Court of Appeals Rules Papa John's Comparative Advertisements Against Pizza Hut 'Misleading' (9/00)

The United States Court of Appeals for the Fifth Circuit ruled that Papa John's comparative advertisements against Pizza Hut were "misleading statements of fact." The Court further ruled that Papa John's marketing slogan "Better Ingredients. Better Pizza," when used in conjunction with these comparative advertisements, is also misleading. Nonetheless, the Court set aside the District Court's ruling on other technical, evidentiary grounds.

"Today's ruling by the Court is a victory for consumers because it protects their right to know that there is truth in advertising," said Mike Rawlings, president, Pizza Hut. "No longer can companies like Papa John's confuse consumers with comparative advertising that is false and misleading. And as the pizza leader, Pizza Hut not only has a responsibility to make America's favorite pizza with the freshest ingredients, but to stand up for the consumer's right to know the truth."

In a 38-page opinion reviewing the record at trial, the Fifth Circuit found: "it is clear there is sufficient evidence to support the jury's conclusion that (Papa John's) sauce and dough ads were misleading statements of fact actionable under the Lanham Act." The opinion also found that Papa John's slogan ("Better Ingredients. Better Pizza.") "when used in the context of the sauce and dough ads, is misleading."

Pizza Hut, a division of Tricon Global Restaurants, (NYSE: YUM), is the world's largest Restaurant company with more than 8,000 restaurants in the U.S. and nearly 4,000 restaurants in 90 countries. The company is the recognized leader in the $25 billion pizza category.