The Litigation of Financial Innovations

This paper examines the litigation of patents relating to financial products and services. I show that these grants are being litigated at a rate 27–39 times greater than that of patents as a whole. The patents being litigated are disproportionately those issued to individuals and to smaller, private entities and those with features that may proxy for higher quality. Larger entities are disproportionately targeted in litigation. I discuss how the findings are in large part consistent with the theoretical literature on the economics of litigation.