Can a Sandwich Be Slandered?

Some companies have made a sport of using advertising to bash a competing brand: Pepsi and Coke, Colgate and Crest, Miller Lite and Bud Light.

It was a rivalry of this sort that compelled Quiznos, the toasted-sandwich chain, to invite the public to submit homemade commercials in a contest intended to attack a top rival, Subway. The contest rules made it clear that the videos should depict Quiznos sandwiches as “superior” to Subway’s.

Subway promptly sued Quiznos and iFilm, the Web site owned by Viacom that ran the contest, saying that many of the homemade videos made false claims and depicted its brand in a derogatory way. Subway is also objecting to ads that Quiznos itself created, showing people on the street choosing Quiznos over Subway.

The dispute over an ad is fairly standard — companies often sue one another over advertising claims — but the video contest raises a novel legal question: Quiznos did not make the insulting submissions, so should it be held liable for user-generated content created at its behest?

If the answer is yes, that could bring a quick death to these popular contests, advertising executives say. Consumer brands like Doritos, Dove, Toyota and Heinz have run promotions of this sort because they generate publicity, usually at a low cost to the advertiser, and sometimes lead to clever spots that work well on television. But the Subway lawsuit, which seeks financial and punitive damages, seems to open a Pandora’s box.

“Let’s just hope that as collateral damage it doesn’t kill the entire genre of competitive advertising,” said Brad Brinegar, chief executive of McKinney, an ad agency in Durham, N.C., that does not work with Subway or Quiznos.

In its lawsuit, Subway contends that the consumer videos — which were posted at a site Quiznos had set up called meatnomeat.com, as well as on iFilm — contained “literally false statements” and depicted Subway in a “disparaging manner.”

Subway asserts that “the contest rules, the promotion of the contest on the Quiznos meatnomeat.com and iFilm Web sites, and the use of the videos were all part of an organized campaign to penetrate the market in which Quiznos and Subway compete.”

The case is scheduled to go to trial in federal district court in Connecticut in 2009. The plaintiff is Doctor’s Associates, the franchiser of Subway, and the defendants are iFilm and QIP Holder, a subsidiary of the Quiznos parent company that owns the Quiznos trademark.

Subway and iFilm declined to comment for this article. A lawyer representing Quiznos said the company had no involvement in the creative aspects of the consumer videos.

“We’re just facilitating consumers who go out and create their own expression in the form of a commercial,” said Ronald Y. Rothstein, a partner at Winston & Strawn, on behalf Quiznos.

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 of their own accord, and those videos remain there.

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 in 2006.

But 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. According to the rules, 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 fashioned as sandwiches, with the one representing Subway being obliterated because it did not have enough meat, according to the suit.

Among the videos that can still be seen on YouTube, one shows a wife arriving home with a Quiznos sandwich for her husband and a Subway sandwich for her dog. In another, a young man runs through town to find a sandwich, passing by seven Subway stores before he reaches a Quiznos and goes in. In a third, two men punt sandwiches across a parking lot; the Subway one soars high but the Quiznos one is so heavy that the man falls over when he kicks it.

From a corporate perspective, one of the attractions of these contests is that the general population has more leeway to make videos that cross into murky territory. Consumer ads are sometimes offensive and crude, and they often exaggerate the benefits of the products made by the company that dangles the prize money. The sponsor can try to distance itself from the provocative content, while at the same time benefiting from the attention the videos draw to the brand.

The Subway/Quiznos case hinges on how the District Court of Connecticut 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. If Subway wins, advertisers and media companies may find themselves liable for false advertising claims made by consumers who participate in their contests.

Last spring, Quiznos and iFilm tried to claim 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 provision protects YouTube, for example, from liability for consumer videos on its site and AOL for comments in its chat rooms. But it is not clear whether Quiznos was an uninvolved provider along the lines of a YouTube or AOL. The judge in the Quiznos case ruled she could not dismiss the case simply because of that law’s immunity.

“It’s not like Quiznos said, ‘Do any interesting video you can,’ ” said Richard J. Leighton, a partner at Keller and Heckman who specializes in advertising and trademark law. “They provoked it, instigated it, so it may be that the consumers, in this case, are effectively their agents.”

The main legal tangle the court will evaluate is whether advertisers are exempt from the Communications Decency Act and, therefore, not entitled to the immunity that law provides to parties that present user-created content.

Subway is arguing that advertising claims are not covered by such immunity because the law explicitly says that it does not apply to intellectual property. And the catch is that intellectual property is governed by the same law that governs false advertising claims, the Lanham Act.

Quiznos responds that advertisers should not lose their immunity under the Communications Decency Act, just because advertising claims are part of the Lanham Act.

Also, Mr. Rothstein, the lawyer for Quiznos, said the consumer videos should not cause concern under the Lanham Act anyway because that law requires there to be an element of deception in the ad, and, he said, “there can’t be an element of deception if everyone knows the videos were created by consumers for the sake of entering a contest.”

Still, a win for Subway would mean that user-generated advertising contests would have to play by new rules. The sponsors of such contests could find themselves in trouble if participants insulted a competitor or made unsubstantiated claims about products, said Sam Bayard, assistant director of the Citizen Media Law Project.

Bill Blackburn, a 29-year-old who submitted a video to the Quiznos contest, said it was clear to him what Quiznos had wanted.

“You were supposed to show why Subway was the lesser of the two subs, and the whole point of it was to show a Quiznos sub dominating a Subway sub,” said Mr. Blackburn, who makes ads in Lexington, Ky., and has participated in several national ad contests. In his video, he dropped Quiznos and Subway sandwiches onto the ground, and it was Subway’s that needed “medical attention,” as he termed it.

“Quiznos led you to believe it was O.K. to do it,” Mr. Blackburn said. “It’s like mudslinging, in a sense. Like politicians slinging mud back and forth at each other. I took it that it was all fair in business.”