IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 00-10071
_____________________
PIZZA HUT, INC.,
Plaintiff-Counter Defendant-Appellee,
versus
PAPA JOHN’S INTERNATIONAL, INC.;
PAPA JOHN’S USA, INC.,
Defendants-Counter Claimants-Appellants.
_________________________________________________________________
Appeals from the United States District Court for the
Northern District of Texas, Dallas
_________________________________________________________________
September 19, 2000
Before POLITZ, JOLLY, and BARKSDALE, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This appeal presents a false advertising claim under section
43(a) of the Lanham Act, resulting in a jury verdict for the
plaintiff, Pizza Hut. At the center of this appeal is Papa John’s
four word slogan “Better Ingredients. Better Pizza.”
The appellant, Papa John’s International Inc. (“Papa John’s”),
argues that the slogan “cannot and does not violate the Lanham Act”
because it is “not a misrepresentation of fact.” The appellee,
Pizza Hut, Inc., argues that the slogan, when viewed in the context
of Papa John’s overall advertising campaign, conveys a false
statement of fact actionable under section 43(a) of the Lanham Act.
The district court, after evaluating the jury’s responses to a
series of special interrogatories and denying Papa John’s motion
for judgment as a matter of law, entered judgment for Pizza Hut
stating:
When the ‘Better Ingredients. Better Pizza.’ slogan is
considered in light of the entirety of Papa John’s post-
May 1997 advertising which violated provisions of the
Lanham Act and in the context in which it was juxtaposed
with the false and misleading statements contained in
Papa John’s print and broadcast media advertising, the
slogan itself became tainted to the extent that its
continued use should be enjoined.
We conclude that (1) the slogan, standing alone, is not an
objectifiable statement of fact upon which consumers would be
justified in relying, and thus not actionable under section 43(a);
and (2) while the slogan, when utilized in connection with some of
the post-May 1997 comparative advertising--specifically, the sauce
and dough campaigns--conveyed objectifiable and misleading facts,
Pizza Hut has failed to adduce any evidence demonstrating that the
facts conveyed by the slogan were material to the purchasing
decisions of the consumers to which the slogan was directed. Thus,
the district court erred in denying Papa John’s motion for judgment
as a matter of law. We therefore reverse the judgment of the
district court denying Papa John’s motion for judgment as a matter
of law, vacate its final judgment, and remand the case to the
district court for entry of judgment for Papa John’s.
2
I
A
Pizza Hut is a wholly owned subsidiary of Tricon Global
Restaurants. With over 7000 restaurants (both company and
franchisee-owned), Pizza Hut is the largest pizza chain in the
United States. In 1984, John Schnatter founded Papa John’s Pizza
in the back of his father’s tavern. Papa John’s has grown to over
2050 locations, making it the third largest pizza chain in the
United States.
In May 1995, Papa John’s adopted a new slogan: “Better
Ingredients. Better Pizza.” In 1996, Papa John’s filed for a
federal trademark registration for this slogan with the United
States Patent & Trademark Office (“PTO”). Its application for
registration was ultimately granted by the PTO. Since 1995, Papa
John’s has invested over $300 million building customer goodwill in
its trademark “Better Ingredients. Better Pizza.” The slogan has
appeared on millions of signs, shirts, menus, pizza boxes, napkins
and other items, and has regularly appeared as the “tag line” at
the end of Papa John’s radio and television ads, or with the
company logo in printed advertising.
On May 1, 1997, Pizza Hut launched its “Totally New Pizza”
campaign. This campaign was the culmination of “Operation
Lightning Bolt,” a nine-month, $50 million project in which Pizza
3
Hut declared “war” on poor quality pizza. From the deck of a World
War II aircraft carrier, Pizza Hut’s president, David Novak,
declared “war” on “skimpy, low quality pizza.” National ads aired
during this campaign touted the “better taste” of Pizza Hut’s
pizza, and “dared” anyone to find a “better pizza.”
In early May 1997, Papa John’s launched its first national ad
campaign. The campaign was directed towards Pizza Hut, and its
“Totally New Pizza” campaign. In a pair of TV ads featuring Pizza
Hut’s co-founder Frank Carney, Carney touted the superiority of
Papa John’s pizza over Pizza Hut’s pizza. Although Carney had left
the pizza business in the 1980’s, he returned as a franchisee of
Papa John’s because he liked the taste of Papa John’s pizza better
than any other pizza on the market. The ad campaign was remarkably
successful. During May 1997, Papa John’s sales increased 11.7
percent over May 1996 sales, while Pizza Hut’s sales were down 8
percent.
On the heels of the success of the Carney ads, in February
1998, Papa John’s launched a second series of ads touting the
results of a taste test in which consumers were asked to compare
Papa John’s and Pizza Hut’s pizzas. In the ads, Papa John’s
boasted that it “won big time” in taste tests. The ads were a
response to Pizza Hut’s “dare” to find a “better pizza.” The taste
test showed that consumers preferred Papa John’s traditional crust
4
pizzas over Pizza Hut’s comparable pizzas by a 16-point margin (58%
to 42%). Additionally, consumers preferred Papa John’s thin crust
pizzas by a fourteen-point margin (57% to 43%).
Following the taste test ads, Papa John’s ran a series of ads
comparing specific ingredients used in its pizzas with those used
by its “competitors.” During the course of these ads, Papa John’s
touted the superiority of its sauce and its dough. During the
sauce campaign, Papa John’s asserted that its sauce was made from
“fresh, vine-ripened tomatoes,” which were canned through a process
called “fresh pack,” while its competitors--including Pizza Hut--
make their sauce from remanufactured tomato paste. During the
dough campaign, Papa John’s stated that it used “clear filtered
water” to make its pizza dough, while the “biggest chain” uses
“whatever comes out of the tap.” Additionally, Papa John’s
asserted that it gives its yeast “several days to work its magic,”
while “some folks” use “frozen dough or dough made the same day.”
At or near the close of each of these ads, Papa John’s punctuated
its ingredient comparisons with the slogan “Better Ingredients.
Better Pizza.”
