As part of Quiznos’ advertising campaign, it paired with iFilm to create a web-based contest called the “Quiznos v. Subway TV Ad Challenge.”The contest, which was accessible by logging onto www.meatnomeat.com solicited contestants to create a video demonstrating “why you think Quiznos is better.”Quiznos posted their sample videos and user-generated contestant videos on the website. Subway contends that Quiznos made false representations in the sample videos and user-generated videos.
Quiznos argued that they were not liable for the content in either sample videos or contestant videos, because the videos did not qualify as “commercial advertising or promotion” under the Lanham Act. The Second Circuit adopted a three-pronged test: (1) “commercial speech; (2) made for the purpose of influencing others to buy defendant’s goods or services;” and, (3) “representations less formal than those made as part of a classic advertising campaign may suffice, [but] they must be disseminated sufficiently to the relevant purchasing public.” Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 314 F.3d 48, 56 (2d. Cir. 2002). Quiznos argued that the videos did not constitute “commercial advertising or promotion,” because they were not widely disseminated. Quiznos contended that only a narrow range of viewers would visit the contest website and view the contents of the videos. The court rejected Quiznos argument and found that by posting videos on a website, available to anyone with internet access, Quiznos widely disseminated the videos.
In any event, Quiznos argued, they were insulated from liability because the statements made in the videos were made by the users, not Quiznos. Quiznos argued that they were merely publishers of the user-generated videos, under Section 230 of the Communications Decency Act of 1996. Subway, however, contended that Quiznos was liable for false statements in the videos, because they went beyond the traditional role of publisher by “soliciting disparaging material” and “shaping the eventual content” of the contestant videos. Subway alleged that Quiznos solicited the disparaging material by requiring contestants’ videos to make a direct comparison between the two franchises and depicting Quiznos as superior. Subway further contended that Quiznos shaped the eventual content by posting sample videos on the website. The court held that whether Quiznos actively created and developed the content of the contestant videos is an issue of material fact, best submitted for the jury to decide. As such, the court denied Quiznos motion for summary judgment.
In 2006, Quiznos aired television commercials depicting Quiznos’ Prime Rib sandwich and Subway’s Cheesesteak sandwich side-by-side on a tray, while actual consumers offered unscripted opinions about the quantity of meat on each sandwich. In 2007, Quiznos aired a similar commercial comparing their Ultimate Italian sandwich to Subway’s Italian BMT. The commercials alleged that Quiznos “double meat” sandwiches had “two times the meat” of similar Subway sandwiches. Subway contended that Quiznos’ claims are false or misleading under the Lanham Act. Under the Lanham Act, “a plaintiff can demonstrate that the advertisement is literally false, i.e., false on its face … Alternatively, a plaintiff can show that the advertisement, while not literally false, is nevertheless likely to mislead or confuse customers.” Time Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 153 (2d. Cir. 2007). Subway contended that Quiznos’ commercials were literally false.
Quiznos argued that the commercial were true, because their “double meat” sandwiches actually contained twice the meat (measured in ounces) of comparable Subway sandwiches. Quiznos conducted “audits” of Quiznos and Subway franchises to substantiate their “two times the meat” claim. Subway contends that the studies were flawed, and furthermore, the commercials were literally false, because they did not disclose that Subway offered a double portion of meat (for an additional $1.00). The court found that the audit and additional studies may be evidence of the validity of Quiznos’ claims but that it was far from conclusive at the summary judgment stage. As a result, the court denied Quiznos’ motion for summary judgment on Subway’s claims for false and deceptive advertising. The case subsequently settled before it was set to go to trial this month.