ARTICLE BEING ADDED TO OUR ONLINE ARCHIVE

Promotions & Incentives: Shell stands firm on Smart charges

May 1998

Shell will defend itself against claims by its former promotional agency Don Marketing, that it came up with Shell’s Smart consortium idea.

Don Marketing director, John Donovan, issued a writ against Shell on 9 April claiming multi-million pound damages.

Shell and Don Marketing have been discussing the allegations since Shell’s AGM last year. Both parties have assembled evidence and interviewed witnesses in the interim.

The action relates to proposals Don Marketing claims to have put to Shell in 1989 for a “multi brand” loyalty scheme. The agency claims it went as far as seeking out potential partners, including Tesco and Sainsbury’s before Shell said it did not wish to proceed with the idea in 1990.

The action is the latest from Shell’s former business partner. Don Marketing has sued the company three time in recent years over promotional ideas it claims to have presented to the company that were subsequently used. All of the actions have been settled out of court.

A Shell spokesperson said the writ would not inhibit the scheme’s national roll out.

Don Marketing has posted details of the case on a website which it is publicising.

Link to Original Article

http://www.shellnews.net/PDFs/PromotionsandIncentivesMay1998.pdf

Sales Promotion Magazine

May 1998

Shell in legal row

SP agency’s claims over Smart Card cause troubled water for oil company

A promotional agency is suing Shell (UK) for allegedly breaching copyright on the concept idea Shell used to create its multipartner Smart Card loyalty scheme.

The allegation follows two previously unpublished out- of-court settlements which were kept secret as part of the agreement reached by the two sides.

The legal dispute between Shell and Don Marketing could delay the card programme even further - its launch was originally planned for the end of last year before partners failed to agree on a date.

The High Court writ against Shell was issued on 16 April, 13 months after Don Marketing first brought the claim to Shell’s attention, when Shell agreed to supply Don Marketing with a detailed account of the origin of the SMART concept.

During the subsequent months, both parties have assembled evidence and interviewed witnesses, yet Shell have allegedly been unable to name the creator of the concept, instead implying that the SMART scheme evolved from Shell’s Collect & Select voucher programmes.

Don Marketing claims that evidence shows that the original concept for the card was devised in response to a specific brief from Shell. A different agency was subsequently briefed to produce a scheme which replicated Don Marketing’s proposals.

Two independent witnesses - loyalty card expert Professor Steve Worthington and card manufacturer David Christian, are backing the claim that Don Marketing’s confidential proposal to Shell laid the foundation stones for the current Shell Smart Card scheme.

“Any impartial assessment of the evidence would show that the case is indefensible on Shell’s part,” says Don Marketing managing director John Donovan. “This is a matter of principle. One of the largest companies in the world shouldn’t need to steal ideas from promotional agencies.

“Quite apart from the cost to us - which has already exceeded £40,000 - and the effect this is having on day-to-day business, there are matters such as the two ISP Gold Awards, which were awarded to Option One for Shell’s existing Smart Card scheme.”

Despite the previous settlements becoming public, a statement issued by Shell states that “the claim has been carefully investigated”, but concludes that “Shell UK is satisfied that it is entirely without substance … we intend to fight [John Donovan’s l claims vigourously in court.”

Shell in legal row (Original Article)

Loyalty Magazine: Shell Smart copyright battle gets nastier

John Donovan, a director of Don Marketing UK ltd, believes he owns the copyright to the Shell Smart loyalty scheme. He has been involved in protracted legal wrangling with Shell UK and last month issued a High Court writ when talks broke down. Recently he decided to write to all Shell partners and petrol station managers warning them they may face legal action if they participate in the scheme. Donovan spoke to Loyalty about why he believes the copyright is his.

The advertisement in Marketing Week states that “Any business contemplating becoming a partner in the SMART consortium scheme is hereby notified that any such participation may involve an infringement of rights, rendering it liable to legal action.” It refers interested parties to its web site at www.don-marketing. com.

