Financeware, a wealth management system for financial advisors, yesterday issued a press release announcing it had sued UBS for patent infringement stemming from UBS’s use of MoneyGuide Pro, a financial planning software application for advisors.
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“We believe that our recently issued patents validate that our Wealthcare process is groundbreaking in the industry,” said David Loeper, the founder and Chief Investment Officer of Wealthcare Capital Management and Chairman of Financeware, Inc, in a press release. “It would be unfair for UBS, or any other organization or individual advisor, to use our intellectual property without our permission and without fairly compensating us. We filed suit today to protect the investment we have made in this intellectual property, and to protect the investments of our advisors, licensed users of the system and our advisory clients.”
Reached at his home last night, Bob Curtis, the founder and CEO of PIEtech, which makes MoneyGuide Pro, refused to comment on the record, other than to say, “We were not infringing on his (Loeper’s) patents and will vigorously and aggressively defend ourselves against these claims.”
Loeper did not respond to a phone call last night seeking additional comment.
While Financeware sued UBS, the real target of the legal action is MoneyGuide Pro. UBS provides a version of MoneyGuide Pro to its advisors. Typically, broker-dealers and custodians in offering wealth management systems to their advisors require vendors to indemnify them against patent infringement and other claims related to use of a vendor’s systems. Assuming such a clause in PIEtech’s agreement with UBS, PIEtech will foot legal bills for the big brokerage.
The legal tussle has been simmering for several years. In April 2008, I became aware of the patent applications made by Loeper and contacted patent attorneys to assess the chances for success. At that time, patent attorneys said Financeware’s patent applications tracked with a growing by businesses to patent business methods. If Financeware’s infringement claims are upheld in court, it could have a chilling effect on development of financial planning software, since developers could not use some of the innovative goal-based financial planning techniques employed by these apps. I chose not to report on the simmering legal tangle because no lawsuit had been filed back then and the financial crisis rendered the story less newsworthy.
Financeware was the first web-based collaborative financial planning application made available to advisors. In recent years, Financeware shifted from selling its app to advisors to becoming a wealth manager using the software to apply its methodology.
PIEtech’s MoneyGuide Pro’s origin dates back to 1985 and is also extremely innovative. It’s the most reviewed software app in the A4A’s ratings database
The lawsuit will likely take years to be settled.