Historically, financial institutions have relied on trade secrets and first-mover advantages, rather than patents, to protect their inventions. For the few financial patents that were issued, conventional wisdom was that they weren’t terribly interesting or important. In our 2014 study on financial patents, we showed that banks were breaking from past patterns and increasingly seeking patent protection. We explained that financial institutions were primarily building their patent portfolios as a defensive measure—i.e., to protect themselves from infringement suits. Indeed, the finance industry successfully lobbied Congress to include provisions in the America Invents Act of 2011 that made it easier to invalidate financial patents through administrative review. Yet, two significant developments call for a revisit of our 2014 study: first, the rise of fintech and, second, the recent $300 million verdict in the first bank-on-bank patent infringement suits—United Services Automobile Association (USAA) v. Wells Fargo. This paper explores how the rise of fintech has changed the purpose of patenting among banks, and what a possible fintech patent war would mean for the future of both the financial and patent systems in this country.

A hoary criminal law maxim provides that “ignorance of the law is no excuse.” The maxim’s apparent premise is that people should know (and abide by) the law. When the content of a law reflects deeply ingrained social norms, the premise is uncontroversial. A criminal defense predicated on ignorance of prohibitions on murder, theft, assault, or sale of narcotics would—and should—fail for multiple reasons. First, the assertion of ignorance is implausible. Second, even if it happens to be true, a defendant bears moral culpability for failing to absorb such basic social norms. Moreover, the principle extends beyond the realm of criminal law. An employer who fires an employee because of the employee’s race or religious faith similarly violates both legal proscriptions and moral norms; whether the employer actually knows of the legal prohibition is and should be irrelevant to the discharged employee’s claim.

As the costs of creating and sharing information have plummeted, some scholars question the continued utility of copyright protection, which imposes artificial scarcity so that authors can recoup creation and dissemination costs. Scholars have ignored, however, that when information is abundant, attention becomes a scarce resource. Superabundant information can overtax consumer attention.
Reducing copyright protection in this new environment may worsen the costs of attention scarcity on consumers of creative expression. Firms often compete for attention by free riding on the public interest generated by copyrighted works. If copyright protection is narrowed, new entrants have reduced motivation to create works that are clearly distinguishable from existing works. Indeed, a new entrant is more likely to create a close substitute for an existing work already available to consumers than to spend the time necessary to create a distinctly original contribution. Thus, new works are more likely to be wastefully duplicative of available content.
Calls to diminish copyright protection in response to falling costs of creation and dissemination often target the derivative right as the first mechanism to weaken or excise. But preserving copyright protections—especially the derivative right—may have unexpected benefits for consumers, including keeping attention costs in check. The effort required to create around copyright constrains entry. Compared to entry under weaker copyright protection, new entrants are likely to offer works that are less redundant, and therefore both more valuable to consumers and less likely to distract or divert attention in ways that impose undue costs on consumers. Legislators and judges may wish to exercise caution before sacrificing the attention assisting aspects of copyright protection based solely on the intuition that creators could survive with weaker incentives

Our country has grappled with the tension between its commitment to equality principles as instantiated in antidiscrimination law and its commitment to religious liberty for over 150 years. From the passage of the Reconstruction Amendments through the present day, opponents of equality for African-Americans, women, and LGBT people have argued that they should be exempt from federal and state antidiscrimination law based on their religious beliefs. The national reckoning with these requests for religious exemptions vis-à-vis race is largely settled; from those legal battles emerged “time-tested, reasonable, and workable compromises” at the intersection of religious liberty and equality in the marketplace. Within this historical trajectory sits the current-day requests by wedding vendors for religious exemptions from state antidiscrimination laws with regard to same-sex marriages.

A specter is haunting notice-and-comment rulemaking—the specter of fraudulent comments. The stand-out example—the apotheosis—was the Federal Communications Commission’s (FCC) net neutrality rulemaking in 2017. Well over twenty million comments were submitted, but millions of those were highly suspect. It turns out only about 800,000 of those comments were unique—that is, not written by a computer and not a pre-written form letter or variation thereof. And of the rest, perhaps half were submitted by computers (bots) using fictitious names or the names of real people, living and dead, who had no connection to the comment.