Agrressive promotion

[James1556]

We want to run a promotion on our website. In the promotion, someone can provide us proof of purchase of a competitors software license (emailing us proof of payment to the company or forwarding us emails from the company confirming purchase), and in return we give them a free software license for our product.

We will NOT be using the competitors images/logos, but we will explain on the promotional page how to provide us with proof along with using the competitors name repeatedly. We will NOT be putting anything subjective on the page about the competitor whatsoever.

We are based in the UK, and the competitor is in the USA. The competitor has the funds to respond with legal action if they wanted to.

Has this been done before? (I think it has but can't find examples) and is this type of promotion legal? Is it/will it infringe on the competitors rights at all?

 

[James1556]

Any help would be appreciated

 

[Steve Sellers]

So to clarify, anyone who buys software from a competitor can approach you and get free software?

If so, I can't see any legal problem with that.

 

[James1556]

Yes that's the promotion we want to run. If you email us proof of purchase of the competitors product we email them back a free license for our software.

 

[Steve Sellers]

Yes that's the promotion we want to run. If you email us proof of purchase of the competitors product we email them back a free license for our software.

Can't see any problem in it legally. Would you not want to pinch the customers before they go to the competitors though?

 

[James1556]

It's going to be run as a limited supply campaign to penetrate into a market that isn't aware of us. We could lose out on future sales of course but we think it's a calculated risk.

 

[Homer J Simpson]

I see where you're coming from, but what if I was a potential customer who couldn't decide between the two of you.

When you run the promotion, I could buy the other companies software and get yours for free. They still make a killing, you make nothing and I get both software for the price of one!

 

[James1556]

That's an excellent point (didn't even think of that!) but we're protected from that as the competitors product costs 15x more than ours.

 

[Homer J Simpson]

That's an excellent point (didn't even think of that!) but we're protected from that as the competitors product costs 15x more than ours.

Then concentrate on that point. And if you can try to match like for like on their features, or even provide more features in your software. Then your marketing can simply ask "Why pay ££££££ when you can have it all and more for £££ ?"

 

[internetspaceships]

Why would they want to use the free copy of your software when they've paid for the other one ?

 

[James1556]

Because their customer base we perceive as being at a very low point as some of them may feel they have been let down in a big way.

We're having a small trickle of users moving over to us but we want to make ourselves better known in the customer base of the competitor and hope this promotion would go semi viral.

 

[internetspaceships]

You've considered that if it goes viral lots of people will expect your software to be free for all?

You need to be extremely careful on this.

I'd recommend a time limited fully working copy instead. By the way for the record a division of my company is a software distributor for a niche product if that adds to credibility.

 

[The Resolver]

The original question that was posed was not as to the viability of the business model but whether there is any restriction in law on how the competitor can be referenced.

So long as the logo and trademark is not used, then there is no IP breach. However, I imagine you also want to make use of the competitor's name in searches so as to waylay prospective buyers. This is an interesting area and whilst to use a protected name to direct customers to your site is essentially to breach IP, there has been case law to suggest this may not necessarily apply to searches and there are ways round this.

You will have to be careful what you say about competitors and how you describe your offer to avoid breaching the Consumer Protection from Unfair Trading Regulations 2008 ( for consumer software or the equivalent B2B provision being The Business Protection From Misleading Marketing Regulations 2008) , the boundaries for breach of both of which are effectively still being identified, especially with regard to comparative advertising (need to also check the source Directive on Comparative Advertising (2006/114/EC). For example are you sure your product is 'like for like'? What you say may be truthful now but tomorrow the competitor could change their price/deal/deliverables to then make your statements untruthful. So you need to carry out a daily check (sign up to monitor website changes).

Can I also throw in another googly - US law may also impact! Make sure your server profile is exclusively UK based. Many UK sites make use of US based hosting. UK virtual hosts may effectively host in the US. If the third party have deep pockets, they may find ways to hurt you whatever UK law says. When one party has a deep pocket for their lawyers and the other does not, then litigation can be like poker and, whatever the law says (ie whatever the sequence of the cards), the deep pocket, more often than not, eventually wins. Not trying to put you off , just making sure you take care.

 

[internetspaceships]

Good points Resolver and I accept your criticism.

I would add that whether it's legally legally restricted or not is only part of the advice that could be construed as constructive.

Legal or not, if the end result could be a devaluation of the product to zero then it's still potentially a bad idea.

 

[The Resolver]

Good points Resolver and I accept your criticism..

I wasn't intending any criticism of the previous responses, which were all very interesting and helpful. Just putting in my legal two penn'th

 

[internetspaceships]

Haha, I accepted it mate, no harm done. Technically you were quite correct in your observation Graham.

 

[James1556]

We have a UK web host who's physical servers and network location is firmly and solely inside the UK. We're going to run the promotion, for obvious reasons I can't link to it but if people are interested I'm happy to give a review of the promotion after it's been run.

 

[James1556]

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