If you haven’t seen it yet, there’s an interesting advertising dispute brewing between Quiznos and Subway sandwich shops. It seems Quiznos invited the public to submit homemade videos in a contest intended to target its rival, Subway. The contest rules stated that video submissions were meant to draw “a comparison between Quiznos and Subway with Quiznos being superior.”
One of the videos showed a Subway sandwich running to a Quiznos store to find more meat. Another showed two submarines looking like sandwiches, with the Subway submarine being destroyed because it did not have enough meat.
Subway subsequently sued Quiznos, alleging that several of the homemade videos made false claims and depicted its brand in a disparaging manner. In addition, Subway also objected to ads that Quiznos itself created, showing people on the street choosing Quiznos over Subway. The legal question here is because Quiznos did not create the submissions, so should it be held liable for user-generated content created on its behalf?
From a claim substantiation standpoint (assuming that the “more meat” claim is one of the false statements), I wouldn’t want to be the attorney representing Quiznos in this one. You see, knowledge is a dangerous thing. In my opinion, once an advertiser is made aware that claims are being disseminated in the marketplace without the prerequisite underlying support, the advertiser is responsible and must exercise a reasonable effort to remove the videos/ads from circulation. As Richard Leighton, a partner at Keller and Heckman who specializes in advertising and trademark law noted in a New York Times article: “It’s not like Quiznos said, ‘Do any interesting video you can.’ They provoked it, instigated it, so it may be that the consumers, in this case, are effectively their agents.”
The contest, called the “Quiznos vs. Subway TV Ad Challenge,” was held in the fall of 2006. About 115 videos were submitted by consumers, and all were viewed by Quiznos or iFilm before they were posted to the meatnomeat.com site, which has since been taken down. Some consumers also posted their videos on YouTube, and those videos remain there. It should be noted that Quiznos was already aggressively comparing the meatiness of its sandwiches with Subway’s in its professionally made ads—which are also part of the suit—when the contest was announced.
The winning video showed two young men racing down a hill in wagons. The Quiznos vehicle is shaped like a meaty sandwich, and its driver blasts the plain-looking Subway car with smoke, causing it to topple over in defeat. Its creators won $10,000, and their video was shown on VH1 and on a giant screen in Times Square on New Year’s Eve 2006.
From a strictly legal perspective, the case will hinge on how the district court interprets two federal laws: the Lanham Act, which dates to the 1940s and centers on trademark rights, and the Communications Decency Act, which was passed in 1996 to safeguard the Internet. Quiznos has argued that they should not be liable for user-generated content because of the Communications Decency Act, which immunizes “providers” of “interactive computer services” from responsibility for user postings on their sites. That may be true, but in this case, Quiznos overtly reached out to consumers and basically said, “Create a situation showing our superiority to Subway.” Consumers then found a comparative attribute (e.g., the amount of meat in the sandwiches) and ran with it. Hmmmm…. Vicarious liability anyone?
Ronald Y. Rothstein, a partner at Winston & Strawn, represents Quiznos and says the consumer videos should not cause concern under the Lanham Act because that law requires an element of deception in the ad, and, he says, “there can’t be an element of deception if everyone knows the videos were created by consumers for the sake of entering a contest.” However, as with other forms of viral marketing, participation in a promotion comes with certain limitations regarding the parameters of truthful expression.
Although some pundits are worried that a ruling in favor of Subway could signal the death of comparative advertising as we know it, I wouldn’t be too worried. This country was founded on good, healthy competitive advertising claims. So long as an advertiser has a reasonable basis to support its claims (and don’t unnecessarily disparage its foe) all is fair in love and war…at least that’s what Section 5 of the FTC Act says.
One last thing: The case is scheduled to go to trial in federal district court in Connecticut in 2009. This is where advertising self-regulation could have helped. Had this been a direct response advertisement and the case brought to the Electronic Retailing Self Regulation Program (“ERSP”), we would have resolved the claim substantiation issue by the summertime. And that’s a claim I’m confident I could support.
Peter Marinello works for the National Advertising Review Council and spearheads ERSP.
Tags: communications decency act, electronic retailing self regulation program, ERA, ERSP, ftc, lanham act, peter marinello, quiznos, subway