Pizza slogan slugfest raises free-speech questions for advertisers

Tuesday, February 8, 2000

The legal battle between leading pizza chains Pizza Hut and Papa John’s has advertising experts wondering where the courts will draw the line between protected “puffery” — exaggerated praise — and unprotected false speech.

In August 1998, Pizza Hut sued Papa John’s in federal court, claiming that Papa John’s “engaged in a systematic campaign of consumer deception” in its marketing. Pizza Hut took aim at Papa John’s slogan “Better ingredients, better pizza.”

Papa John’s countersued, claiming that certain Pizza Hut ads were also false and misleading.

In November 1999, a jury determined that Papa John’s had engaged in false and misleading speech in violation of federal law. The jury also determined that Pizza Hut had engaged in false and misleading speech in two of its own ads.

After the jury decided the question of whether the pizza chains had violated federal law with their ads, a federal magistrate awarded damages. Judge William Sanderson awarded Pizza Hut more than $400,000 in damages and ordered Papa John’s to quit using the slogan “Better Ingredients, Better Pizza.”

Papa John’s appealed the ruling to the 5th U.S. Circuit Court of Appeals, which issued an emergency stay of the decision on Jan. 21 pending a chance to hear arguments in the case.

Now Papa John’s has asked the U.S. Patent and Trademark Office to reject Pizza Hut’s trademark application, contending the slogan “The Best Pizzas Under One Roof” is “deceptively misdescriptive” under federal law.

Daniel Jaffe, executive vice president of the Association of National Advertisers, says his organization is closely watching the battle between the pizza companies.

“The issue has always been, when does puffery end and specific claims that have to be supported by specific data begin,” Jaffe said. “Puffery is accepted and is protected speech.

“However, if a company makes specific claims that its product is superior to another, then it must stand behind those claims with some type of evidence or data,” he said.

The federal law that Papa John’s was found to have violated is Section 43(a) of the Lanham Act, which prohibits the making of “false or misleading description of fact … in commercial advertising or promotion.”

The law provides that a person who in commercial advertising “misrepresents the nature, characteristics, qualities or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.”

Sanderson cited the Lanham Act in his opinion: “The Lanham Act does not prohibit a seller from fairly and truthfully expounding upon the characteristics and properties of its own products in its promotional advertising. However, when a seller chooses to engage in advertising, which compares its products to products of its competitors, it is unlawful to make false comparisons and to engage in advertising which misleads ordinarily prudent consumers into believing unfounded claims of superiority.

“But whenever a seller disseminates false or misleading advertising to the consuming public, consumers’ ability to exercise independent purchasing decisions based on truthful comparisons is compromised and distorted,” Sanderson wrote.

Determining what is false and misleading speech in advertising is not easy, particularly when companies make superlative statements about their own products.

Jeff Edelstein, a New York-based attorney for Papa John’s who specializes in advertising and marketing law, says the slogan “Better Ingredients, Better Pizza” is puffery that should be protected by the First Amendment.

“Slogans and taglines have normally been considered as puffery that the reasonable consumer does not take seriously,” Edelstein said. “These slogans and taglines are often not measurable or verifiable. Many companies run ads with slogans that say their product is the ‘best,’ the ‘ultimate’ or ‘better.’”

However, Thomas Morrison, New York-based attorney for Pizza Hut, says the Papa John’s ads cross beyond puffery. “The fallacy of Papa John’s argument is that they just look at the four words ‘Better Ingredients, Better Pizza.’ If you look at just the four words, it is debatable whether they are puffery or not.

“However, the real way to examine whether this is puffery or not is to determine how the words are used in the commercial context,” Morrison said. “We put before the jury two years of Papa John’s print and television ads in which they used those four words in a way that was not puffery. They used the four words to convey specific messages about the way the ingredients of their pizza was better than their competitors.”

Morrison says that Sanderson’s decision shouldn’t affect advertising law that much, because “the ruling is consistent with over 20 years of advertising law. Competitors sue each other all the time; this does not break any new legal ground.”

However, Edelstein called the Jan. 3 decision a “terrible precedent that, if upheld, will have a chilling effect on advertising and that will infringe on free speech.”

“I really hope this decision is overturned,” he said. “It is truly a bad decision.”