For the third year in a row, Foley was the leading sponsor of the annual conference on Patenting Business Methods in the Financial Services Industry, which was held July 25-27 in New York City.
The conference this year explored what leading companies in the financial services industry are doing to build their defensive patent portfolios, protect their business method processes, gain freedom to operate and, ultimately, develop a competitive edge. It also explored the steps a few innovative companies have taken to monetize and leverage their IP assets. The conference featured speakers from insurance companies, including Swiss Re and Nationwide Mutual Insurance Company, as well as speakers from other financial services companies such as American Express, Citigroup Global Investment Bank, Goldman Sachs & Co., Fannie Mae and Lehman Brothers.
Insurance Companies have been increasingly active in building their intellectual property portfolios. Currently, there are about 270 issued patents which the U.S. Patent Office classifies as insurance patents. This number is up dramatically from ten years ago, when there were fewer than 50 such patents. All signs are that this trend is likely to continue. There are currently about 735 published patent applications relating to insurance, and an unknown additional number of unpublished patent applications. Because publication is optional, the total number of pending patent applications related to insurance is unknown. It is estimated, however, that the number of pending insurance-related patent applications is between 3,000 and 5,000. It can take several years or more for a patent application to wend its way through the process at the Patent Office and issue as a patent.
As the number of insurance patents grows, so too does the amount of patent litigation over insurance patents. Earlier this month, Transamerica Life Insurance Company and Lincoln National Life Insurance Company became embroiled in patent litigation over U.S. Pat. No. 7,089,201. The patent, which issued to Lincoln National on August 8, relates to a method of administering an annuity product.
Insurance companies also need to be careful to avoid overstepping other types of intellectual property. In 2002, Hartford Insurance settled a trade secret claim with Bancorp Services for $118 million.
Foley’s intellectual property department has been a long-term player in advising companies on business method patents and other intellectual property issues that are of major concern to insurance companies. Foley drafted the brief for the software industry in the seminal State Street Bank case in 1998. The judicial stamp of approval given to business method patents in State Street Bank is widely seen as triggering the current flood of business method patent filings by insurance companies and others.
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