Business method patents and U.S. financial services

Abstract

A decade after the State Street decision, more than 1,000 business method patents are granted each year. Yet only one in ten are obtained by a financial institution. Most business method patents are also software patents. ; Have these patents increased innovation in financial services? To address this question the author constructs new indicators of R&D intensity based on the occupational composition of financial industries. The financial sector appears more research intensive than official statistics would suggest but less than the private economy taken as a whole. There is considerable variation across industries but little apparent trend. There does not appear to be an obvious effect from business method patents on the sector’s research intensity. ; This working paper supersedes Working Paper No. 07-21 and Payment Cards Center Discussion Paper No. 07-10 ; Also issued as Payment Cards Center Discussion Paper No. 08-05Patents ; Financial services industry