Answer ... Protection of innovation in the fintech space is relatively difficult. Generally, innovative ideas can be protected by IP rights such as patents, design rights, trade secrets and copyright.
Software source code and the graphic interfaces of apps are generally protected by copyright by operation of law. Copyright need not be registered, although it is recommended to register an early-stage fintech innovation with the i-DEPOT of the Benelux IP Bureau (www.boip.int/en/entrepreneurs/ideas) in order to be able to evidence the ownership thereof. Design rights and trademarks can protect the name or logo of a fintech innovation, such as an app.
A more secure way to protect fintech innovations is to obtain a patent which protects the technical product or process. The functioning of an algorithm, for example, is not protected by copyright, but may be eligible for a patent under certain circumstances. A Dutch patent can be requested from Octrooicentrum Nederland, subject to compliance with the requirements laid down in the Dutch Patent Law.
It is also possible to obtain a European patent via the European Patent Office (EPO), if the innovation is novel, inventive and susceptible of industrial application. If the EPO approves the request, the applicant must register the patent in the European country in which it wishes to protect the innovative ideas.
It is expected that in the relatively near future, applicants will be able to opt for a unitary patent – a unilateral instrument that will be valid in almost all EU member states.
Answer ... The Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB) jointly launched two initiatives in 2016 and 2017 with the aim of both facilitating fintech companies and gaining knowledge of and experience with their innovative business models: the Innovation Hub and the Regulatory Sandbox.
The Innovation Hub is intended to facilitate fintech start-ups by qualifying their proposed business model and assessing the applicability of financial regulatory laws to that business model. The Regulatory Sandbox goes a step further, allowing fintech companies (at least theoretically) to opt for more proportionate regulatory treatment and apply for a customised licence or partial licence. However, given that European legislation rather than national legislation generally determines which regulatory framework applies to fintech companies, and due to the limited discretionary powers granted to the Dutch regulators by the Dutch Ministry of Finance and the Dutch legislature (in contrast to the relatively broad mandate of the Financial Conduct Authority in the United Kingdom, for example), the Dutch regulators may experience difficulties in offering fintech companies different treatment from other financial undertakings.
In a recent evaluation report, the regulators concluded that “both initiatives are playing an important role in responding to innovation in the financial sector”. They also acknowledge that maintaining an open dialogue with fintech companies is essential to promote continued innovation. To this end, DNB has launched iForum, through which it aims to share best practices in the fintech sector.