Wells Fargo Bank has launched a counterattack against a lawsuit claiming that it and mutual fund partners stole an idea for some innovative funds.
Wells and the partners filed a motion Monday to dismiss the copyright infringement suit, which was filed by a former New Jersey bond broker against Wells' LifePath funds. The funds, launched in 1994, become increasingly conservative as the investor matures.
An attorney for Wells and the other defendants-Stephens Inc. and Barclay Global Advisors, formerly Wells Fargo Nikko Investment Advisors-said the plans for the funds came directly from an executive with the advisory firm.
The suit was filed in February by John C. Boyle, who claimed that he gave the concept and marketing plans to a Stephens executive in 1990. Mr. Boyle, formerly a broker at Butcher & Singer Inc., had obtained copyrights on marketing materials for a series of funds to be called Money for Funds.
In the motion for dismissal, filed in U.S. District Court in New York, Wells and its partners maintain that the LifePath funds should not be subject to any copyright lawsuit.
"Indeed, by registering his copyright, plaintiff put those underlying ideas in the public domain and thereby destroyed any claim he may have had that they were 'trade secrets,'" their motion stated.
And as a practical matter, Wells created its product with no knowledge of Mr. Boyle's idea, said Michael B. Carlinsky, a New York attorney at San Francisco-based Orrick, Herrington & Sutcliffe representing all three defendants. He said the product was created by Donald Luskin, a Barclays executive formerly with Wells Fargo Nikko.
"Even if someone had copied the plaintiff's idea, he wouldn't have a claim because he's responsible for disseminating the materials without a request to maintain the confidentiality of the idea," Mr. Carlinsky said.
The LifePath funds currently have assets of $590 million. Like Mr. Boyle's proposed funds, they are named for the years that customers redeem their shares, such as LifePath 2010. Both sets of marketing literature describe investment "series" for retirement, education costs, or other long-term needs.
"These guys took the elements that were a unique expression to my client and copied them," said Raymond J. Dowd, Mr. Boyle's lawyer.
