WisdomTree Investments (NasdaqGM: WETF) and Research Affiliates on Thursday said Research Affiliates will withdraw its patent infringement lawsuit related to so-called fundamentally-weighted indices.
“The settlement agreement resolves all matters pertaining to the lawsuit,” the firms said in a press release.
“Research Affiliates has agreed to a one-time payment of $700,000 to WisdomTree. WisdomTree and the other defendants are not required to make any current or future payments to Research Affiliates,” according to the release.
WisdomTree shares were up more than 10% on Thursday morning. The ETF manager’s stock was upgraded to buy from underperform at Bank of America, Benzinga reports.
In late 2011, index provider Research Affiliates filed a suit alleging WisdomTree financial products based on fundamental factors infringed three Research Affiliates patents.
Robert Arnott is the chairman and founder of Research Affiliates. He is a respected market commentator and previously served as editor of the Financial Analysts Journal. In the ETF business, Arnott is best known for developing benchmarks that weight stocks by fundamental factors rather than by market cap.