Salesforce.com sues UpShot over advertising claims

The intense rivalry among vendors in the hosted CRM software market has sparked legal action, as San Francisco-based Salesforce.com said Monday it has filed a lawsuit against competitor UpShot alleging false advertising and unfair competition.

The intense rivalry among vendors in the hosted CRM software market has sparked legal action, as San Francisco-based Salesforce.com said Monday it has filed a lawsuit against competitor UpShot alleging false advertising and unfair competition.

Salesforce.com is challenging UpShot’s tagline “The Better Online CRM Solution,” arguing that ads portraying UpShot’s CRM services as superior to Salesforce.com’s are misleading. In a lawsuit filed in the U.S. District Court for the Northern District of California, Saleforce.com is seeking unspecified damages and an injunction blocking UpShot from certain advertising claims, a Salesforce.com spokeswoman said.

UpShot chairman Keith Raffel said the lawsuit is baseless, and that his company is considering all legal options as it formulates a response.

“I think what this comes down to is, Salesforce.com can’t beat us in the market — we haven’t lost a 50-plus-seats deal to them since January — so they’re turning to the courts with bully-boy tactics,” Raffel said. “They’re trying to intimidate us from running truthful ads.”

The two rivals have already brought their conflict before the National Advertising Division (NAD) of the Council of Better Business Bureaus, which offers a dispute resolution system. In a late June case report, NAD determined that UpShot had made unsupported claims about its “leading” market position and “better” products that went beyond general puffery and implied, without sufficient backing, superiority against Salesforce.com. The organization sided with UpShot on several of its more specific claims, such as its contention that medium and large businesses make up a larger percentage of its customer base than Salesforce.com’s.

Since UpShot, based in Mountain View, Calif., is no longer running the specific ads to which Salesforce.com objected, the company considers the matter no longer relevant, it said in a statement included in NAD’s case report.

UpShot is confident it can substantiate any claims made in its advertising about its advantages in comparisons against Salesforce.com, UpShot’s Raffel said.

Salesforce.com is considered by industry analysts to be the market-share leader in the hosted CRM market, with UpShot holding the number-two position. Salesforce.com claims a customer base of 7,000 client companies and 90,000 end users. UpShot declined to disclose its customer numbers.