With the advances and increasing popularity of internet technology, different types of innovative financial activities and services have been developed. Such activities and services, together with various technologies in the fields of mobile communication, social networking, cloud technology, and big data analysis, have given rise to a new industry called financial technology ("Fintech"). Fintech covers a wide range of products and services such as payment, investment, insurance, financing, crowdfunding, and so on. In addition to traditional financial institutions, online shopping platforms, logistics operators, and even the communication and information technology sectors are all eager to develop and patent Fintech innovations. In fact, a considerable number of Fintech patent applications have been filed in all major countries of the world. Aware of this situation, the Financial Supervisory Commission (FSC) of the Executive Yuan publisheda White Paper on Financial Industry Development Policy on May 17, 2016 and another White Paper on Fintech Development Strategy on May 18, 2016. These two White Papers have confirmed the importance of Fintech development in the nation's future financial policies.

According to the statistics in the online database of the Intellectual Property Office, the number of Fintech patent applications that have been published or laid-open in Taiwan has increased considerably each year since 2011 (see Figure 1), especially in the areas of marketing, shopping, billing, auction, and e-commerce (International Patent Classification/IPC code G06Q30). In 2015 alone, more than 700 patent applications were laid-open or published.

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Figure 1

(Note: IPC code G06Q20 covers payment schemes, structural frameworks, and protocols; IPC code G06Q30 covers commerce, such as marketing, shopping, billing, auctions, and e-commerce; IPC code G06Q40 covers finance, insurance, tax strategies, processing of corporate or income taxes)

Figures 2-4 show the number of laid-open/published patent applications filed by each of the top four applicants in Taiwan in relation to the services and products under the three IPC codes mentioned above.

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Figure 2

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Figure 3

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Figure 4

Fintech often refers to software or business methods, the patentability of whichhas been a crucial issue in patent law in many countries. For example, Article 21 of the Patent Act of Taiwan states that an "invention" is "the creation of technical ideas, utilizing the laws of nature." That is, the invention for which patent protection is sought must have a technical character. If the claimed business method merely involves man-made rules, such as social norms, empirical rules, or economic principles, the method does not fall within the statutory definition of an invention. Regarding the patentability of Fintech innovations, Chapter 12 (concerning computer software-related inventions) of Volume 2 of the Patent Examination Guidelines states in part: "For computer software-related inventions, if any feature recited in a claim directed to computer software is not technical in nature, that feature does not contribute to the technical character of the claim. If the feature is non-technical, it must then be determined whether the non-technical feature, when operating in coordination with the technical feature(s) of the claim, can contribute to the technical character of the claim." That chapter also states that if the invention as a whole is technical (for example, being capable of overcoming a technical problem or solving a problem by certain technical means, therebyproducing a technical effect on the entire system, such as enhancing the security of an information system, increasing its operational efficiency, improving the accuracy of image recognition, or improving the system's stability), the invention will be deemed to meet the statutory definition of an invention. That chapter further states that in determining whether the claimed invention as a whole is technical, consideration should be given as to whether the computer software or hardware is an indispensable for solving the problem and as to the distinctiveness of the computer software or hardware. Therefore, in order to meet the patentability requirements prescribed in the Patent Examination Guidelines, claims directed to Fintech innovations should include features indicating that the claimed subject matter involves the coordinated operation of software and hardware to process information and that the coordinated operation has a technical character.

The Intellectual Property Court (IP Court) has heard several cases concerning Fintech patents and has addressed the patentability and infringement issues of this kind of patents in its judgments. For example, in Judgment No. 2013-Min-Zhuan-Shang-Zi-25, the IP Courtstated that the disputed patent's only contribution to the prior art was a change in the man-made rules used inprior art auction methods. The disputed patent did not involve any technologies used in computer hardware or software; it was not combined with any particular machine or device, nordid itchange a certain object into a different form or substance. For these reasons, the IP Court decided that the disputed patent did not meet the definition of an invention. With regard to the infringement claim, according to the claims of the disputed claims, a "seller," an "auction system operator," and a "buyer" must be involved in each step of the patented method. Although the defendant in that case could act as a seller as well as an auction system operator, it could neither act as a buyer nor have directcontrol over the actions of a buyer. Since there was no buyer, it was impossible to carry out all the steps of the claims of the disputed patent. The IP Court thus concluded that there was no infringement under theall-elements rule.

From the above example, it can be seen that whether a patent can effectively protect a Fintech invention does not only depend on the features of the invention, but also depends onthe way in which claims are drafted. Patentclaims must be drafted in such a way that they comply with the regulations and standards applicable in different countries to ensure patentability; all the possible scenarios that may occur during implementation must also be considered in claim drafting; otherwise, even if a patent is granted, the patent holder may not be able to enforce the patent against others.