Pizza Hut does not appear to contest the truthfulness of the
underlying factual assertions made by Papa John’s in the course of
these ads. Pizza Hut argues, however, that its own independent
taste tests and other “scientific evidence” establishes that
5
filtered water makes no difference in pizza dough, that there is no
“taste” difference between Papa John’s “fresh-pack” sauce and Pizza
Hut’s “remanufactured” sauce, and that fresh dough is not superior
to frozen dough. In response to Pizza Hut’s “scientific evidence,”
Papa John’s asserts that “each of these ‘claims’ involves a matter
of common sense choice (fresh versus frozen, canned vegetables and
fruit versus remanufactured paste, and filtered versus unfiltered
water) about which individual consumers can and do form preferences
every day without ‘scientific’ or ‘expert’ assistance.”
In November 1997, Pizza Hut filed a complaint regarding Papa
John’s “Better Ingredients. Better Pizza.” advertising campaign
with the National Advertising Division of the Better Business
Bureau, an industry self-regulatory body. This complaint, however,
did not produce satisfactory results for Pizza Hut.
B
On August 12, 1998, Pizza Hut filed a civil action in the
United States District Court for the Northern District of Texas
charging Papa John’s with false advertising in violation of Section
43(a)(1)(B) of the Lanham Act. The suit sought relief based on the
above-described TV ad campaigns, as well as on some 249 print ads.
On March 10, 1999, Pizza Hut filed an amended complaint. Papa
John’s answered the complaints by denying that its advertising and
slogan violated the Lanham Act. Additionally, Papa John’s asserted
6
a counterclaim, charging Pizza Hut with engaging in false
advertising. The parties consented to a jury trial before a United
States magistrate judge. The parties further agreed that the
liability issues were to be decided by the jury, while the
equitable injunction claim and damages award were within the
province of the court.
The trial began on October 26, 1999, and continued for over
three weeks. At the close of Pizza Hut’s case, and at the close of
all evidence, Papa John’s moved for a judgment as a matter of law.
The motions were denied each time. The district court, without
objection, submitted the liability issue to the jury through
special interrogatories.1 The special issues submitted to the jury
related to (1) the slogan and (2) over Papa John’s objection,
certain classes of groups of advertisements referred to as “sauce
1
Although Papa John’s did not object to the submission of the
issue of Lanham Act liability to the jury via special
interrogatories, it did object to the district court’s refusal to
submit special interrogatories on the essential elements of
materiality and injury. Specifically, Papa John’s submitted the
following proposed jury interrogatories: (1) “Do you find that
any false or misleading description or representation of fact in
Papa John’s Slogan ‘Better Ingredients. Better Pizza.’ are
material in that they are likely to influence the purchasing
decisions of prospective purchasers of pizza?” (emphasis added);
and (2) “Do you find that any facts or misleading descriptions or
representations of fact in Papa John’s Slogan ‘Better Ingredients.
Better Pizza.’ are likely to cause injury or damage to Pizza Hut in
terms of declining sales or loss of good will?” The district
court, without issuing written reasons, denied Papa John’s request
for special jury interrogatories on these two elements of Pizza
Hut’s prima facie case.
7
claims,” “dough claims,” “taste test claims,” and “ingredients
claims.”
On November 17, 1999, the jury returned its responses to the
special issues finding that Papa John’s slogan, and its “sauce
claims” and “dough claims” were false or misleading and deceptive
or likely to deceive consumers.2 The jury also determined that
Papa John’s “taste test” ads were not deceptive or likely to
deceive consumers, and that Papa John’s “ingredients claims” were
not false or misleading.3 As to Papa John’s counterclaims against
2
Specifically, the jury answered “Yes” to each of the
following interrogatories: (1) Did you find that Papa John’s
“Better Ingredients. Better Pizza” slogan is false or misleading,
and was a false or misleading description or representation of fact
which deceived or was likely to deceive a substantial number of the
consumers to whom the slogan was directed; (2) Did you find that
Papa John’s “sauce” claims are false or misleading, and was a false
or misleading description or representation of fact which deceived
or was likely to deceive a substantial number of the consumers to
whom the slogan was directed; and (3) Did you find that Papa John’s
“dough” claims are false or misleading, and was a false or
misleading description or representation of fact which deceived or
was likely to deceive a substantial number of the consumers to whom
the slogan was directed? Although the jury was specifically asked
whether the advertisements were likely to deceive consumers, the
interrogatories failed to ask whether the deception created by
these advertisements was material to the consumers to which the ads
were directed--that is, whether consumers actually relied on the
misrepresentations in making purchasing decisions.
3
Specifically, the jury answered “No” to the following
interrogatories: (1) Did you find that Papa John’s “taste test”
commercials are a false or misleading description or representation
of fact which deceived or was likely to deceive a substantial
number of the consumers to whom the slogan was directed; and (2)
Did you find that Papa John’s “ingredients” claims are false or
misleading? The “ingredients” ads found not to be false or
8
Pizza Hut, the jury found that two of the three Pizza Hut
television ads at issue were false or misleading and deceptive or
likely to deceive consumers.4
On January 3, 2000, the trial court, based upon the jury’s
verdict and the evidence presented by the parties in support of
injunctive relief and on the issue of damages, entered a Final
Judgment and issued a Memorandum Opinion and Order. The court
concluded that the “Better Ingredients. Better Pizza.” slogan was
“consistent with the legal definition of non-actionable puffery”
from its introduction in 1995 until May 1997. However, the slogan
“became tainted . . . in light of the entirety of Papa John’s post-
May 1997 advertising.” Based on this conclusion, the magistrate
judge permanently enjoined Papa John’s from “using any slogan in
the future that constitutes a recognizable variation of the phrase
“Better Ingredients. Better Pizza.” or which uses the adjective
“Better” to modify the terms “ingredients” and/or “pizza.”
Additionally, the court enjoined Papa John’s from identifying Frank
Carney as a co-founder of Pizza Hut, “unless such advertising
includes a voice-over, printed statement or a superimposed message
which states that Frank Carney has not been affiliated with Pizza
misleading did not include any of the “sauce” or “dough” ads.
4
Pizza Hut has not sought to appeal the jury’s verdict
regarding its advertising.
