A small advisory firm also had a claim on the ETF manager's name

November 12, 2010 — 5:49 AM UTC by Brooke Southall


The Charles Schwab Corporation succeeded in closing its deal on a Boston-based manager of ETFs, but the brand name was a casualty of the process.

The big San Francisco brokerage firm completed the acquisition of Windward Investment Management on Wednesday for $150 million in cash and stock. It managed $4.24 billion as of Sept. 30. See: Schwab’s purchase of Windhaven made its asset growth soar — and RIA assets may be the afterburners.

It’s a deal that advisors and analysts applauded when it was originally announced on August 30 and Walt Bettinger, Schwab President and CEO, has made positive comments all along – including these thoughts on Wednesday. See: A look inside Schwab’s big deal with a small asset manager

“Their long-term track record of portfolio construction which has balanced risk management with market outperformance through global diversification is a tangible testament to the power of their approach and will be a great addition to Schwab’s investment management solutions.”

But the ETF manager’s name is now Windhaven after there was an impediment to keeping the long-established Windward brand.

Due diligence

During the due diligence process, Schwab discovered that a small California-based advisory firm holds the trademark on the name Windward. Schwab decided rename the acquired money manager to avoid confusion, according to Alison Wertheim, spokeswoman for Schwab.

“The Schwab and Windward leadership teams worked together to choose the new name, ‘Windhaven.’ The name Windhaven has the advantage of sharing part of the Windward name while also introducing the notion of a haven, which speaks to the firm’s relentless pursuit of managing portfolio risks in the face of ever-present economic and geopolitical uncertainty.”

There is a lesson to be learned here about the importance of establishing trademarks. The first company to use the name gets “common law” copyright privileges, according to Dan Seivert, CEO of ECHELON Partners of Manhattan Beach, Calif., an investment bank for advisory firm.


“If someone uses it after you, then all you have to do is prove that you used it first. Sometimes this is easy to do…sometimes it may be a bit difficult. If instead you take the extra step and apply for the trademark rights, then you move beyond the proof of first use and instead have a legal reservation with the patent and trademark office to use that name.”

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