Keeping it Under Wraps: Trade Secrecy for Offshore Asset Protection Plans

concepts.87 Though it may seem a minor point, this lone advent may foreclose upon a number of business method patents that fail to disclose unique technological innovations governing a strict implementation of their underlying concepts. Anticipation of this doctrinal refinement may have already affected the outcome of a once much heralded case, Financeware, Inc. v. UBS Fin. Servs., which was filed in the United States District Court for the Southern District of New York during the course of Alice’s litigation.88 The plaintiff in this lawsuit, Financeware, accused UBS Financial Services, a major international financial planning and advising firm, of infringing two financial advising patents that Financeware had received in 2009 and 2010.89 The subject patents cover processes designed to facilitate the objective assessment of a client’s financial goals, as well as a claimed proprietary model to determine the best means by which to achieve them.90 The firm PIEtech, Inc., which authored and distributed the allegedly infringing software used by UBS, was permitted to join the suit upon its own motion as an intervening party.91 The patents at issue in Financeware appear somewhat parallel in scope to the patents rejected in Bilski and Alice. The claims of at least one of these patents exceed the software, code, and/or digital processing systems used in a financial advising practice, and seem to encompass the information and assessments underlying the very process of advising.92 This litigation wrought great alarm among industry analysts, who feared that if this suit were successful, it would give the United States Patent and Trademark Office dispensation to grant patent monopolies on not just “the core tenets of . . . financial planning” but “the financial planning process itself.”93 The potential success of Financeware in this action threatened to reduce the financial planning world to a virtual fiefdom, by 87. Jonathon C. Anderson, Supreme Court Invalidates Business Method Patent: What You Need to Know About Alice Corp. v. CLS Bank Int’l, FAEGRE BAKER DANIELS, (July 2, 2014), http://www.faegrebd.com/21765. 88. Complaint, Financeware, Inc. v. UBS Fin. Servs., Inc., No. 11 CIV 5503, 2011 WL 3565794 (S.D.N.Y. Aug. 8, 2011). 89. Id. 90. Karen DeMasters, Lawsuit Against UBS Has Far-Reaching Implications For Advisors, FINANCIAL ADVISOR, Aug. 11, 2011, available at http://www.fa-mag.com/news/lawsuit-against-ubs-has-far-reaching-implicationsfor-advisors-8017.html. 91. Financeware, Inc. v. UBS Fin. Servs., Inc., No. 11 Civ. 5503, 2011 WL 6092311, at *4 (S.D.N.Y. Dec. 6, 2011). 92. U.S. Patent No. 7,765,138 (filed Dec. 15, 2004); U.S. Patent 7,562,040 (filed July 27, 2007). 93. DeMasters, supra note 90. 308 CHICAGO-KENT JOURNAL OF INTELLECTUAL PROPERTY [Vol 14:1 effectively conferring exclusive rights to private parties to “own the financial planning process and . . . charge a tariff for its use.”94 The parties eventually settled this action in November 2012.95 Upon the settlement’s announcement, the financial planning community breathed a collective sigh of relief.96 While the parties concluded and maintained their settlement in confidence, conspicuous elements and absences in public reports of their accord suggest that Financeware held little hope of being able to enforce its patents. Granted, the defendants in the suit seem to have agreed to drop their challenges to the validity of Financeware’s patents.97 UBS, however, continued to use the disputed financial advising software and systems without interruption, and PIEtech suffered no apparent impedance of its operations, adding substantially to both its client list and commercial volume during and after the litigation.98 This continuation and expansion of the defendants’ trade occurred even though the parties reported no licensing activity between the litigants, and the software remains in distribution with no visible sub-licenses attached.99 This suggests that the litigants may have anticipated the subtle strengthening of Bilski, with the implicit result that Financeware essentially conceded to its opponents. The denouement of Financeware holds great significance for the potential patentability of FAPT Plans. It suggests that patents claiming specialized knowledge and methods of assessing information and recommending patterns of action may be difficult to enforce going forward, even assuming the issuance of such patents after Alice. While Financeware did involve patents disclosing computerized implementation, the broader issues underlying that case place it virtually on all fours in relation to FAPT Planning and analysis. At least one of Financeware’s patents contains claims directed to a financial planning approach alone, disclosing methods and formulas designed to achieve optimal financial and organizational outcomes without reference or recourse to any specific mechanical