9
Hut since 1980,” and enjoined the dissemination of any advertising
that was produced or disseminated prior to the date of this
judgment and that explicitly or implicitly states or suggested that
“Papa John’s component is superior to the same component of Pizza
Hut’s pizzas.” Finally, the court enjoined Papa John’s from
“explicitly or implicitly claim[ing] that a component of Papa
John’s pizza is superior to the same component of Pizza Hut’s
unless the superiority claim is supported by either (1)
scientifically demonstrated attributes of superiority or (2) taste
test surveys.” Additionally, the injunction required that if the
claim is supported by taste test surveys, the advertising shall
include a printed statement, voice-over or “super,” whichever is
appropriate, stating the localities where the tests were conducted,
the inclusive dates on which the surveys were performed, and the
specific pizza products that were tested. The court also awarded
Pizza Hut $467,619.75 in damages for having to run corrective ads.
On January 20, 2000, Papa John’s filed a notice of appeal with
our court. On January 26, we granted Papa John’s motion to stay
the district court’s injunction pending appeal.
II
We review the district court’s denial of a motion for judgment
as a matter of law de novo applying the same standards as the
district court. See Ensley v. Cody Resources, Inc., 171 F.3d 315,
10
319 (5th Cir. 1999)(citing Hidden Oaks Ltd. v. City of Austin, 138
F.3d 1036, 1042 (5th Cir. 1998)); Nero v. Industrial Molding
Corp., 167 F.3d 921, 925 (5th Cir. 1999). In ruling on a motion
for judgment as a matter of law, we will consider all of the
evidence--not just the evidence that supports the non-movant’s
case--but in the light most favorable to the non-movant. Id. The
granting of a judgment as a matter of law will be appropriate “if,
after a party has been fully heard by the jury on an issue, ‘there
is no legally sufficient evidentiary basis for a reasonable jury to
[find] for that party with respect to that issue.’” Rutherford v.
Harris County, Texas, 197 F.3d 173, 179 (5th Cir. 1999)(quoting
Aetna Cas. & Sur. Co., v. Pendleton Detectives of Miss., Inc., 182
F.3d 376, 377-78 (5th Cir. 1999))(emphasis added).
Thus, for purposes of this appeal, we will review the
evidence, in the most favorable light to Pizza Hut, to determine
if, as a matter of law, it is sufficient to support a claim of
false advertising under section 43(a) of the Lanham Act.
III
A
Section 43(a) of the Lanham Act, codified at 15 U.S.C. § 1125,
provides in relevant part:
Any person who . . . in commercial advertising or
promotion, misrepresents the nature, characteristics,
quality, or geographic origin of his or another person’s
goods, services, or commercial activities, shall be
11
liable in a civil action by any person who believes that
he or she is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1)(B) (West 1999). We have interpreted this
section of the Lanham Act as providing “protection against a
‘myriad of deceptive commercial practices,’ including false
advertising or promotion.” Seven-Up Co. v. Coca-Cola Co., 86 F.3d
1379, 1387 (5th Cir. 1996)(quoting Resource Developers v. Statue of
Liberty-Ellis Island Found., 926 F.2d 134, 139 (2d Cir. 1991)).
A prima facie case of false advertising under section 43(a)
requires the plaintiff to establish:
(1) A false or misleading statement of fact about a
product;
(2) Such statement either deceived, or had the capacity
to deceive a substantial segment of potential
consumers;
(3) The deception is material, in that it is likely to
influence the consumer’s purchasing decision;
(4) The product is in interstate commerce; and
(5) The plaintiff has been or is likely to be injured
as a result of the statement at issue.
See Taquino v. Teledyne Monarch Rubber, 893 F.2d 1488, 1500 (5th
Cir. 1990); Cook, Perkiss and Liehe, Inc. v. Northern Cal.
Collection Serv. Inc., 911 F.2d 242, 246 (9th Cir. 1990); 4 J.
Thomas McCarthy, McCarthy on Trademarks and Unfair Competition,
§ 27:24 (4th ed. 1996). The failure to prove the existence of any
element of the prima facie case is fatal to the plaintiff’s claim.
Id.
B
12
The law governing false advertising claims under section 43(a)
of the Lanham Act is well settled. In order to obtain monetary
damages or equitable relief in the form of an injunction, “a
plaintiff must demonstrate that the commercial advertisement or
promotion is either literally false, or that [if the advertisement
is not literally false,] it is likely to mislead and confuse
consumers.” Seven-Up, 86 F.3d at 1390 (citing McNeil-P.C.C., Inc.
v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1548-49 (2d Cir.
1991)); see also Johnson & Johnson v. Smithkline Beecham Corp., 960
F.2d 294, 298 (2d Cir. 1992).5 If the statement is shown to be
5
When construing the allegedly false or misleading statement
to determine if it is actionable under section 43(a), the
statement must be viewed in the light of the overall context in
which it appears. See Avis, 782 F.2d at 385; Southland, 108 F.3d
at 1139. “Fundamental to any task of interpretation is the
principle that text must yield to context.” Avis, 782 F.2d at
385. Context will often help to determine whether the statement at
issue is so overblown and exaggerated that no reasonable consumer
would likely rely upon it. As the court in Federal Express
Corporation v. United States Postal Services, 40 F.Supp. 2d 943
(W.D. Tenn. 1999), noted:
On its face, [the statement at issue] does not seem to be
the type of vague, general exaggeration which no
reasonable person would rely upon in making a purchasing
decision. Nevertheless, the determination of whether an
advertising statement should be deemed puffery is driven
by the context in which the statement is made. Where the
context of an advertising statement may lend greater
specificity to an otherwise vague representation, the
court should not succumb to the temptation to hastily
rule a phrase to be unactionable under the Lanham Act.
Id. at 956.
13
misleading, the plaintiff must also introduce evidence of the
statement’s impact on consumers, referred to as materiality.
American Council of Certified Podiatric Physicians and Surgeons v.
American Bd. of Podiatric Surgery, Inc., 185 F.3d 606, 614 (6th
Cir. 1999).
(1)
(a)
Essential to any claim under section 43(a) of the Lanham Act
is a determination of whether the challenged statement is one of
fact--actionable under section 43(a)--or one of general opinion--
not actionable under section 43(a). Bald assertions of superiority
or general statements of opinion cannot form the basis of Lanham
Act liability. See Presidio Enters., Inc. v. Warner Bros. Distrib.
