A second lawsuit over a patent on the concept of auto enrollment, as well as contribution acceleration and defaulting into target-date funds, has come to a screeching halt. The lawsuit claimed that the patent had been misappropriated.
T. Rowe Price, the defendant in the lawsuit brought by GRQ Investment Management, announced that GRQ had “voluntarily dismissed” all claims it brought in the U.S. District Court for the Eastern District of Texas alleging patent infringement based on T. Rowe Price’s offering of certain automated tools used to administer 401(k) plans.
As a result, T. Rowe Price says it will continue using its automated 401(k) plan tools without the payment of any settlement or licensing fees to GRQ.
Commenting on the litigation, David Oestreicher, Chief Legal Counsel, T. Rowe Price Group, Inc., said “We’re pleased with the outcome of this matter and consider it a win for the firm and our clients. We’ll continue with business as usual offering these automatic services, which are important tools that help many 401(k) plan participants save more for retirement.”
The litigation, reported last summer by The Wall Street Journal, was filed on behalf of GRQ by the Dallas law firm Ni, Wang & Massand. The previous suit, dismissed in January 2015, according to the Journal, had alleged that Financial Engines infringed on two different patents issued to the late Brian Tarbox and DOL pension lawyer Mark Greenstein about the provision of objective financial advice in 401(k)s.
Tarbox, an inventor, has been described as being instrumental in obtaining ERISA Advisory Opinion 2001-09A, more commonly referred to as the “SunAmerica Opinion,” which was issued in late 2001.
