Intellectual Property and the Mortgage Industry: A Primer

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Intellectual Property and the Mortgage Industry
A Primer

• Gabe Minton, VP Industry Technology, MBA

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Agenda and Take Aways

• Focus on patents
• Key trends with patents
• An example patent Business Process and Method
  for Online Financial Products Trading
• IP and standards-setting (further discussed by
  Mike Chanin)

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Types of Patents

• System An actual tangible object (unless
  software)
• Process Business process methods
• It is all about the CLAIMS!

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Key Changes by Congress, 1982

• The USPTO changes its funding model from tax
  dollars to application and related fees
• The USPTO is incentivised to handle more
  applications
• A special court is established to handle patent
  cases the Court of Appeals for the Federal
  Circuit (CAFC)
• This court went on to broaden and strengthen the
  rights of Patent Holders

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Key Patent Cases

• Apple v Microsoft (high profile IP)
• Wang, Dell, and Rambus (standards and IP)
• Linux v Microsoft (not a real case, really open
  v closed-source)
• Industry hot (and protected) topics
• eNotarization Arcanus
• Numerous eMortgage patents eOriginal,
• eRecording inGeo
• Imaging
• Workflow

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Patent Activity in the US
(in thousands)
Source Innovation and its Discontents, Jaffe
Lerner
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Number of Patent Suits Initiated
Source Innovation and its Discontents, Jaffe
Lerner
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Key trends

• Patent Applications UP!
• Larger companies building extensive portfolios
• Portfolio companies
• Small companies/independents are filing less
• Number of patent awards UP!
• Number of court cases won by patent holders UP!
• Companies would rather skirt or pay out
• Small companies cannot afford adequate protection

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USPTO.GOV
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Example Patent
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Abstract

• An online centralized financial products exchange
  system. The invention is a system, method and
  computer program product that creates a
  "marketplace" for end-to-end financial products
  life cycle transactions. More particularly, the
  invention provides a centralized exchange system
  for the trading of loans. The system includes a
  plurality of Web servers for receiving and
  providing loan information from and to
  subscribers on several Web clients and a database
  server for searching the pre-set rules to match
  potential buyers with sellers. The system also
  includes a database for storing information
  relating to negotiations (i.e., bidding) for the
  sale of loans and for storing pre-set rules for
  pre-registered buyers and sellers. The system
  further includes a database and server for
  storing risk/return information that is made
  available to subscribers for analysis.

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Excerpt Claim

• A centralized system for trading financial
  products in the secondary market, wherein the
  system is capable of being accessed by a
  plurality of subscriber, the system comprising
  means for receiving loan information for a
  plurality of loans in a loan pool from a first
  subscriber
• means for storing said loan information in a
  database
• means for receiving selection inputs from a
  second subscriber for said loans in said loan
  pool, wherein said selection inputs indicate
  which of the loans in said loan pool said second
  subscriber wishes to purchase, whereby said
  system allows trading of loans in the secondary
  market and
• means for allowing said first subscriber to
  accept said selection inputs entered by said
  second subscriber, wherein a trade is processed
  when said selection inputs are accepted

THERE ARE 35 MORE CLAIMS IN THIS PATENT!
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IP and Standards Organizations

• How do you create a policy that protects peoples
  IP, while allowing them to contribute it to the
  common good
• Methods researched
• Public Domain
• GNU/CopyLeft
• Royalty Free Licencing
• RAND Approach
• Key case Wang, Dell, and Rambus

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QA

• Gabe Minton, VP, Industry Technology, MBA
• gminton_at_mortgagebankers.org
• 202.557.2821
• http//www.mismo.org
• http//www.sisac.org
• http//www.mortgagebankers.org
• http//www.uspto.gov