Corp., 784 F.2d 674, 685 (5th Cir. 1986); Groden v. Random House,
Inc., 61 F.3d 1045, 1051 (2d Cir. 1995)(citing Restatement (Third)
of Unfair Competition § 3 (1993)). Rather the statements at issue
must be a “specific and measurable claim, capable of being proved
false or of being reasonably interpreted as a statement of
objective fact.” Coastal Abstract Serv., Inc. v. First Am. Title
Ins. Co., 173 F.3d 725, 731 (9th Cir. 1999); see also American
Council, 185 F.3d at 614(stating that “a Lanham Act claim must be
based upon a statement of fact, not of opinion”). As noted by our
court in Presidio: “[A] statement of fact is one that (1) admits
14
of being adjudged true or false in a way that (2) admits of
empirical verification.” Presidio, 784 F.2d at 679; see also
Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1145 (9th
Cir. 1997)(stating that in order to constitute a statement of fact,
a statement must make “a specific and measurable advertisement
claim of product superiority”).
(b)
One form of non-actionable statements of general opinion under
section 43(a) of the Lanham Act has been referred to as “puffery.”
Puffery has been discussed at some length by other circuits. The
Third Circuit has described “puffing” as “advertising that is not
deceptive for no one would rely on its exaggerated claims.” U.S.
Healthcare, Inc. v. Blue Cross of Greater Philadelphia, 898 F.2d
914 (3d Cir. 1990). Similarly, the Ninth Circuit has defined
“puffing” as “exaggerated advertising, blustering and boasting upon
which no reasonable buyer would rely and is not actionable under
43(a).” Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134,
1145 (9th Cir. 1997) (quoting 3 J. Thomas McCarthy, McCarthy on
Trademarks and Unfair Competition §27.04[4][d] (3d ed. 1994)); see
also Cook, 911 F.2d at 246 (stating that “[p]uffing has been
described by most courts as involving outrageous generalized
15
statements, not making specific claims, that are so exaggerated as
to preclude reliance by consumers”).6
These definitions of puffery are consistent with the
definitions provided by the leading commentaries in trademark law.
A leading authority on unfair competition has defined “puffery” as
an “exaggerated advertising, blustering, and boasting upon which no
reasonable buyer would rely,” or “a general claim of superiority
over a comparative product that is so vague, it would be understood
as a mere expression of opinion.” 4 J. Thomas McCarthy, McCarthy
on Trademark and Unfair Competition § 27.38 (4th ed. 1996).7
Similarly, Prosser and Keeton on Torts defines “puffing” as “a
seller’s privilege to lie his head off, so long as he says nothing
specific, on the theory that no reasonable man would believe him,
or that no reasonable man would be influenced by such talk.”
6
In the same vein, the Second Circuit has observed that
“statements of opinion are generally not the basis for Lanham Act
liability.” Groden v. Random House, 61 F.3d 1045, 1051 (2d Cir.
1995). When a statement is “obviously a statement of opinion,” it
cannot “reasonably be seen as stating or implying provable facts.”
Id. “The Lanham Act does not prohibit false statements generally.
It prohibits only false or misleading description or false or
misleading representations of fact made about one’s own or
another’s goods or services.” Id. at 1052.
7
McCarty on Trademarks goes on to state: “[V]ague advertising
claims that one’s product is ‘better’ than that of competitors’ can
be dismissed as mere puffing that is not actionable as false
advertising.” 4 J. Thomas McCarthy, McCarthy on Trademarks and
Unfair Competition § 27:38 (4th ed. 1997).
16
W. Page Keeton, et al., Prosser and Keeton on the Law of Torts
§ 109, at 757 (5th ed. 1984).
Drawing guidance from the writings of our sister circuits and
the leading commentators, we think that non-actionable “puffery”
comes in at least two possible forms: (1) an exaggerated,
blustering, and boasting statement upon which no reasonable buyer
would be justified in relying; or (2) a general claim of
superiority over comparable products that is so vague that it can
be understood as nothing more than a mere expression of opinion.
(2)
(a)
With respect to materiality, when the statements of fact at
issue are shown to be literally false, the plaintiff need not
introduce evidence on the issue of the impact the statements had on
consumers. See Castrol, Inc. v. Quaker State Corp., 977 F.2d 57,
62 (2d Cir. 1992); Avila v. Rubin, 84 F.3d 222, 227 (7th Cir.
1996). In such a circumstance, the court will assume that the
statements actually misled consumers. See American Council, 185
F.3d at 614; Johnson & Johnson, Inc. v. GAC Int’l, Inc., 862 F.2d
975, 977 (2d Cir. 1988); U-Haul Inter’l, Inc. v. Jartran, Inc., 793
F.2d 1034, 1040 (9th Cir. 1986). On the other hand, if the
statements at issue are either ambiguous or true but misleading,
the plaintiff must present evidence of actual deception. See
17
American Council, 185 F.3d at 616; Smithkline, 960 F.2d at 297
(stating that when a “plaintiff’s theory of recovery is premised
upon a claim of implied falsehood, a plaintiff must demonstrate, by
extrinsic evidence, that the challenged commercials tend to mislead
or confuse”); Avila, 84 F.3d at 227. The plaintiff may not rely
on the judge or the jury to determine, “based solely upon his or
her own intuitive reaction, whether the advertisement is
deceptive.” Smithkline, 960 F.2d at 297. Instead, proof of actual
deception requires proof that “consumers were actually deceived by
the defendant’s ambiguous or true-but-misleading statements.”
American Council, 185 F.3d at 616; see also Avis Rent A Car Sys.,
Inc. v. Hertz Corp., 782 F.2d 381, 386 (2d Cir. 1986)(stating that
the plaintiff’s claim fails due to its failure to introduce
evidence establishing that the public was actually deceived by the
statements at issue).
(b)
The type of evidence needed to prove materiality also varies
depending on what type of recovery the plaintiff seeks. Plaintiffs
looking to recover monetary damages for false or misleading
advertising that is not literally false must prove actual
deception. See Balance Dynamics Corp. v. Schmitt Ind., 204 F.3d
683, 690 (6th Cir. 2000); Resource Developers, 926 F.2d at 139.
Plaintiffs attempting to prove actual deception have to produce
18
evidence of actual consumer reaction to the challenged advertising
or surveys showing that a substantial number of consumers were
actually misled by the advertisements. See, e.g., PPX Enters.,
Inc. v. Autofidelity Enters., Inc., 818 F.2d 266, 271 (2d Cir.
