Today's Customer Feedback - Tomorrow's Claim?
How to Handle Customer and Third-Party Idea Submissions
Companies often invite customer feedback as a "relationship" marketing tool to build a loyal customer base. In most cases, the feedback is welcome and even useful - customers feel their opinions are valued and the company learns what will make them willing to spend more money.
Feedback - whether solicited or unsolicited - from customers or third parties (referred to as contributors) can sometimes prove troublesome, however. Contributors who come up with ideas for games, tools, software or other products often have unrealistic expectations about the value or uniqueness of their ideas. The legal risk is that contributors may believe, based on something you have said or done, that they have a binding agreement with you and are thus entitled to payment, royalties, acknowledgment, or some other return for their ideas. Actions, statements, and patterns of conduct - even from different people in your company - may be brought together to form an alleged contract. While this risk is very low, it's important to remember that a contract does not need to be in writing to be enforceable. Additionally, if contributors claim a copyright or patent right in an idea, they may be able to enjoin you from using their idea in a product you are already marketing.
Many companies deal with these problems by rejecting all idea submissions. However, if your company would like to encourage idea submissions, you need to be aware of potential concerns and the best way to respond to ideas submitted to your company.
Some Submission Concerns
Value of Ideas
As noted above, most contributors who submit "ideas" do not have a realistic understanding of the value, unique nature, or possible use of their ideas. Try to dispel unrealistic expectations and make it clear that you rely on your own staff of experts to provide new ideas.
Ownership of Submissions
Ensure that contributors "assign" ownership of all rights in their submissions to your company, forever and for all mediums, and that you have the right to use it - or not use it - and even to assign it to, or allow its use by, others. You will want this language to be as broadly inclusive as possible.
In addition to making it clear that contributors will not be paid for submissions, also state that no acknowledgement of any contributors will be made. If you do want the right to use contributors' names, you need to obtain their consent.
Various Types of Submissions
If you have an open-door submissions policy, anticipate that contributors will submit a variety of materials. You should ensure that any submission - whether it is an idea, a comment, or even a physical product - is covered by your idea submissions policy.
Review of Submissions
Depending on the number of submissions you receive and the nature of your screening process, you may find you cannot review all submissions because of limited time or resources. Therefore, do not suggest that every submission will be given to someone who will consider it or that contributors will be contacted again.
Confidential Relationship Between Company and Contributor
Avoid making any statement or suggestion that a submission will be held in confidence. You may wish to explain that any submission may be given to a development team once it has been received. You should assume, and make contributors aware, that any submission is yours once you receive it.
Some submissions may come from minors. To ensure the enforceability of their agreement to transfer rights in their ideas to you, you must obtain the consent or acknowledgement of a parent or guardian.
Some Submission Solutions
One approach to the problem of balancing a brief and friendly response with the need for a clear and comprehensive policy is to have a "submissions policy" posted on a Web site that contributors can access. The submissions policy can be more comprehensive (and more legal in tone) than a typical consumer service representative response. The policy should address the issues noted above and indicate that all submissions are subject to the policy. In addition, when customer service representatives receive an unsolicited inquiry or submission, they can direct contributors to the submissions policy on the Web site or mail a hard copy of the policy to each contributor.
Click-Through Submissions Agreement
One step beyond merely directing contributors to your online submissions policy is using a click-through type of agreement as the only means to allow contributors to make submissions. After reading the submissions policy, contributors are asked to "Accept" or "Reject" the policy. Upon acceptance, they go to an input screen where they could type in their idea or question and transmit it directly. If they select "Reject," they are advised that your company cannot accept their idea submission.
One additional solution is to establish procedures to accept third-party idea submissions from contributors who expect either (1) compensation or (2) no compensation. These alternate procedures can be easily put on a Web site and, if contributors find the policies and practices acceptable, their ideas can be submitted.
For example, a contributor electing to submit an idea for compensation would find on the company Web site a page directed toward this type of submission. Before a submission form on the page could be filled out, however, the contributor would be expected to read through a policy directed toward submissions for compensation and asked to "accept" the terms of the policy. After accepting the agreement, the contributor would be directed to complete a form for submitting an idea. This same format could also be used for idea submissions where no compensation is expected.
As another solution, a company clerk could be assigned to return each contributor's submission with a letter that includes a copy of the company's submissions policy. The letter should state that no copies have been made of the submission, and it should also inform contributors that they can resubmit their ideas if they agree with the company submissions policy and sign a form evidencing their agreement.
A further solution is the use of other agreements to cover idea submissions. For example, employee and contractor agreements can - and should - address submissions. In addition, if your company has exclusive memberships, such as clubs for frequent customers, the membership agreements should include the terms of the submissions policy.
While an overview of concerns and possible solutions for dealing with customer and third-party idea submissions may be generally useful, the situation for each company is unique. If you are interested in a more tailored solution for your company, please contact your client service attorney at Perkins Coie.
This paper is intended to provide general information as a service to our clients and should not be construed as legal advice or opinions on specific facts.