A Toppers Pizza ad features a Domino's truck, and Domino's threatens to sue

Key Points
  • Domino's sends Toppers Pizza a cease-and-desist letter after learning Toppers plans to run ads using its logo.
  • Toppers' founder and CEO Scott Gittrich says he has no intention of scrapping the advertisement.
  • While Toppers' ad does not appear to be grounds for a defamation lawsuit, it could be a trademark infringement if it does not attribute the image to Domino's.
Source: Dominos

A pizza war is cooking, but it's not between two restaurant behemoths.

Domino's and the much smaller Toppers Pizza are squaring off after the pizza giant learned that Toppers plans to run a series of ads using its logo.

During a store opening in Duluth, Minnesota, Toppers revealed its upcoming marketing campaign called "Us vs. Them." The ad in question features a photo that a Toppers staff member took of a Domino's truck delivering dough to one of its stores next to a picture of a Toppers employee carrying a large bag of flour. It is to be distributed in July across all of Toppers' media platforms.

Toppers aims to showcase that its dough is made fresh in-house every day while Domino's dough is shipped in pre-made.

A customer snapped a photo of the ad and sent it to Domino's. A few days later, Toppers received a cease-and-desist order from the company.

"It has recently been brought to our attention that your company's marketing strategies include advertisement that defames our brand and incorporates our registered trademark," Dawn Bushart, a member of Domino's legal department, wrote in the letter, obtained by CNBC.

"The use of the Domino's logo in this fashion is damaging to our brand, unlawful, and an infringement of our federally registered trademark," Bushart wrote.

Toppers' founder and CEO Scott Gittrich said he has no intention of scrapping the advertisement.

"We don't have the hundreds of millions of dollars that our competitors do to rain down TV commercials 10 times during every football game," Gittrich told CNBC. "We have to make our marketing work a little bit harder. We have to say it more directly."

Toppers has 86 locations in 15 states compared with the more than 5,600 locations that Domino's oversees nationwide.

"Our brand voice has always reflected my own voice, which is kind of cocky and straightforward and transparent, and we've always spoken like that to our customers and through our marketing," Gittrich said.

Domino's cease-and-desist letter may not hold up, according to Domenic Romano, founder and managing attorney of Romano Law in New York.

"It's not defamation if it's true," he told CNBC.

Domino's does not make its own dough in its restaurants; instead, it arrives fresh from a warehouse via truck, a former Domino's employee confirmed.

When asked about the matter, a Domino's spokeswoman told CNBC, "It is our company practice not to comment on legal matters."

The Federal Trade Commission allows comparative advertising so long as the company using its competitor's logo does not falsely claim it is affiliated with the other brand and uses the logo with the proper trademark attribution.

This is where Domino's could gain legal advantage. Topper's ad does not include a trademark attribution — a "TM" or an "R" in a circle — or acknowledgment that the logo belongs to Domino's.

"Both sides are wrong here," Romano said.

Gittrich is no stranger to Domino's. He worked for the chain for eight years before starting Toppers in 1991. After working his way up from delivery driver to assisting a franchisee with more than 20 locations, he decided to start his own pizza company, he said.

"I love a fair fight in business," he said. "I think who wins is the customer."