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Rating:Research Affiliates Files Suit Against WisdomTree Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, December 06, 2011

Research Affiliates Files Suit Against WisdomTree

News summary by MFWire's editors

Research Affiliates, LLC has filed a lawsuit against WisdomTree Investments, Inc. [profile] and its related entities including Mellon Capital Management Corp., and ALPS Distributors Inc. [see profile] for patent infringement.

The lawsuit, which was filed in the United States District Court for the Central District of California, alleges that WisdomTree financial products based on fundamental factors infringe three Research Affiliates patents covering unique methods and systems for index-based investing.

"Our main focus is product quality and performance, but we will protect our intellectual property and the interests of our business partners when our patents are infringed," stated Research Affiliates Chairman and CEO Rob Arnott.

In its complaint, Research Affiliates seeks an injunction requiring WisdomTree to cease using Research Affiliates' patented technology and seeks compensatory and enhanced damages for WisdomTree's infringement.

IndexUniverse also covered the suit.


Research Affiliates, LLC, announced today that it has filed a patent infringement lawsuit against WisdomTree Investments, Inc. and its related entities in the United States District Court for the Central District of California. The lawsuit alleges that WisdomTree financial products based on fundamental factors infringe three Research Affiliates patents. In its complaint, Research Affiliates seeks an injunction requiring WisdomTree to cease using Research Affiliates' patented technology and seeks compensatory and enhanced damages for WisdomTree's infringement. The complaint also accuses WisdomTree's subadvisor, Mellon Capital Management Corp., and WisdomTree's exchange-traded fund distributor, ALPS Distributors Inc., of patent infringement.

The patents at issue cover unique methods and systems for index based investing:
  • -- U.S. Patent No. 7,747,502 entitled "Using Accounting Data Based Indexing to Create a Portfolio of Assets";
  • -- U.S. Patent No. 7,792,719 entitled "Valuation Indifferent Non-Capitalization Weighted Index and Portfolio"; and
  • -- U.S. Patent No. 8,005,740 entitled "Using Accounting Data Based Indexing to Create a Portfolio of Financial Objects."
    "Research Affiliates has always been a leading innovator of financial products, and we have protected our intellectual property with patents," said Research Affiliates Chairman and CEO Rob Arnott. "Our main focus is product quality and performance, but we will protect our intellectual property and the interests of our business partners when our patents are infringed."

    The Research Affiliates Fundamental Index(R) methodology has received numerous awards for innovation. Historically, RAFI(R) indices have generated significant outperformance over time by using measures of a company's economic footprint and through its rebalancing process that shifts assets into the least-favored securities and out of the most-favored--and thus most expensive--securities.

    About Research Affiliates, LLC
    Research Affiliates, a global leader in innovative investing and asset allocation strategies, operates worldwide from its Newport Beach, California, headquarters. Dedicated to solving complex investment issues, the firm creates innovative strategies that respond to the current needs of the market. Leveraging its strong research focus, Research Affiliates distributes products in partnership with some of the world's leading financial institutions. These affiliations take the form of licensing agreements, sub-advisory services, and direct relationships with clients.

    The firm is majority employee-owned. Approximately $78 billion in assets were managed worldwide using investment strategies developed by Research Affiliates, as of Sept. 30, 2011.

    The trade names Fundamental Index(R), RAFI(R), the RAFI logo, and the Research Affiliates corporate name and logo are registered trademarks and are the exclusive property of Research Affiliates, LLC. Fundamental Index(R) concept, the non-capitalization method for creating and weighting of an index of securities, is the patented and patent-pending proprietary intellectual property of Research Affiliates, LLC. 

    Edited by: Hung Tran


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