1987) (“Actual consumer confusion often is demonstrated through the
use of direct evidence, e.g., testimony from members of the buying
public, as well as through circumstantial evidence, e.g., consumer
surveys or consumer reaction tests.”).
Plaintiffs seeking injunctive relief must prove that
defendant’s representations “have a tendency to deceive consumers.”
Balance Dynamics, 204 F.3d 683 at 690. See also Resource
Developers, 926 F.2d at 139; Blue Dane Simmental Corp. v. American
Simmental Assoc., 178 F.3d 1035, 1042-43 (8th Cir. 1999); Black
Hills Jewelry Mfg. Co. v. Gold Rush, Inc., 633 F.2d 746, 753 (8th
Cir. 1980); 4 McCarty on Trademark and Unfair Competition § 27:36
(4th ed.). Although this standard requires less proof than actual
deception, plaintiffs must still produce evidence that the
advertisement tends to deceive consumers. See Coca-Cola Co. v.
Tropicana Prod., Inc., 690 F.2d 312, 317 (2d Cir. 1982) (noting
that when seeking a preliminary injunction barring an advertisement
that is implicitly false, “its tendency to violate the Lanham Act
by misleading, confusing or deceiving should be tested by public
reaction”). To prove a tendency to deceive, plaintiffs need to
19
show that at least some consumers were confused by the
advertisements. See, e.g., American Council, 185 F.3d at 618
(“Although plaintiff need not present consumer surveys or testimony
demonstrating actual deception, it must present evidence of some
sort demonstrating that consumers were misled.”)
IV
We turn now to consider the case before us. Reduced to its
essence, the question is whether the evidence, viewed in the most
favorable light to Pizza Hut, established that Papa John’s slogan
“Better Ingredients. Better Pizza.” is misleading and violative of
section 43(a) of the Lanham Act. In making this determination, we
will first consider the slogan “Better Ingredients. Better Pizza.”
standing alone to determine if it is a statement of fact capable of
deceiving a substantial segment of the consuming public to which it
was directed. Second, we will determine whether the evidence
supports the district court’s conclusion that after May 1997, the
slogan was tainted, and therefore actionable, as a result of its
use in a series of ads comparing specific ingredients used by Papa
John’s with the ingredients used by its “competitors.”
A
The jury concluded that the slogan itself was a “false or
misleading” statement of fact, and the district court enjoined its
further use. Papa John’s argues, however, that this statement
20
“quite simply is not a statement of fact, [but] rather, a statement
of belief or opinion, and an argumentative one at that.” Papa
John’s asserts that because “a statement of fact is either true or
false, it is susceptible to being proved or disproved. A statement
of opinion or belief, on the other hand, conveys the speaker’s
state of mind, and even though it may be used to attempt to
persuade the listener, it is a subjective communication that may be
accepted or rejected, but not proven true or false.” Papa John’s
contends that its slogan “Better Ingredients. Better Pizza.” falls
into the latter category, and because the phrases “better
ingredients” and “better pizza” are not subject to quantifiable
measures, the slogan is non-actionable puffery.
We will therefore consider whether the slogan standing alone
constitutes a statement of fact under the Lanham Act. Bisecting
the slogan “Better Ingredients. Better Pizza.,” it is clear that
the assertion by Papa John’s that it makes a “Better Pizza.” is a
general statement of opinion regarding the superiority of its
product over all others. This simple statement, “Better Pizza.,”
epitomizes the exaggerated advertising, blustering, and boasting by
a manufacturer upon which no consumer would reasonably rely. See,
e.g., In re Boston Beer Co., 198 F.3d 1370, 1372 (Fed. Cir.
1999)(stating that the phrase “The Best Beer in America” was “trade
puffery” and that such a general claim of superiority “should be
21
freely available to all competitors in any given field to refer to
their products or services”); Atari Corp v. 3D0 Co., 1994 WL
723601, *2 (N.D. Cal. 1994)(stating that a manufacturer’s slogan
that its product was “the most advanced home gaming system in the
universe” was non-actionable puffery); Nikkal Indus., Ltd. v.
Salton, Inc., 735 F. Supp. 1227, 1234 n.3 (S.D.N.Y. 1990)(stating
that a manufacturers claim that its ice cream maker was “better”
than competition ice cream makers is non-actionable puffery).
Consequently, it appears indisputable that Papa John’s assertion
“Better Pizza.” is non-actionable puffery.8
Moving next to consider separately the phrase “Better
Ingredients.,” the same conclusion holds true. Like “Better
Pizza.,” it is typical puffery. The word “better,” when used in
this context is unquantifiable. What makes one food ingredient
“better” than another comparable ingredient, without further
description, is wholly a matter of individual taste or preference
not subject to scientific quantification. Indeed, it is difficult
to think of any product, or any component of any product, to which
8
It should be noted that Pizza Hut uses the slogan “The Best
Pizza Under One Roof.” Similarly, other nationwide pizza chains
employ slogans touting their pizza as the “best”: (1) Domino’s
Pizza uses the slogan “Nobody Delivers Better.”; (2) Danato’s uses
the slogan “Best Pizza on the Block.”; (3) Mr. Gatti’s uses the
slogan “Best Pizza in Town: Honest!; and (4) Pizza Inn uses the
slogans “Best Pizza Ever.” and “The Best Tasting Pizza.”
22
the term “better,” without more, is quantifiable. As our court
stated in Presidio:
The law recognizes that a vendor is allowed some latitude
in claiming merits of his wares by way of an opinion
rather than an absolute guarantee, so long as he hews to
the line of rectitude in matters of fact. Opinions are
not only the lifestyle of democracy, they are the brag in
advertising that has made for the wide dissemination of
products that otherwise would never have reached the
households of our citizens. If we were to accept the
thesis set forth by the appellees, [that all statements
by advertisers were statements of fact actionable under
the Lanham Act,] the advertising industry would have to
be liquidated in short order.
Presidio, 784 F.2d at 685. Thus, it is equally clear that Papa
John’s assertion that it uses “Better Ingredients.” is one of
opinion not actionable under the Lanham Act.
Finally, turning to the combination of the two non-actionable
phrases as the slogan “Better Ingredients. Better Pizza.,” we fail
to see how the mere joining of these two statements of opinion
could create an actionable statement of fact. Each half of the
slogan amounts to little more than an exaggerated opinion of
superiority that no consumer would be justified in relying upon.
