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Pizza Hut, Inc. v. Papa John's Int'l - 227 F.3d 489 (5th Cir. 2000)

Rule:

Section 43(a) of the Lanham Act, 15 U.S.C. S. § 1125 (a)(1)(B), provides protection against a myriad of deceptive commercial practices, including false advertising or promotion. A prima facie case of false advertising under section 43(a) requires the plaintiff to establish: (1) A false or misleading statement of fact about a product; (2) Such statement either deceived, or had the capacity to deceive a substantial segment of potential consumers; (3) The deception is material, in that it is likely to influence the consumer's purchasing decision; (4) The product is in interstate commerce; and (5) The plaintiff has been or is likely to be injured as a result of the statement at issue. The failure to prove the existence of any element of the prima facie case is fatal to the plaintiff's claim.

Facts:

In 1995, the defendant, Papa John's International Inc., adopted the slogan "Better Ingredients. Better Pizza." In 1996, Papa John's filed for a federal trademark registration for this slogan with the United States Patent & Trademark Office ("PTO"). Its application for registration was ultimately granted by the PTO. Since 1995, Papa John's has invested over $ 300 million building customer goodwill in its trademark. On May 1, 1997, the plaintiff, Pizza Hut, launched its "Totally New Pizza" campaign. This campaign was the culmination of "Operation Lightning Bolt," a nine-month, $ 50 million project in which Pizza Hut declared "war" on poor quality pizza. In early May 1997, Papa John's launched its first national ad campaign. The campaign was directed towards Pizza Hut, and its "Totally New Pizza" campaign. In a pair of TV ads featuring Pizza Hut's co-founder Frank Carney, Carney touted the superiority of Papa John's pizza over Pizza Hut's pizza. The ad campaign was remarkably successful. During May 1997, Papa John's sales increased 11.7 percent over May 1996 sales, while Pizza Hut's sales were down 8 percent. Papa John’s next launched a series of ads touting the results of a taste test in which consumers were asked to compare Papa John’s pizzas and Pizza hut’s pizzas. Following the taste test ads, Papa John’s ran ads comparing specific ingredients used in its pizzas with those used by its "competitors." In the ads, Papa John’s touted the superiority of its sauce and its dough. Consequently, Pizza Hut sued, claiming false advertising in violation of section 43(a)(1)(B) of the Lanham Act. At trial, the jury rendered a verdict for Pizza Hut. Papa John’s thereafter appealed.

Issue:

Is Papa John’s International Inc. guilty of false advertising in violation of section 43(a)(1)(B) of the Lanham Act?

Answer:

No.

Conclusion:

The Court held that Papa John’s 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, the Court ruled that 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; that is to say, there is no evidence demonstrating that the slogan had the tendency to deceive consumers so as to affect their purchasing decisions. Thus, Pizza Hut failed to produce evidence of a Lanham Act violation.

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