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Business And Financial Method Patents, Innovation, And Policy

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  • Bronwyn H. Hall

Abstract

Court decisions in the 1990s are widely viewed as having opened the door to a flood of business method and financial patents at the US Patent and Trademark Office, and to have also impacted other patent offices around the world. A number of scholars, both legal and economic, have critiqued both the quality of these patents and the decisions themselves. This paper reviews the history of business method and financial patents briefly and then explores what economists know about the relationship between the patent system and innovation, in order to draw some tentative conclusions about their likely impact. It concludes by finding some consensus in the literature about the problems associated with this particular expansion of patentable subject matter, highlighting the remaining areas of disagreement, and reviewing the various policy recommendations.

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  • Bronwyn H. Hall, 2009. "Business And Financial Method Patents, Innovation, And Policy," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(4), pages 443-473, September.
    • Handle: RePEc:bla:scotjp:v:56:y:2009:i:4:p:443-473
    DOI: 10.1111/j.1467-9485.2009.00493.x
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    Cited by:

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    3. Mari Komulainen & Tuomas Takalo, 2013. "Does State Street Lead to Europe? The Case of Financial Exchange Innovations," European Financial Management, European Financial Management Association, vol. 19(3), pages 521-557, June.
    4. Caillaud, Bernard & Duchêne, Anne, 2011. "Patent office in innovation policy: Nobody's perfect," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 242-252, March.
    5. Landoni, Matteo, 2020. "Knowledge creation in state-owned enterprises," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 77-85.
    6. Guido Cozzi & Silvia Galli, 2009. "Upstream Innovation Protection: Common Law Evolution and the Dynamics of Wage Inequality," Working Papers 2009_20, Business School - Economics, University of Glasgow.
    7. Al Mamun, Md & Sohag, Kazi & Shahbaz, Muhammad & Hammoudeh, Shawkat, 2018. "Financial markets, innovations and cleaner energy production in OECD countries," Energy Economics, Elsevier, vol. 72(C), pages 236-254.
    8. Guido Cozzi & Silvia Galli, 2014. "Sequential R&D and blocking patents in the dynamics of growth," Journal of Economic Growth, Springer, vol. 19(2), pages 183-219, June.
    9. Eric Tymigne, 2011. "Financial stability, regulatory buffers and economic growth after the Great Recession: some regulatory implications," Chapters, in: Charles J. Whalen (ed.), Financial Instability and Economic Security after the Great Recession, chapter 6, pages 114-140, Edward Elgar Publishing.
    10. Benjamin Farrand, 2017. "Bold and newly Independent, or Isolated and Cast Adrift? The Implications of Brexit for Intellectual Property Law and Policy," Journal of Common Market Studies, Wiley Blackwell, vol. 55(6), pages 1306-1321, November.
    11. Jiaming Jiang & Rajeev K. Goel & Xingyuan Zhang, 2019. "Knowledge flows from business method software patents: influence of firms’ global social networks," The Journal of Technology Transfer, Springer, vol. 44(4), pages 1070-1096, August.
    12. Won Sang Lee & So Young Sohn, 2017. "Identifying Emerging Trends of Financial Business Method Patents," Sustainability, MDPI, vol. 9(9), pages 1-21, September.
    13. El Ghoul, Sadok & Gong, Zhaoran (Jason) & Guedhami, Omrane & Hou, Fangfang & Tong, Wilson H.S., 2023. "Social trust and firm innovation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 84(C).
    14. Desyllas, Panos & Sako, Mari, 2013. "Profiting from business model innovation: Evidence from Pay-As-You-Drive auto insurance," Research Policy, Elsevier, vol. 42(1), pages 101-116.
    15. Unsal, Omer, 2023. "Corporate crimes and innovation: Evidence from US financial firms," Economic Modelling, Elsevier, vol. 120(C).
    16. Wen Chen & Robert Inklaar, 2016. "Productivity spillovers of organization capital," Journal of Productivity Analysis, Springer, vol. 45(3), pages 229-245, June.
    17. Sunghun Chung & Animesh Animesh & Kunsoo Han & Alain Pinsonneault, 2019. "Software Patents and Firm Value: A Real Options Perspective on the Role of Innovation Orientation and Environmental Uncertainty," Information Systems Research, INFORMS, vol. 30(3), pages 1073-1097, September.
    18. Hu, Yefei & Liu, Dayong, 2022. "Government as a non-financial participant in innovation: How standardization led by government promotes regional innovation performance in China," Technovation, Elsevier, vol. 114(C).
    19. Peng Huang & Marco Ceccagnoli & Chris Forman & D. J. Wu, 2013. "Appropriability Mechanisms and the Platform Partnership Decision: Evidence from Enterprise Software," Management Science, INFORMS, vol. 59(1), pages 102-121, July.
    20. Giebel, Marek & Kraft, Kornelius, 2020. "Bank credit supply and firm innovation behavior in the financial crisis," Journal of Banking & Finance, Elsevier, vol. 121(C).
    21. Fan, Weina & Anser, Muhammad Khalid & Nasir, Muhammad Hamid & Nazar, Raima, 2023. "Uncertainty in firm innovation scheme and impact of green fiscal policy; Economic recovery of Chinese firms in the post-Covid-19 era," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1424-1439.
    22. Goldman, Jim & Peress, Joel, 2023. "Firm R&D and financial analysis: How do they interact?," Journal of Financial Intermediation, Elsevier, vol. 53(C).

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    More about this item

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • K2 - Law and Economics - - Regulation and Business Law
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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