John Donovan is stepping up pressure on one of the largest company in the world, in his fight for recognition that he thought of the Shell Smart Card idea first.

That David is taking on Goliath is obvious, and in itself proof of the depth of feeling that the small man has been wronged.

But why has John Donovan taken so long to fight back, and why does he feel he can win against such a hefty opponent?

When Loyalty first spoke to him John had just lodged his High Court writ and was gathering strength for the offensive.

Explaining why his action had taken so long he said: ‘Taking on the world’s largest company is a daunting prospect. When the Shell card scheme was first launched, it didn’t appear to be the same scheme, but when in March last year they launched the Scottish multi-partner scheme, it then became obvious it was my original idea. Since then I have been gathering evidence, and expert opinions, including that of Professor Steve Worthington, who agrees with me.

Worthington said: “Based on the information I have received [from Don Marketing] the presentation by Don Marketing to Shell UK on October 23, 1989 does seem to lay the foundation for the current Shell Smart Scheme.”

Make Money

DM has had a business relationship with Shell stretching back almost two decades and has been responsible for many of Shell’s most successful promotions, both in the UK and overseas, including the Make Money game in the UK, Ireland and Singapore.

During that time Donovan has issued writs against Shell three times, concerning the Nintendo game, the Now Showing promotion and the Make Money game. “In all three cases,” says Donovan, “it was the same individual concerned, and in all three cases, Shell settled out of court.”

DM claims its concept was devised in response to a specific brief from Shell. The brief itself stemmed from research carried out by DM which first identified flaws in loyalty schemes commonly used at that time, such as Shell’s Collect & Select scheme. John Donovan says he suggested a card scheme, using a number of partners.

The issue has now turned acrimonious, with Don Marketing warning partners of their liabilities and Shell insisting that when it reaches the High Court, it will undoubtedly win.

Explaining why he is prepared to risk so much to fight such an unbalanced battle, the director said: “We thrive on good ideas, and have to protect them. Shell has always abided by agreements in the past, and we had a fruitful relationship until one individual came onto the scene, and working unsupervised, made agreements with me that he later denied.

“We have had legal opinion that we have a strongly arguable case with good prospects, and that the claim will likely be extended to overseas exploitation of the concept by the Royal Dutch/Shell Group.”

Although Shell’s legal department has managed to get his letter revised, Donovan will also be writing to all 400 Gulf stations currently being rebranded by Shell, warning of the consequences of moving to the Shell Smart scheme. 

Shell comment “We are strongly contesting Don Marketing’s claims and litigation is pending. There has been a considerable amount of open comment on this matter. Shell believes it is not appropriate to discuss in public matters that should be resolved in court.”

SMART partner extension goes ahead

Shell is going ahead with extending its Smart card loyalty scheme, despite it being the subject of a High Court dispute over copyright.

The company has announced that the Smart chip card can now be used to collect or spend points on 25 different brands.

These include Avis Rent A Car, British Gas, British Midland, Commercial Union, First Choice, Hilton Hotels, John Menzies, KLM UK, Le Shuttle, RAC, Shell, UCI Cinemas, Unijet, Vauxhall, Virgin Net and Vision Express.

Customers in Scotland only can also collect and spend SMART points at Dixons, Currys, The Link and Victoria Wine.

Gary Anderton, SMART manager said: “Many loyalty programmes know the next big step is to start creating a multi-company ‘currency’ - and we’ve pulled it off. Research has shown that people want to collect points on more of their purchases, have a greater choice of reward and use a single card.

Customers also want their privacy respected and do not want to be deluged with unwanted mail, so we have promised that too.”

SMART first launched as the Shell loyalty scheme in October 1994. It gained much publicity as the first nationwide smart card in the UK, where it now has 4 million cardholders. Last year it became the first loyalty scheme to offer points on the Web. Card holders have to click on flashing credits scattered around the websites of seven SMART member companies.

May/June 1998

Original Article

http://www.shellnews.net/PDFs/LoyaltyMagazineMay1998.pdf