be successful.
The abstract makes no mention of intellectual property -- but don't let that put you off.  The very first case the authors address is Association for Molecular Pathology v Myriad Genetics Inc., 133 S. Ct. 2107 (2013), about which the authors write:
The Court's ultimate decision was seen as a compromise that held that DNA sequences fall outside the definition of patentable subject matter under 35 U.S.C. s.101, but cDNA (complementary DNA) sequences, which do not occur in nature absent human intervention, may indeed be patented. Ultimately, the Court's decision was significant not only for its contribution to overall patent law doctrine but also to the value of Myriad as a company.

As displayed in Figure 1 [not reproduced here], the Court's compromise decision initially confused the equity market. Fueled in part by media reports, would-be arbitrageurs interpreted the Court's decision as positive to Myriad in the initial hours of trading. However, this view was ultimately displaced as more careful reading and subsequent understanding revealed that the decision was highly unfavorable to Myriad's business interests. As a result, the stock began to trade down in the second half of the session. Media coverage following the initial trading day called it a "wild ride" and a "market whipsaw."

As the dust settled, the Court's decision was indeed detrimental to Myriad's long-term financial value. Even after controlling for overall market trends, Myriad's stock lost in excess of 20% of value over the two-day trading window. Attendant to this change in price, there was also a significant increase in volume as traders sought to shift their positions in light the Court's decision. Specifically, on the date of decision, there was roughly a thirteen-fold increase in trading volume of the stock. The day thereafter witnessed an eighteen-fold increase in trading volume.
While this article demonstrates the vulnerability of stock values, and therefore of investments, to judicial rulings, readers of this weblog will bear in mind that there are other factors at play. These include the speed at which information concerning a court decision travels and, more importantly, how that information is interpreted or misunderstood.  A classical example of this, relating not to a court case but to the mere fact that a patent has been granted, was the effect on GoPro's share price of the announcement earlier this year that a patent had been granted to Apple -- this being just one of a very large number of patents for wearable camera technology and certainly not a market killer [for  more on this episode, click here]. The bottom line is that, in the absence of relevant and current IP analytics, the undeniable impact of court decisions on patent owners' share value can be an irrational one.

Tuesday, 3 November 2015

FinTech patents: where finance meets technology

Prepared with
Relecura
There is substantial interest in the financial technology ('FinTech') sector, at a time when the financial services sector is generally experiencing considerable churn. Several start-ups and newer companies are challenging the incumbents, using digital platforms to deliver products and services more efficiently and employing better business models.  

The chart below shows an overview of the top FinTech patent holders, along with their filing trends.
FinTech patents: top holders
Source: Relecura
Given that FinTech lies at the intersection of finance and technology, these are the logical axes along which to segment the patents. Some commonly accepted FinTech categories are based on the financial product or service addressed. Six of these financial categories are payments, banking, wealth management, capital markets, insurance and lending, and FinTech patents can be analysed using these categories.
An alternative partitioning of FinTech patents based on the technologies covered is also useful, since it gives a different axis to view the FinTech patent superset. Some major technology categories that enable FinTech are data and analytics, the Internet of Things, mobile platforms, security, cloud computing and cryptocurrency.
A matrix map of the patents along the two axes can easily locate key patent holders along each axis, as well on the intersection nodes.
FinTech patents: intersection of financial and technology categories
The numbers at each node indicate the intersection counts along with the key patent holders.
Partitioning a large portfolio such as the FinTech patent set using multiple sets of criteria (eg, financial and technology categories) and identifying their interactions can be a time-consuming task without an appropriate analysis tool. However, with features such as collaborative tagging and automapping of bucketing criteria available in the present generation of IP analysis tools, large patent sets may be quickly and accurately partitioned and analysed much more quickly.
Assignee topic map showing patent holdings of each financial category
Bubble proximity indicates similarity of patent portfolios, while the size indicates size of holdings.
The top 10 is very different across the various lines of business.

FinTech patents: top 10 (financial categories, ranked by number of equivalents held)
[if this table cannot be read clearly on your device, you can read it by clicking here]

Rank
Payment
Banking
Wealth management
Capital market
Insurance
Lending
1
VISA
OKI
CHICAGO MERCANTILE EXCHANGE
CHICAGO MERCANTILE EXCHANGE
THE HARTFORD
SHINHAN BANK
2
HITACHI
HITACHI
SHINHAN BANK
HITACHI
USAA
BIZMODELINE
3
MASTERCARD
SHINHAN BANK
JPMORGAN CHASE
DAIWA SECURITIES GROUP INC
HITACHI
BANK OF AMERICA
4
EBAY
BANK OF AMERICA
GOLDMAN SACHS
GOLDMAN SACHS
ACCENTURE
JPMORGAN CHASE
5
OKI
BIZMODELINE CO LTD
BANK OF AMERICA
JPMORGAN CHASE
SWISS RE
FANNIE MAE
6
BANK OF AMERICA
FUJITSU
HITACHI
TRADING TECH INT INC
GOLDMAN SACHS
WOORIBANK
7
SONY
VISA
MORGAN STANLEY
FUJITSU
IBM
HITACHI
8
BIZMODELINE CO LTD
JPMORGAN CHASE
DAIWA SECURITIES GROUP INC
MUFG
TOKIO MARINE
MUFG
9
FIRST DATA
MUFG
ACCENTURE
CFPH LLC
STATE FARM
CAPITAL ONE
10
DIEBOLD
NEC
BIZMODELINE
ITG SOFTWARE SOLUTIONS INC
BANK OF AMERICA/ THE TRAVELERS COMPANIES
GE


Relecura's IP intelligence report, "FinTech - An IP perspective", points to the quality of these patents. It also identifies the top companies citing patents, filing trends and heavily cited key patents.
FinTech patents: top holders – Relecura star rating and counts
Key findings
The key findings of the study are as follows:
  • Visa, Bank of America and Hitachi, followed by Shinhan Bank and Bizmodeline, are the top FinTech patent holders.
  • FinTech patents are distributed among a wide range of patent holders. The top 200 patent holders constitute only 39% of the total.
  • The patent holders are from a range sectors, including pure-play FinTech or financial institutions, banks, telecoms companies, software companies, IP commercialisation entities and e-commerce firms.
Fintech is an active sector in terms of both patent filings and patent transactions.
Murari Venkataraman of Relecura assisted in the preparation of this piece, which was posted last week as an IAM Industry Report, here.