Emptoris: Blurring the Legal and Marketing Line

As Spend Matters readers have already pointed out -- thank you Tim Minahan, among others -- the Emptoris legal assault on BIQ is clearly an attempt to blur the legal and marketing line. While I am not privy to any information in this case outside of what is in the public domain, I have been involved in patent litigation in the past when I was at FreeMarkets. What I can say in that case was that the alleged infringements in those situations were much more easy to measure (e.g., FreeMarkets patents covered such areas as dynamic lot extensions such that when a lot went into overtime, it extended the bid-time for the subsequent lots). And perhaps more important, the founders and early technologists at FreeMarkets who supported the filing of patent infringement cases back then did so more for personal and business reasons (e.g., protecting a capability deemed strategic) than for marketing ones. However, I won't deny the sales and marketing impact that suits can have (even if that's a secondary concern for the filing party).

But I believe that Emptoris overstepped a boundary of sorts when it combined the lawsuit announcement with an overt marketing ploy in the back of the press release noting the suit. And I quote for the press release announcing the lawsuit: "The Emptoris Spend Analysis Solution has received independent recognition for being the premier spend solution the market. In the November 2005, in a report entitled "The Forrester Wave(TM): eSourcing Suites, Q4 2005," Forrester gave Emptoris a perfect score and the top ranking for its current spend analysis product offering ... Emptoris further noted that the company invests more than a third of its revenues back into software research and development which has resulted in the company's leadership in the spend analysis, sourcing and contract management software markets. During the third quarter of 2006, Emptoris experienced its strongest quarterly performance ever with 86% revenue growth over the third quarter of 2005. During the first three quarters of 2006 Emptoris experienced revenue growth of 78% compared to the first three quarters of 2005."

If Emptoris truly believes that BIQ is infringing on its intellectual property, among other accusations, that's one thing. But to aggressively intermingle overt marketing with a lawsuit in a single press release is a low blow, and it's one that I can't condone. Moreover, I believe that it comes off as being on the defensive to have to pound one's chest about third party awards and growth as part of a legal battle against such a small single entity. If this lawsuit becomes a PR battle as a result of Emptoris' commingling of the legal and marketing fronts, I'd have to wager that their efforts will ultimately backfire, regardless of how the suit turns out. After all, no one wants to do business with a bully, and there's a lot of kids on this playground to choose from.

Jason Busch

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