Is possible to patent a trading algorithm (indicator)

Question

I know some algorithms are patentable, but not sure what are the resctrictions and limitation for this.

My question is specific for a trading indicator, something like MACD, or RSI etc, is possible to patent those things?

For example:

1. Calculate the average of the last N1 and N2 (customizable) prices
2. Plot those averages together in the same chart
3. Show a BUY signal when they cross

Is something like that patentable? and if yes, it makes sense to patent it or anybody can change a very small part to null the patent, for example "add 0.01% to every average calculated in step 1"

To be clear, I want to protect the indicator from someone else selling it (or publishing it for free), not from someone who is using that in

Answer 1

As George White stated with the same question on the Law SE site, it is very tricky to get an algorithm based patent. To get one with any real protection probably requires an accomplished patent attorney and would cost quite a bit. You'll have to file for each country you want protection in.

Since you don't seem to be interested in monetizing the algorithm, I'd suggest just publishing it. This gains you a copyright. More importantly it keeps anyone else from attempting to patent the same algorithm. If you code up the algorithm and publish the code with an open source license, anyone could use it free of charge. There would be little incentive to purchase it which should keep people from trying to sell it. Name the algorithm after yourself and perhaps you can become famous.

If you would like to monetize the algorithm it might be better to try to keep it as a trade secret and sell it as a web service.

Answer 2

It might be patentable in the U.S. but it would take very careful claiming to not be considered abstract. Unlike much of the rest of the world, a patent does not need to be "a technical solution to a technical problem" in the U.S.

As an integral part of the patenting process your application will be published. If a patent is granted one has the right to try to stop people from making, selling, offering for sale, importing or using the invention.

You say that you would allow people to perform the method without any restriction so I guess you could control someone making software that performed the method or offering a service that did it. Your idea might be to license the right to offer that service. If end users are allowed to do it for themselves that might not be very lucrative.

EDIT

I see from a comment that it is not that you want to let people use it without restriction but you misunderstand patent law and think you can't control use. To the contrary - a patent gives you the right to control making, selling, offering for sale, importing and using. This is very important to inventions that are methods, like yours. Independent development does not give someone the right to practice a patent. (There is something like this for copyrights which might be confusing.) Of course if someone independently developed it before you did, and made it public then your patent would be subject to invalidation.

Answer 3

You cannot patent the process or the indicator in Europe. Neither one of those solves a technical problem, which is one of the requirements for an invention to be patentable, namely inventiveness or inventive step. Even with a highly skilled patent attorney any European patent office, including the European Patent Office, will not grant a patent because both the process and the indicator will be regarded as a method for doing business that lacks inventive step.