Sunday, February 21, 2010

Dominos uses "puffery" against Papa Johns

CBS on "The Amazing Race" on 21 Feb 2010 had an ad by Dominos which had the Fifth Circuit Court of Appeals in the background and noted that when Papa John's was confronted on its better ingredients/better pizza ads, it stated that the ad was "puffery." This would be a defense to a false advertising charge.

Thus, a defense to false advertising becomes advertising for a competitor.

To elaborate a bit on the case, one notes first that the case at the Fifth Circuit Court of Appeals was a Lanham Act complaint by Pizza Hut (not Dominos) against Papa Johns. [ PIZZA HUT, INC. v. PAPA JOHN'S INTERNATIONAL, INC., 227 F.3d 489 (5th Cir. 2000) ]. Second, Pizza Hut actually won a verdict at district court, but lost on appeal to CA5.

Text from the beginning and ending of the decision:

This appeal presents a false advertising claim under section 43(a) of the Lanham Act, resulting in a jury verdict for the plaintiff, Pizza Hut. At the center of this appeal is Papa John's four word slogan "Better Ingredients. Better Pizza."

The appellant, Papa John's International Inc. ("Papa John's"), argues that the slogan "cannot and does not violate the Lanham Act" because it is "not a misrepresentation of fact." The appellee, Pizza Hut, Inc., argues that the slogan, when viewed in the context of Papa John's overall advertising campaign, conveys a false statement of fact actionable under section 43(a) of the Lanham Act. The district court, after evaluating the jury's responses to a series of special interrogatories and denying Papa John's motion for judgment as a matter of law, entered judgment for Pizza Hut stating:

When the 'Better Ingredients. Better Pizza.' slogan is considered in light of the entirety of Papa John's post-May 1997 advertising which violated provisions of the Lanham Act and in the context in which it was juxtaposed with the false and misleading statements contained in Papa John's print and broadcast media advertising, the slogan itself became tainted to the extent that its continued use should be enjoined.


On January 3, 2000, the trial court, based upon the jury's verdict and the evidence presented by the parties in support of injunctive relief and on the issue of damages, entered a Final Judgment and issued a Memorandum Opinion and Order. The court concluded that the "Better Ingredients. Better Pizza." slogan was "consistent with the legal definition of non-actionable puffery" from its introduction in 1995 until May 1997. However, the slogan "became tainted . . . in light of the entirety of Papa John's post-May 1997 advertising." Based on this conclusion, the magistrate judge permanently enjoined Papa John's from "using any slogan in the future that constitutes a recognizable variation of the phrase "Better Ingredients. Better Pizza." or which uses the adjective "Better" to modify the terms "ingredients" and/or "pizza."


In sum, we hold that the slogan "Better Ingredients. Better Pizza." standing alone is not an objectifiable statement of fact upon which consumers would be justified in relying. Thus, it does not constitute a false or misleading statement of fact actionable under section 43(a) of the Lanham Act.

Additionally, while the slogan, when appearing in the context of some of the post-May 1997 comparative advertising--specifically, the sauce and dough campaigns--was given objectifiable meaning and thus became misleading and actionable, Pizza Hut has failed to adduce sufficient evidence establishing that the misleading facts conveyed by the slogan were material to the consumers to which it was directed. Thus, Pizza Hut failed to produce evidence of a Lanham Act violation, and the district court erred in denying Papa John's motion for judgment as a matter of law.

A law professors blog,contractsprof blog , analyzed the complaint of Pizza Hut in terms of contract law:

As to the puffing, our colleagues on the contracts professors' Listserv have pointed out that, although the case is brought under the Lanham Act and so is not a contracts dispute, its discussion of puffery could very well apply in the context of disputes over warranties and contractual misrepresentation claims.

One notes that the Lanham Act is designed to protect consumers, not parties to a contract. The issue in the Pizza Hut case was whether Papa John's presented misleading facts within the advertised slogan that were material to the consumers to which it was directed. The issue was not whether or not the pizza was fit for the purpose of being eaten as a pizza. Clearly it was. Somebody who bought a Papa John's pizza got an edible pizza. This is not an implied warranty case. But, under the Lanham Act, one cannot make false statements of fact to mislead a consumer of the product.

See also

More on Pizza and Puffery

And note the post Domino’s Pizza Ad Addresses Puffery which notes a connection to Enron:

I admit, it’s a little strange that I’m writing about pizza, particularly such awful pizza, on a blog about Enron. But a new ad by Dominos actually has a legal component which relates to Enron. In the ad, Domino’s “head chef” is standing in front of the John Minor Wisdom Court House in New Orleans — that’s the 5th Circuit Court of Appeals where Jeff Skilling’s appeal and many others from the Enron cases were heard, including Broadband, Nigerian Barges, and NatWest Three. The “head chef” says that they (Domino’s) challenged the Papa John’s slogan in court, and Papa John’s stated that their slogan was “puffery.”

On the Enron connection, IPBiz notes that one fellow backing up the pro-global warming forces in the ClimateGate debate was a consultant to Enron. And, earlier, Mr. Wegner talked about Enron-esque bookkeeping by the USPTO in the patent grant rate debate, even though it was Quillen et al. who were putting forth Enron-esque numbers [eg 97% allowance rate!]


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