It has not been explained convincingly to us how the combination of
the two phrases, without more, changes the essential nature of each
phrase so as to make it actionable. We assume that “Better
Ingredients.” modifies “Better Pizza.” and consequently gives some
expanded meaning to the phrase “Better Pizza,” i.e., our pizza is
23
better because our ingredients are better. Nevertheless, the
phrase fails to give “Better Pizza.” any more quantifiable meaning.
Stated differently, the adjective that continues to describe
“pizza” is “better,” a term that remains unquantifiable, especially
when applied to the sense of taste. Consequently, the slogan as a
whole is a statement of non-actionable opinion. Thus, there is no
legally sufficient basis to support the jury’s finding that the
slogan standing alone is a “false or misleading” statement of fact.
24
B
We next will consider whether the use of the slogan “Better
Ingredients. Better Pizza.” in connection with a series of
comparative ads found by the jury to be misleading--specifically,
ads comparing Papa John’s sauce and dough with the sauce and dough
of its competitors--“tainted” the statement of opinion and made it
misleading under section 43(a) of the Lanham Act. Before reaching
the ultimate question of whether the slogan is actionable under the
Lanham Act, we will first examine the sufficiency of the evidence
supporting the jury’s conclusion that the comparison ads were
misleading.
(1)
After the jury returned its verdict, Papa John’s filed a post-
verdict motion under Federal Rule of Civil Procedure 50 for a
judgment as a matter of law. In denying Papa John’s motion, the
district court, while apparently recognizing that the slogan
“Better Ingredients. Better Pizza.” standing alone is non-
actionable puffery under the Lanham Act, concluded that after May
1997, the slogan was transformed as a result of its use in
connection with a series of ads that the jury found misleading.
These ads had compared specific ingredients used by Papa John’s
25
with the ingredients used by its competitors.9 In essence, the
district court held that the comparison ads in which the slogan
appeared as the tag line gave objective, quantifiable, and fact-
specific meaning to the slogan. Consequently, the court concluded
that the slogan was misleading and actionable under section 43(a)
of the Lanham Act and enjoined its further use.
(2)
We are obligated to accept the findings of the jury unless the
facts point so overwhelmingly in favor of one party that no
reasonable person could arrive at a different conclusion. See
Scottish Heritable Trust v. Peat Marwick Main & Co., 81 F.3d 606,
610 (5th Cir. 1996). In examining the record evidence, we must
9
In its memorandum opinion addressing Papa John’s post-verdict
Rule 50 motion, the court stated:
Although Papa John’s started in May 1995 with a slogan
which was essentially ambiguous and self-laudatory,
consistent with the legal definition of non-actionable
puffery, Papa John’s deliberately and intentionally
exploited its slogan as a centerpiece of its subsequent
advertising campaign after May 1997 which falsely
portrayed Papa Johns’s tomato sauce and pizza dough as
being superior to the sauce and dough components used in
Pizza Hut’s pizza products. When the “Better
Ingredients. Better Pizza.” slogan is considered in
light of the entirety of Papa John’s post-May 1997
advertising which violated the provisions of the Lanham
Act and in the context in which it was juxtaposed with
the false and misleading statements contained in Papa
John’s print and broadcast media advertising, the slogan
itself became tainted to the extent that its continued
use should be enjoined.
26
view it the way that is most favorable to upholding the verdict.
See Hiltgen v. Sumrall, 47 F.3d 695, 700 (5th Cir. 1995). Viewed
in this light, it is clear that there is sufficient evidence to
support the jury’s conclusion that the sauce and dough ads were
misleading statements of fact actionable under the Lanham Act.
Turning first to the sauce ads, the evidence establishes that
despite the differences in the methods used to produce their
competing sauces: (1) the primary ingredient in both Pizza Hut and
Papa John’s sauce is vine-ripened tomatoes; (2) at the point that
the competing sauces are placed on the pizza, just prior to putting
the pies into the oven for cooking, the consistency and water
content of the sauces are essentially identical; and (3) as noted
by the district court, at no time “prior to the close of the
liability phase of trial was any credible evidence presented [by
Papa John’s] to demonstrate the existence of demonstrable
differences” in the competing sauces. Consequently, the district
court was correct in concluding that: “Without any scientific
support or properly conducted taste preference test, by the written
and/or oral negative connotations conveyed that pizza made from
tomato paste concentrate is inferior to the ‘fresh pack’ method
used by Papa John’s, its sauce advertisements conveyed an
impression which is misleading. . . .” Turning our focus to the
dough ads, while the evidence clearly established that Papa John’s
27
and Pizza Hut employ different methods in making their pizza dough,
again, the evidence established that there is no quantifiable
difference between pizza dough produced through the “cold or slow-
fermentation method” (used by Papa John’s), or the “frozen dough
method” (used by Pizza Hut).10 Further, although there is some
evidence indicating that the texture of the dough used by Papa
John’s and Pizza Hut is slightly different, this difference is not
related to the manufacturing process used to produce the dough.
Instead, it is due to a difference in the wheat used to make the
dough. Finally, with respect to the differences in the pizza dough
resulting from the use of filtered water as opposed to tap water,
the evidence was sufficient for the jury to conclude that there is
no quantifiable difference between dough produced with tap water,
as opposed to dough produced with filtered water.
We should note again that Pizza Hut does not contest the
truthfulness of the underlying factual assertions made by Papa
John’s in the course of the sauce and dough ads. Pizza Hut
concedes that it uses “remanufactured” tomato sauce to make its
pizza sauce, while Papa John’s uses “fresh-pack.” Further, in
regard to the dough, Pizza Hut concedes the truth of the assertion
10
The testimony of Pizza Hut’s expert, Dr. Faubion, established
that although consumers stated a preference for fresh dough rather
than frozen dough, when taste tests were conducted, respondents
were unable to distinguish between pizza made on fresh as opposed
to frozen dough.
28
that it uses tap water in making its pizza dough, which is often
frozen, while Papa John’s uses filtered water to make its dough,
which is fresh--never frozen. Consequently, because Pizza Hut does
not contest the factual basis of Papa John’s factual assertions,
such assertions cannot be found to be factually false, but only
impliedly false or misleading.
