In Brief: Judge Will Hear Infringement Suit Against Wells

Wells Fargo & Co. and co-defendants lost a bid to knock a mutual fund copyright infringement lawsuit out of court.

Last week U.S. District Court Judge Shira A. Scheindlin for the Southern District of New York denied a motion made by Wells along with its fund distributor, Stephens Inc., and Barclays Global Advisors, to dismiss the case.

At issue is whether Wells, its mutual fund distributor, Little Rock, Ark.-based Stephens Inc., and a former investment management affiliate took the format for Wells Fargo's LifePath Funds from plaintiff John C. Boyle. He claims they used his copyrighted proposal for lifecycle mutual funds without compensating him.

Wells, Stephens, and the other defendant, San Francisco-based Barclays Global Advisors-which in 1995 acquired the Wells Fargo unit that managed the funds-have maintained that Donald Luskin, now of Barclays, designed LifePath independent of Mr. Boyle's proposal, which had allegedly been presented to Stephens in 1990. Their lawyer declined to comment on the opinion.

Although a previous complaint filed by Mr. Boyle was dismissed in August, the judge allowed an amended complaint. Wells moved to dismiss that one too, but Judge Scheindlin found it made "viable copyright claim." She also denied the defendant's motion to dismiss an unjust enrichment claim and one of breach of a contract.

Mr. Boyle is seeking a royalty fee of 50 basis points on assets under management, the amount he originally suggested in his proposal. Wells' LifePath Fund, launched in 1993, now hold $756 million of assets.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER