Research Affiliates sued ETF manager WisdomTree Investments for allegedly infringing on three of its patents that include a method for using accounting-data-based indexing to create a portfolio of assets.
Financial products that Research Affiliates claims infringe its patents include WisdomTree Dividend Index and WisdomTree Earnings Index, according to a complaint filed in U.S. District Court in Santa Ana, Calif.
“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,” Rob Arnott, Research Affiliates chairman, said in a statement.
Research Affiliates said $78 billion in assets are managed using investment strategies it developed. The company told WisdomTree in 2005 that it was applying for one of the patents at issue, according to the complaint.
WisdomTree responded by saying that Research Affiliates’ intellectual property rights were “speculative at best” and that WisdomTree was submitting prior public information about inventions related to the proposed patent to the U.S. Patent and Trademark Office, according to the complaint. The office issued the patent to Research Affiliates, according to the filing.
Stuart Bell, a spokesman for WisdomTree, didn’t respond to messages seeking comment.
Research Affiliates is seeking a jury trial and a court order to stop WisdomTree from using the methods alleged to be patented.
WisdomTree manages about $11.4 billion in ETF assets.