Thus, we conclude by saying that although the ads were true
about the ingredients Papa John’s used, it is clear that there was
sufficient evidence in the record to support the jury’s conclusion
that Papa John’s sauce and dough ads were misleading--but not
false--in their suggestion that Papa John’s ingredients were
superior.
(3)
Thus, having concluded that the record supports a finding that
the sauce and dough ads are misleading statements of fact, we must
now determine whether the district court was correct in concluding
that the use of the slogan “Better Ingredients. Better Pizza.” in
conjunction with these misleading ads gave quantifiable meaning to
the slogan making a general statement of opinion misleading within
the meaning of the Lanham Act.
In support of the district court’s conclusion that the slogan
was transformed, Pizza Hut argues that “in construing any
advertising statement, the statement must be considered in the
29
overall context in which it appears.” Building on the foundation
of this basic legal principle, see Avis, 782 F.2d at 385, Pizza Hut
argues that “[t]he context in which Papa John’s slogan must be
viewed is the 2 ½ year campaign during which its advertising served
as ‘chapters’ to demonstrate the truth of the ‘Better Ingredients.
Better Pizza.’ book.” Pizza Hut argues, that because Papa John’s
gave consumers specific facts supporting its assertion that its
sauce and dough are “better”--specific facts that the evidence,
when viewed in the light most favorable to the verdict, are
irrelevant in making a better pizza--Papa John’s statement of
opinion that it made a “Better Pizza” became misleading. In
essence, Pizza Hut argues, that by using the slogan “Better
Ingredients. Better Pizza.” in combination with the ads comparing
Papa John’s sauce and dough with the sauce and dough of its
competitions, Papa John’s gave quantifiable meaning to the word
“Better” rendering it actionable under section 43(a) of the Lanham
Act.
We agree that the message communicated by the slogan “Better
Ingredients. Better Pizza.” is expanded and given additional
meaning when it is used as the tag line in the misleading sauce and
dough ads. The slogan, when used in combination with the
comparison ads, gives consumers two fact-specific reasons why Papa
John’s ingredients are “better.” Consequently, a reasonable
30
consumer would understand the slogan, when considered in the
context of the comparison ads, as conveying the following message:
Papa John’s uses “better ingredients,” which produces a “better
pizza” because Papa John’s uses “fresh-pack” tomatoes, fresh dough,
and filtered water. In short, Papa John’s has given definition to
the word “better.” Thus, when the slogan is used in this context,
it is no longer mere opinion, but rather takes on the
characteristics of a statement of fact. When used in the context
of the sauce and dough ads, the slogan is misleading for the same
reasons we have earlier discussed in connection with the sauce and
dough ads.11
11
The judgment of the district court enjoining the future use
by Papa John’s of the slogan “Better Ingredients. Better Pizza.”
did not simply bar Papa John’s use of the slogan in future ads
comparing its sauce and dough with that of its competitors.
Rather, the injunction permanently enjoined any future use of the
slogan “in association with the sale, promotion and/or
identification of pizza products sold under the Papa John’s name.”
Further, the injunction precluded Papa John’s from using the
“adjective ‘better’ to modify the terms ‘ingredients’ and/or
‘pizza.’” While it is clear that the jury did not make any finding
to support such a broad injunction, and Pizza Hut offered no survey
evidence indicating how potential consumers viewed the slogan, the
district court concluded that the evidence established that
Papa John’s deliberately and intentionally exploited its
slogan as a centerpiece of its subsequent advertising
campaign after May 1997 which falsely portrayed Papa
John’s tomato sauce and pizza dough as being superior to
the sauce and dough components used in Pizza Hut’s
products. . . . [Thus,] the slogan itself became tainted
to the extent that its continued use should be enjoined.
Our review of the record convinces us that there is simply no
31
(4)
Concluding that when the slogan was used as the tag line in
the sauce and dough ads it became misleading, we must now determine
whether reasonable consumers would have a tendency to rely on this
misleading statement of fact in making their purchasing decisions.
We conclude that Pizza Hut has failed to adduce evidence
establishing that the misleading statement of fact conveyed by the
ads and the slogan was material to the consumers to which the
slogan was directed. Consequently, because such evidence of
materiality is necessary to establish liability under the Lanham
evidence to support the district court’s conclusion that the slogan
was irreparably tainted as a result of its use in the misleading
comparison sauce and dough ads. At issue in this case were some
249 print ads and 29 television commercials. After a thorough
review of the record, we liberally construe eight print ads to be
sauce ads, six print ads to be dough ads, and six print ads to be
both sauce and dough ads. Further, we liberally construe nine
television commercials to be sauce ads and two television
commercials to be dough ads. Consequently, out of a total of 278
print and television ads, the slogan appeared in only 31 ads that
could be liberally construed to be misleading sauce or dough ads.
We find simply no evidence, survey or otherwise, to support
the district court’s conclusion that the advertisements that the
jury found misleading--ads that constituted only a small fraction
of Papa John’s use of the slogan--somehow had become encoded in the
minds of consumers such that the mention of the slogan reflectively
brought to mind the misleading statements conveyed by the sauce and
dough ads. Thus, based on the record before us, Pizza Hut has
failed to offer sufficient evidence to support the district court’s
conclusion that the slogan had become forever “tainted” by its use
as the tag line in the handful of misleading comparison ads.
32
Act, the district court erred in denying Papa John’s motion for
judgment as a matter of law.
As previously discussed, none of the underlying facts
supporting Papa John’s claims of ingredient superiority made in
connection with the slogan were literally false. Consequently, in
order to satisfy its prima facie case, Pizza Hut was required to
submit evidence establishing that the impliedly false or misleading
statements were material to, that is, they had a tendency to
influence the purchasing decisions of, the consumers to which they
were directed.12 See American Council, 185 F.3d at 614 (stating
that “a plaintiff relying upon statements that are literally true
yet misleading cannot obtain relief by arguing how consumers could
react; it must show how consumers actually do react”); Smithkline,
960 F.2d at 298; Sandoz Pharm. Corp. v. Richardson-Vicks, Inc.,
902 F.2d 222, 228-29 (3d Cir. 1990); Avis, 782 F.2d at 386; see
also 4 J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition, § 27:35 (4th ed. 1997)(stating that the “[p]laintiff
must make some showing that the defendant’s misrepresentation was
‘material’ in the sense that it would have some effect on
12
Since Pizza Hut sought only equitable relief and no monetary
damages, it was required to offer evidence sufficient to establish
that the claims made by Papa John’s had the “tendency to deceive
consumers,” rather than evidence indicating that the claims made by
Papa John’s actually deceived consumers. American Council, 185
F.3d at 606; see also Balance Dynamics, 204 F.3d at 690 (emphasis
added).
