Postmedia launches group-buying site with potentially patent-infringing Progressive Discount model

Yesterday Postmedia (formerly Canwest) got into the group-buying game with the launch of SwarmJam.com.

SwarmJam is offering daily deals in all the markets where the Postmedia Network has papers - 36 communities across Canada, including Montreal, Toronto, Ottawa, Calgary, Edmonton and Vancouver.

With dozens of established newspapers and news websites, Postmedia's SwarmJam has a serious advantage over the smaller group-buying sites that just can't compete with Groupon's huge headstart.

SwarmJam is in the perfect position to create a buzz among local shoppers and their parent's large sales force is capable of securing the deals from local vendors.

Similar to Groupon, each day SwarmJam members are emailed a deal which is available for 24 hours. But there is one difference between SwarmJam's model and that of Groupon - and it's a big one that might get them into hot water.

SwarmJam offers both "fixed discount" offers and "progressive discount" offers to their clients. Progressive discounts are described as follows:

Progressive Discount: a SwarmJam exclusive, sees the DailyJam offered at a progressive discount (e.g., 50%, 60% and 70% off) that take effect as you, your friends and more and more SwarmJammers buy. Prices go down as more purchases are made and when the offer closes the number of cumulative purchases determines what price is paid.

This is definitely a differentiator in the group-buying space and you're probably wondering why nobody has done it before??

Well, that's because the method is patented: On-line group-buying sale with increased value system and method.

In 2000 a patent was filed by bubble-era Mercata and the intellectual property was purchased from Mercata investor Paul Allen in April of this year by Seattle's Tippr.

I predict it won't be long before SwarmJam removes the "progressive discount" option from their site.