Edited by Luisa Anderloni, David T. Llewellyn and Reinhard H. Schmidt
Chapter 7: Intellectual Property Rights and Standard Setting in Financial Services: The Case of the Single European Payments Area
7. Intellectual property rights and standard setting in ﬁnancial services: the case of the Single European Payments Area* Robert M. Hunt, Samuli Simojoki and Tuomas Takalo† 1 INTRODUCTION Intellectual property is widely regarded as the main policy tool of modern societies for moulding private incentives to innovate and to diﬀuse innovations.1 Alan Greenspan has frequently (for example, April 3, 2003, and February 27, 2004) pondered the question: ‘If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights?’. This is a diﬃcult question for economists to answer in general. It is especially diﬃcult to address this question in the context of ﬁnancial services, including payment systems.2 One special feature of ﬁnancial services is that, until recently, patents have only rarely been used to protect ﬁnancial innovations as such (Tufano 2003; Frame and White 2004). In most other industries patents are common, providing their owners with strong and relatively broad protection of their technological innovations. But in the United States, at least, ﬁnancial patents became commonplace after the landmark 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group.3 This decision made it clear that computer-implemented methods of doing business, including those involving ﬁnance, were indeed patentable subject matter (Hunt 2001; Lerner 2002). The use of formal intellectual property rights to protect ﬁnancial innovations is more limited in Europe than in the US. But most contemporary ﬁnancial services rely on information technology. Unlike business methods...
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