Software Patents, 1998

October 22, 2008
Intellectual Property News and Interesting Facts

In 1998, the US Federal Circuit issued its State Street Bank & Trust v. Signature Financial Group decision, which further clarified the patentability of computer software in the United States. In this case, Signature Financial had obtained a patent on a “Hub and Spoke” method of running mutual funds.

In this method, several mutual funds (or “spokes”) pool their investment assets into a single investment portfolio (the “hub”). Software then determines the value of each fund based upon a percentage ownership of each of the assets in the hub portfolio.

This information is tracked on a daily basis, and is used to track fund share pricing and tax accountability. State Street Bank asked the court to declare this invention to be not patentable as a mere mathematical algorithm or as a business method.

The Federal Circuit rejected the arguments of State Street Bank, and instead upheld the patent by explicitly stating that business methods can form patentable subject matter.