LastShadow-
Maybe you need a patent for the net?
An excerpt from today's WSJ:
>> By PUI-WING TAM
Staff Reporter of THE WALL STREET JOURNAL
State Street Global Advisors -- and this could be a first in the mutual-fund
industry -- says it has been granted a patent for a stock-selection
technique.
Is this really necessary? State Street's
patent hasn't exactly lit a fire under other
fund companies. Several competitors argue
that a patent is redundant, since most
processes are already well-protected by trade-secrets law and a veil of
silence. These rivals say State Street's patent is simply a clever marketing
gimmick.
The big Boston asset-management firm, a unit of State Street Corp.'s
State Street Bank & Trust Co., says it received a patent in June for a
so-called quantitative investment process that helps select stocks and
construct portfolios. Essentially a data-processing system, the investment
method is based on a set of neural networks, or a complex series of
mathematical equations and algorithms incorporated into a software
program.
First, information about a stock is fed into the data-processing system. A
computer program, which uses the mathematics of neural networks,
analyzes the data and spits out new information relating to the expected
risk-adjusted return for the stock. An investment portfolio is constructed
out of this new data.
While patents related to financial services aren't new -- Merrill Lynch &
Co. opened the floodgates for financial-services patents in the early 1980s
when it was granted one for its cash-management-account product-patent
experts say the State Street Global Advisors patent is probably the first
that deals with an investment management process. The U.S. Patent and
Trademark Office says it doesn't track which patents specifically relate to
a fund management style or process.
"I think this patent could be really significant because, historically, fund
groups didn't think they could get patents on their investment processes,"
says Janet Olsen, a lawyer who specializes in mutual funds at Bell, Boyd &
Lloyd in Chicago.<<
Andrew |
