One mutual fund that was doing things the
way found out imitation can be less than flattering.
fund had to change its name to the
fund last month after
, Buffett's Omaha-based holding company, sued it for encroaching on its trademark.
"Mr. Buffett decided he probably didn't like us using the name," says Douglas Davenport, president of
Atlanta Investment Counsel
, the fund's adviser. When Berkshire Hathaway's lawyers asked for a name change, "we got the paperwork rolling the next day," says Davenport.
The suit was handled by
Munger, Tolles & Olson
, the Los Angeles law firm of Buffet partner
. Lawrence Barth, an attorney with the firm, says Berkshire objected to the use of the name in conjunction with the fund's investment style. The suit was dropped April 2, according to court records at the U.S. District Court in Los Angeles.
"This was a clear instance where a mutual fund was trying to trade on the goodwill and the secondary meaning that has been built up ... by the Berkshire name in a particular area of investing," Barth says.
Buffett's Omaha office said he was traveling and not available for comment. Munger's office said he had no comment.
The Berkshire, er, Wisdom fund states clearly in its prospectus that it's trying to emulate Buffett's returns by buying the same stocks he holds in his portfolio. But it also states clearly on the first page that it's not affiliated with Berkshire Hathaway, and the
Securities and Exchange Commission
approved the fund's use of the name. The fund was launched in February and has $750,000 in assets. (
profiled the fund in March.)
"They didn't mind the fact that we were replicating the portfolio," Davenport says of Berkshire Hathaway. Speaking with a slight southern drawl, he says Buffett's lawyers asked "real politely" if he couldn't simply change the name to something else.
"Having a portfolio so similar and then with the name being so similar, they felt like that was just too much," Davenport says. The Wisdom fund's new prospectus was filed with the SEC April 12.
There are other companies, and even other mutual funds, that use the Berkshire name. One,
(formerly named Berkshire Capital Growth and Value), uses a concentrated portfolio, like Buffett, and even holds Berkshire Hathaway stock. But it mainly invests in high-technology stocks like
Malcolm Fobes III, manager of Berkshire Focus, says he's never been contacted by anyone from Berkshire Hathaway and isn't worried about incurring the wrath of Buffett anytime soon.
"We're about as far away from Mr. Buffet's investment strategies as you can get," Fobes says. "We invest in large-cap technology, you know. Buffett would never own Yahoo! in his lifetime."
Buffett has said repeatedly he doesn't understand the philosophy or movements of Internet stocks and won't invest in the area as a result.
Barth says Berkshire Hathaway doesn't object to all uses of the Berkshire name -- just those explicitly paired with the Buffett style of investing.
"Berkshire Hathaway recognizes that it cannot take the word 'Berkshire' out of the language. There's a mountain range by that name and plenty of other things," Barth said. "But it's fairly clear from looking at
the former Berkshire Fund's prospectus, they were trying to imitate Berkshire Hathaway."