Sour Daugh: Pizza Hut v. Papa John'sBrandweek, May 21, 2001 by Jim EdwardsMESSAGE FROM ASSOC. PROF. PAMELA S. EVERS, ATTORNEY AT LAWThis article has been offered by web posting to UNCW students for educational purposes only. Articles posted may have been edited for clarity and format by Pamela S. Evers. Sour Daugh: Pizza Hut v. Papa John'sBrandweek, May 21, 2001 by Jim Edwards How risky is comparative advertising? Consider what happened when two pizza giants went to court over increasingly puffed-up claims about each other's products.In the spring of 1997, Pizza Hut's then-president David Novak stood on the deck of a World War II aircraft carrier and declared "war" on "skimpy low-quality pizza." The act was filmed as a TV commercial by BBDO, New York, in which viewers were dared to find a better pizza than Pizza Hut's-a pretty unremarkable ad in a category that, historically has been littered with over-the-top ad strategies.At the time, Novak probably did not imagine that his publicity stunt would become the genesis of a nearly three-year legal fight that ultimately ended up in the U.S. Supreme Court. The dispute, which came to a conclusion on March 19, ran up lawyers' bills in the millions, exposed the often unappetizing ways in which Pizza Hut's pizzas are prepared and made the company the butt of newspaper editorial jokes across the nation. Even worse, it became a distraction at a time when Pizza Hut's business needed serious attention to revive flagging sales and a stagnant store-building program.For marketers, settling an advertising war in the courts poses some serious risks." You don't wantto lose control of the information you send out to people about your brand," said John Allen, senior partner at consultancy Lippincott & Margulies, New York." A lawsuit is definitely the last resort.""The whole issue here in this case is one that's of no interest to consumers," added John Grace, executive director of consultancy Interbrand, New York. "Great brands are not built on the functional promises of ingredients. And pizza consumers don't want to know."Indeed, the case may be looked at as a cautionary tale: it formed a textbook example of how not to go about challenging consumers to compare your rivals' products.Oddly, though, it still handed Pizza Hut something of a backdoor victory Here's how it happened.Perhaps predictably Novak's war cry was immediately answered by Pizza Hut's hated rival, Papa John's pizza. (The two have corporate headquarters based uncomfortably close to each other, in Louisville, Ky.) For two years, Papa John's marketing slogan had been, "Better Ingredients. Better Pizza." The same month as Novak's ad first ran, the smaller chain aired a retaliatory spot in which Pizza Hut founder Frank Carney-who sold Pizza Hut in 1977 to PepsiCo and thenjoined Papa John's as a franchisee in the 1980s--appeared at a fictional Pizza Hut conference to declare, "I found a better pizza!," meaning Papa John's.Sensing blood in the water, Papa John's upped the ante considerably in 1998 with a series of ads via Fricks/Firestone, Atlanta, skewering Pizza Hut in an illustration of just why the smaller chainbelieved that better ingredients do indeed make better pizza.One memorable spot showed Papa John's CEO John Schnatter describing how Papa John's doughwas made with "clear, filtered water" and yeast that was given "several days to work its magic." The dough was contrasted with that of "the biggest chain" (that's Pizza Hut, incidentally), which it said uses "whatever comes out of the tap" to make "frozen dough or dough made the same day." The description was accompanied by the image of a back-of-the-house cleanup area, wherea grungy youth in a tie-dyed T shirt was washing an even grungier pile of dishes as a faucet dripped water into the sink.Pizza Hut, of course, did not take the assault lying down. The company responded with what its top lawyer,svp/genearal counsel Bob Millen, described as a "corrective" ad on the dough issue. The commercial used a snippet of the Papa John's ad in which "John Schnatter was saying, 'We'd never use dough the same day.'" The intent of the ad was to alert consumers to the fact that Papa John's "make[s] their dough in regional dough factories, kind of like Wonder Bread is made," said Millen.In August 1998, after getting no sympathy at the National Advertising Division of the Better Business Bureau, Pizza Hut accompanied its "corrective" campaign with a lawsuit in Dallas Federal District Court, claiming that much of Papa John's advertising was false and misleading. The suit was heard in November 1999. Part of the case revolved around differences in the way the two chains prepare their tomato sauce. Pizza Hut's is cooked and then bagged before water is added at the restaurant, whereas Papa John's is canned before being reheated. Neither method sounded too pleasant.As Millen recalled, the testimony bordered on the comical. At one point, a scientist was brought in by Pizza Hut to testify that both sauces in fact taste identical. The fresh taste of the sauce, as it turned out, was not produced by the freshness of the product (both sauces sit around for weeks before they even see a pizza) but by a naturally occurring amino acid that produces a "fresh" sensation on the tongue. "That, quite frankly, astonished me," Millen said. "They actually had a science around this!"The jury ruled in favor of Pizza Hut, as the ingredient comparisons were deemed misleading. Thejudge admonished both sides for the dubious nature of their advertising, but to Pizza Hut's delight, ordered an injunction on Papa John's entire "Better Ingredients. Better Pizza" marketing blitz--pizza boxes, car toppers, menus, hats, ads and all.The Appeal: 'Puffery' and Other Inflated ChargesPapa John's appealed to the 5th Circuit Court of Appeals in January 2000, complaining that the judge had simply gotten the law wrong. Truth in advertising is codified partly in a body of lawsthat define "puffery" and "puffing." In laymen's terms, puffing is the act of making commercial statements so vague, ridiculous, outrageous or opinionated that they could not possibly be taken seriously by consumers. "Better Ingredients. Better Pizza" fit this definition perfectly, Papa John's argued. If it did not, then BMW would also find itself in court being asked to prove that their cars really were ultimate driving machines, and Visa would be forced to prove that its cards really are accepted everywhere you want
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