Can a Commonly Used Marketing Strategy Be Anybody's Intellectual Property

I own an IT product that I I have developed to launch in multiple local markets within my state. The marketing strategy for this requires local partnerships for sales and marketing with local networks and media companies, who already have an existing sales and marketing presence in their respective markets. I hired a local company for the first launch in one segment of the market, and the company proposed to me that they would like to take this product nationally, using the above mentioned strategy and their own connections in media sources. However after some discussion I found out that the company was expecting payments, % stake in my product, and was trying to recruit investors to indirectly pay their company for multiple services and resources, in the name of launching my product nationally. I quickly cancelled any further discussion and requested that they continue their sales and marketing efforts in their local markets, and that I would continue with my launch efforts by myself in other markets.

Now they are claiming that they spent $30,000 worth of time and resources in coming up with a national marketing strategy (False claim, as they were just elaborating my initial marketing plan for our state, and making grandiose claims for it). They are claiming that I cannot expand my product to any other local markets even within our state now, as it was a part of their strategy (wrongful claim), and that it( the marketing strategy through partnerships with local media companies) was now their intellectual property.

The only agreement that I have with this company is for marketing and sales of the services from my IT product for their local market, in return of a % from sales revenue generated by them. I never signed or agreed to any other grandiose ideas that they presented, although I did give them an option at one time, that I would be conducive to those ideas, if they either shared in the financial development of the product and its complete marketing, or bought the technology from me. They declined on both fronts, so I stopped all discussion on broadening my product nationally, through their help.

They have done very little if any for sales and marketing efforts even within their local market. Most of the sales have been freebies, that they argued were necessary to get people hooked. Marketing efforts have been negligible if any, and limited to free fb shares etc. They are also extremely tardy in sending me required information for updating my product with client services, and do not respond to my communications properly.

I would like to continue with taking this product to other local markets within my state, using my original plan. Many other companies use local newspapers and media companies as partners to promote sales and marketing for their products. This is not a new or unique idea, and yet this company is now threatening me that any such move on my part will be considered a breach of their intellectual property. Do they really have grounds for such litigation? I have no written agreements with them about any marketing strategy, and rather, I have copies of their proposed budgets, and other communications with them, which clearly outline that I did offer them a stake in my product, in return of a financial investment on their part, which they declined. The budget that the proposed, of which I have a copy, also clearly shows that they were proposing to request investor capitol, out of which more than 50% they planned on using to pay their own salaries, in-directs to their company etc, and finally, they were automatically trying to assume a % stake for 3 partners from their company, in my product, if they were to carry on with their proposed plan.

In short, their proposal was that I continue developing my product at my own time and expense, that they would get an investor, in return of a 10% stake in my product given to the investor, that 3 people from their company would have 15% stake each in my product, and more than 50% of the investor capital would be used to pay their salaries, equipment for them, rent for their offices, marketing costs through their company etc. Their role would be to use their marketing connections to try to take my product national. No guarantees, no personal guarantee to the investor, no time-lines.

This was not acceptable to me on an ethical or a professional level, so I hope that you will see why I declined to continue with this plan.

Your obligations to the company are first and foremost a matter of contract. We have no access to your contracts with this company. In the face of a $30K claim, you should have them reviewed by your business lawyer.

We don't know the extent to which the marketing strategy at issue is proprietary, but even assuming it is not you may have contractually obligated yourself to pay for it through your dealings with the company.

Thank you for the response. Somehow, I was not notified of this reply having been posted. I understand what you are saying. Fortunately, I have not signed any contractual agreements beyond a 50-50 split on sales revenue in the initial launch market. Moreover, I have email and chat transcripts proving at every stage, what was being agreed to, and what was not. I will seek the help of a professional Business lawyer, if this escalates, and I am confident in the Justice System and my honesty, so I have nothing to fear. I will not let others bully me like this by proposing misleading deals and then threatening me with consequences, because I refuse to fall bait. In fact I have enough evidence to suggest that they did next to nothing for their share of the initial marketing and sales effort, costing me and my product to suffer, but I will not initiate any aggression. Thank you again.

They were trying to scam you and are still trying to.

There is no contract for what they are claiming. In any case, for any contract to be enforcable, there must be good and valuable consideration. They can't prove any consideration that they alleged provided. There are also contracts that are contrary to public policy that can't be enforced.

What they wanted to do was steal your idea, give chunks of it to thier own people and bring in an outside investor (to pay all of them, not you) and give that person a chunk too, on a mere promise that they had connections to market your product.

I have seen this and many variations. For example, I formed a corporation but didn't have control. There was a board of directors. Some used car salesman (literally) wanted to invest but with some strings of course. He wanted a position with a salary that would eat up his entire investment within 5 months. We would have then been on the hook to him in salary and stock. We were many many months away from having anything to sell. They were all set to swallow this con job. I made a motion to record board meetings, which was approved. I hauled out the recording equipment, set it up, and then read them the flipping riot act. That put an end to that.

I would not do any business with that firm, unless you have no choice by an existing contract.

They have nothing over you. It is a con. They own no intellectual property that can affect you. Technically one can get a business method patent, but that wouldn't work here and it would take five years or so, assuming it could issue.

Trying to sue you from another state would cost a fortune and any decent lawyer would get the case thrown out in a heartbeat.

I hope you are fully protected with a filed copyright and a trademark registration on the name. As I said in another thread, state trademarks are also very useful. Names, titles and the like are NOT protected by copyright.

A movie or television show is protected by copyright, but any real studio is going to have one or more trademarks registered on the title/name. Trademarks are registered in classes of goods and services and more than one can apply, so each is a separate registration fee.