Published January 23, 2024

The UK’s biggest banks have filed just a fraction of the patent applications of their American counterparts over the last 10 years, with the top five UK banks collectively applying for just 290 patents while the top 3 US banks collectively applied for 5,027, says intellectual property law firm Mathys & Squire.

The low number of patent applications filed by UK banks is partly due to the lengthy and complex filing process in the UK but also due to a misplaced notion that software is not patentable in the UK. This has resulted in more frequent and more successful filings in the US.

The US patent application process has slowed down significantly over recent years as the number of applications has increased. Even with much longer wait times, it remains markedly easier to obtain protection for a financial services-related patent in the US than in the UK.

Whilst obtaining patent protection for software-related inventions is possible in the UK, the UK IPO has long been reluctant to grant patents for software that relates to financial products. The strict rules it applies to whether a piece of software is patentable means that relatively few fintech software patents are actually granted in the UK, discouraging the banks from trying in the first place.

Alan MacDougall, Partner at Mathys & Squire, says that it is essential that banks protect their research and development (R&D) investment as much as possible by patenting their technology where they can. In a competitive marketplace, unique technology can set financial services businesses apart from their rivals and help to win and retain customers.

Patent-protected technology can also serve as a significant source of income in itself, as the owners of the technology can then license it to other businesses and can be used as a bargaining tool in the event that they find that their products infringe the rights of others.

While it’s common to see tech companies secure IP with patents, financial services companies frequently do not take the same approach. Alan MacDougall says, “Banks are amongst the biggest investors in tech development in the UK but they are still not being as vigilant as they should be about protecting the intellectual property that their funding helps to generate.”

“We’d never expect a tech company to release a new product without trying to patent it first. Financial services institutions should be thinking about their IP in the same way. They should be trying to protect their IP with patents. Leaving that valuable IP open to being copied reduces the return on the investment from the R&D that the banks are undertaking.”

Mathys & Squire

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