• What Does the Subway-Quiznos Settlement Mean for the Future of User-Generated Videos?
  • March 19, 2010
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • This closely watched case involving the intersection of the Communications Decency Act (“CDA”) and the Lanham Act has settled, soon after the court denied defendant’s motion for summary judgment.  Doctor's Assocs. Inc. v. QIP Holder Inc., D. Conn., No. 3:06-cv-1710, settlement 2/23/10.  In its opinion, the U.S. District Court for the District of Connecticut held that it could not conclude, as a matter of law, that the defendant was not responsible for the creation and development of user-generated videos that the plaintiff alleged contained false and misleading claims about its products.

    The case involved an advertising campaign conducted by Quiznos highlighting the differences between its sandwiches and those of its direct competitor Subway.  Quiznos produced its own commercial comparing its products to Subway’s and created a Web-based contest called the “Quiznos vs. Subway TV Ad Challenge.”  The contest, which was accessible via three domain names, including  “meatnomeat.com,” invited entrants to create videos demonstrating why they think Quiznos is better, which Quiznos would post on the site.  Quiznos also posted four sample videos of its own creation. 

    The contest included Official Rules, which transferred ownership of the videos to Quiznos.  The Rules also prohibited “disparaging statements” about Quiznos and Subway or either of their products.  Notwithstanding the fact that Quiznos undertook to vet all entries prior to posting them, several videos were posted that Subway claimed included false and misleading statements about its products, including claims that Subway’s sandwiches didn’t include much meat and were stale. 

    Subway brought a false advertising action against Quiznos under Section 43(a) of the Lanham Act and the Connecticut Unfair Trade Practices Act, arguing that Quiznos was responsible for the content of the contest entries and therefore responsible for the false claims about products contained in them.  Quiznos defended the action on the ground that it was immune from liability for the videos under the CDA, which provides, in pertinent part, that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  An “information content provider” is defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.” 

    Here the critical issue was whether Quiznos merely published the users’ contest-entry videos or was actively responsible for the creation and development of the allegedly false and disparaging claims contained in the videos.  In denying defendant’s summary judgment motion, the court concluded that the meatnomeat.com domain name, the sample videos posted by Quiznos to “shape” the contest submissions, and Quiznos’s express invitation to contestants to submit entries demonstrating why Quiznos is better all could lead a reasonable jury to conclude that Quiznos actively solicited disparaging content and thus was responsible for the creation and development of the videos and therefore not immune from liability under the CDA. 

    Why it matters: Although the settlement of the case still leaves significant questions open about the intersection of the Lanham Act and the CDA, the court’s opinion leaves no doubt that advertisers that solicit user-generated content, particularly content making comparative claims against competitors, should be mindful of the risk of being treated as the creator of that content and thus unable to claim immunity from liability.  Certainly, relevant factors would be the direction provided to users about the type of claims desired, examples provided on the site to users, and how vigorously the advertiser enforces its posting guidelines (or, in the case of a contest involving user-generated contest, its Official Rules).