intellectual property and the mortgage industry: a primer
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MBA's Legal Issues in Mortgage Technology Conference November 30 – December 2, 2005 MBA's Legal Issues in Mortgage Technology Conference November 30 – December 2, 2005
Intellectual Property and the Mortgage Industry: A Primer
Gabe Minton, VP Industry Technology, MBA
Agenda and Take Aways
• Focus on patents• Key trends with patents• An example patent: “Business Process and
Method for Online Financial Products Trading”
• IP and standards-setting (further discussed by Mike Chanin)
Types of Patents
• “System” – An actual tangible object (unless software)
• “Process” – Business process methods
• It is all about the CLAIMS!
Key Changes by Congress, 1982
• The USPTO changes its funding model from tax dollars to application and related fees» The USPTO is incentivised to handle more applications
• A special court is established to handle patent cases: the Court of Appeals for the Federal Circuit (CAFC)» This court went on to broaden and strengthen the rights
of Patent Holders
Key Patent Cases
• Apple v Microsoft (high profile IP)• Wang, Dell, and Rambus (standards and IP)• “Linux v Microsoft” (not a real case, really
open v closed-source)• Industry hot (and protected) topics:
» eNotarization: Arcanus» Numerous eMortgage patents: eOriginal, …» eRecording: inGeo » Imaging» Workflow
Patent Activity in the US
0
50
100
150
200
250
300
350
400
1840 1900 1962 1980 1990 2000
Apps
Awards
(in thousands)
Source: Innovation and its Discontents, Jaffe & Lerner
Number of Patent Suits Initiated
0
500
1000
1500
2000
2500
30001946
1950
1956
1961
1963
1976
1981
1986
1991
1992
1996
2000
2001
Suits
Source: Innovation and its Discontents, Jaffe & Lerner
Key trends
• Patent Applications UP!» Larger companies building extensive portfolios» “Portfolio companies”» Small companies/independents are filing less
• Number of patent awards UP!• Number of court cases won by patent holders UP!
» Companies would rather skirt or pay out» Small companies cannot afford adequate protection
USPTO.GOV
Example Patent
Abstract
• An online centralized financial products exchange system. The invention is a system, method and computer program product that creates a "marketplace" for end-to-end financial products life cycle transactions. More particularly, the invention provides a centralized exchange system for the trading of loans. The system includes a plurality of Web servers for receiving and providing loan information from and to subscribers on several Web clients and a database server for searching the pre-set rules to match potential buyers with sellers. The system also includes a database for storing information relating to negotiations (i.e., bidding) for the sale of loans and for storing pre-set rules for pre-registered buyers and sellers. The system further includes a database and server for storing risk/return information that is made available to subscribers for analysis.
Excerpt Claim:
1. A centralized system for trading financial products in the secondary market, wherein the system is capable of being accessed by a plurality of subscriber, the system comprising: means for receiving loan information for a plurality of loans in a loan pool from a first subscriber; means for storing said loan information in a database; means for receiving selection inputs from a second subscriber for said loans in said loan pool, wherein said selection inputs indicate which of the loans in said loan pool said second subscriber wishes to purchase, whereby said system allows trading of loans in the secondary market and means for allowing said first subscriber to accept said selection inputs entered by said second subscriber, wherein a trade is processed when said selection inputs are accepted
THERE ARE 35 MORE CLAIMS IN THIS PATENT!
IP and Standards Organizations
• How do you create a policy that protects people’s IP, while allowing them to contribute it to the “common good”» Methods researched:
• Public Domain• GNU/CopyLeft• Royalty Free Licencing• RAND Approach
• Key case: Wang, Dell, and Rambus
Q&A
• Gabe Minton, VP, Industry Technology, MBA» gminton@mortgagebankers.org» 202.557.2821
• http://www.mismo.org• http://www.sisac.org• http://www.mortgagebankers.org• http://www.uspto.gov
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