January 29, 2008

Litigation, Consumer-Created Content and Advertising [7:49 am]

With echoes into other domains of user-created content: Can a Sandwich Be Slandered?

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.”

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