Marketing Week: High Court action by promotional agency Don Marketing could delay national roll-out of scheme (16/04/98)

By Tom O'Sullivan

16 April 1998,

Shell is being sued for allegedly breaching copyright on the concept idea it used to create its Shell Smart Card loyalty programme.

The legal row could further delay the national roll-out of the scheme. It has been tested in Scotland for the past 12 months and was to have been introduced nationally at the end of last year. However, it was delayed because the ten partners in the scheme, including Dixons, the RAC and Commercial Union, could not agree on a launch date.

The High Court writ was issued last Thursday by the promotional agency Don Marketing. It alleges that the agency first offered the idea for a "multibrand" loyalty scheme to the oil company at a confidential meeting between the agency and Shell on October 23 1989.

The idea was further discussed in a letter dated July 24 1990 but at that stage Shell said that it did not want to pursue the Don Marketing concept.

The writ also reveals that Don Marketing had approached both Sainsbury's and Tesco, among other potential partners, to join a multibrand scheme with Shell in early 1990. Sainsbury's was an initial member of the Shell Smart Card consortium in 1996 but is not part of the Scottish trial.

The writ says Don Marketing developed the scheme on the basis of attracting market leaders from different sectors as partners.

Don Marketing managing director John Donovan has been in talks with Shell for the past 12 months. "It was not obviously our scheme until Shell launched its trial in Scotland," says Donovan, "that is when we realised it was our scheme."

Shell denies the legal action will affect the national roll-out. "The claim has been most comprehensively investigated and discussed in correspondence with Mr Donovan," says a Shell spokeswoman. "Shell is satisfied that it is completely without substance. We now intend to defend vigorously Mr Donovan's claims in court."

Don Marketing is claiming multimillion pound damages. Its writ demands an injunction to prevent Shell using the scheme, an admission that the agency's confidential information was "misused" and that all promotional material credits Don Marketing with originating the scheme.

This legal case is the latest in a series of spats between Shell and Don Marketing. All have been settled out of court with the settlements remaining confidential.

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