33
consumers’ purchasing decision”).13 We conclude that the evidence
proffered by Pizza Hut fails to make an adequate showing.
In its appellate brief and during the course of oral argument,
Pizza Hut directs our attention to three items of evidence in the
record that it asserts establishes materiality to consumers.
First, Pizza Hut points to the results of a survey conducted by an
“independent expert” (Dr. Dupont) regarding the use of the slogan
“Better Ingredients. Better Pizza.” as written on Papa John’s
pizza box (the box survey). The results of the box survey,
13
In Johnson & Johnson v. Smithkline Beecham Corp., 960 F.2d
294 (2d Cir. 1992), the Second Circuit discussed this requirement
in some detail:
Where, as here, a plaintiff’s theory of recovery is
premised upon a claim of implied falsehood, a plaintiff
must demonstrate, by extrinsic evidence, that the
challenged commercials tend to mislead or confuse
consumers. It is not for the judge to determine, based
solely upon his or her own intuitive reaction whether the
advertisement is deceptive. Rather, as we have
reiterated in the past, ‘the question in such cases is--
what does the person to whom the advertisement is
addressed find to be the message?’ That is, what does
the public perceive the message to be.
The answer to this question is pivotal because,
where the advertisement is literally true, it is often
the only measure by which a court can determine whether
a commercial’s net communicative effect is misleading.
Thus, the success of a plaintiff’s implied falsity claim
usually turns on the persuasiveness of a consumer survey.
Id. at 287-98.
34
however, were excluded by the district court.14 Consequently, these
survey results provide no basis for the jury’s finding.
Second, Pizza Hut points to two additional surveys conducted
by Dr. Dupont that attempted to measure consumer perception of Papa
John’s “taste test” ads. This survey evidence, however, fails to
address Pizza Hut’s claim of materiality with respect to the
slogan. Moreover, the jury rejected Pizza Hut’s claims of
deception with regard to Papa John’s “taste test” ads--the very ads
at issue in these surveys.
Finally, Pizza Hut attempts to rely on Papa John’s own
tracking studies and on the alleged subjective intent of Papa
John’s executives “to create a perception that Papa John’s in fact
uses better ingredients” to demonstrate materiality. Although Papa
John’s 1998 Awareness, Usage & Attitude Tracking Study showed that
48% of the respondents believe that “Papa John’s has better
ingredients than other national pizza chains,” the study failed to
indicate whether the conclusions resulted from the advertisements
at issue, or from personal eating experiences, or from a
combination of both. Consequently, the results of this study are
not reliable or probative to test whether the slogan was material.
Further, Pizza Hut provides no precedent, and we are aware of none,
14
Pizza Hut has not sought review on appeal of the district
court’s ruling that the results of the box survey were
inadmissible.
35
that stands for the proposition that the subjective intent of the
defendant’s corporate executives to convey a particular message is
evidence of the fact that consumers in fact relied on the message
to make their purchases. Thus, this evidence does not address the
ultimate issue of materiality.
In short, Pizza Hut has failed to offer probative evidence on
whether the misleading facts conveyed by Papa John’s through its
slogan were material to consumers: that is to say, there is no
evidence demonstrating that the slogan had the tendency to deceive
consumers so as to affect their purchasing decisions. See American
Council, 185 F.3d at 614; Blue Dane, 178 F.3d at 1042-43; Sandoz
Pharm. Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 228-29 (3d
Cir. 1990). Thus, the district court erred in denying Papa John’s
motion for judgment as a matter of law.15
15
It is unnecessary to reach the issue of whether the district
court committed reversible error when it refused to submit Papa
John’s proposed special jury interrogatories on the essential
Lanham Act elements of materiality and injury. See supra note 2.
However, given our clear precedent that once a case is submitted to
the jury via special interrogatories, “the judge must submit all
material issues raised by the pleadings and the evidence,” the
correctness of the district court’s refusal to submit instructions
on these two essential issues is doubtful. Simien v. S.S. Kresge
Co., 566 F.2d 551, (5th Cir. 1978); see also Huddleston v. Herman
& MacLean, 640 F.2d 534 (5th Cir. 1981), aff’d in part and rev’d in
part on other grounds, 459 U.S. 375 (1983); Nance v. Gulf Oil
Corp., 817 F.2d 1176, 1180-81 (5th Cir. 1987); 9A Wright and
Miller, Federal Practice and Procedure § 2506 173-79 (1995)(stating
that “all material factual issues should be covered by the
questions submitted to enable a verdict to be rendered on the
entire dispute on the basis of the jury’s response”).
36
V
In sum, we hold that the slogan “Better Ingredients. Better
Pizza.” standing alone is not an objectifiable statement of fact
upon which consumers would be justified in relying. Thus, it does
not constitute a false or misleading statement of fact actionable
under section 43(a) of the Lanham Act.
Additionally, while the slogan, when appearing in the context
of some of the post-May 1997 comparative advertising--specifically,
the sauce and dough campaigns--was given objectifiable meaning and
thus became misleading and actionable, Pizza Hut has failed to
adduce sufficient evidence establishing that the misleading facts
conveyed by the slogan were material to the consumers to which it
was directed. Thus, Pizza Hut failed to produce evidence of a
Lanham Act violation, and the district court erred in denying Papa
John’s motion for judgment as a matter of law.
Therefore, the judgment of the district court denying Papa
John’s motion for judgment as a matter of law is REVERSED; the
final judgment of the district court is VACATED; and the case is
REMANDED for entry of judgment for Papa John’s.
Additionally, we note that the district court erred in
requiring Papa John’s to modify the Carney ads and the taste test
ads. The Carney ads were removed from the jury’s consideration by
Pizza Hut, and the jury expressly concluded that the taste test ads
were not actionable under section 43(a) of the Lanham Act. Thus,
the district court, lacking the necessary factual predicate, abused
its discretion in ordering Papa John’s to modify these ads.
37
REVERSED, VACATED, and
REMANDED with instructions.
38