Friday, July 27, 2007

Burger Ads with Angus Jokes Not Enjoined

This posting was written by William Zale, editor of CCH Advertising Law Guide.

In a Lanham Act false advertising case arising from hamburger advertising characterized by the federal district court in Santa Ana, California, as “aggressive and sometimes amusing,” the court declined to preliminarily enjoin Jack in the Box television commercials. The complaining competitor (CKE) failed to establish a likelihood of success on the merits and a balance of hardships tipping sharply in its favor.

The focus of the case was the source of the beef used in the hamburger patties of the competing fast food chains. Jack in the Box advertised a “sirloin burger.” CKE offered an “Angus burger” under its Carl's Jr. and Hardee's brands.

In a Jack in the Box commercial for its sirloin burger, “Jack” pointed first to the sirloin area of a cow and then, when asked by an employee to point out the “Angus area,” looked at the rear of the cow. In another commercial, laughter erupted when an employee asked “ Jack” whether people would find “our sirloin” more attractive than “their”

Consumer Perception Survey

CKE offered a consumer survey as proof that a statistically significant number of participants were misled by the Jack in the Box commercials into believing that Angus was a cut of meat rather than a breed of cattle, that Angus beef was an inferior type of meat, and that Angus emanated from the rear-end or anus of beef cattle. The court gave the survey very little weight because its questions were leading. In addition, the court found that the survey was worded in such a way as to obscure whether any inference suggested by the commercial was negated because the consumer understood the joke.

Because CKE did not argue that the statements made in the challenged commercials were literally false, proof was needed that the advertising actually conveyed implied messages that deceived a significant portion of viewers. Contrary to CKE's contention, deception could not be presumed because the commercials were not found to have been intentionally created to persuade customers into misbelieving that any cut of “Angus beef” was inferior to “sirloin beef.” Without substantial extrinsic evidence that a significant portion of the commercial audience was deceived or evidence of intent to mislead consumers, the court held CKE to a higher standard in the balancing of hardships to determine whether the advertising should be preliminarily enjoined.

Materiality, Harm

CKE failed to establish a likelihood that the Jack in the Box television commercials for were materially deceptive or likely to harm CKE, in light of the results of CKE's consumer survey and the commercials' lack of an explicit comparison to CKE's product, the court determined. While CKE's survey indicated that 17 percent of consumers were less likely to buy hamburgers made with Angus beef, the survey also revealed that 14 percent of consumers were more likely to buy hamburgers made with Angus beef. This undermined any interpretation of the survey as establishing that the CKE was significantly harmed, the court said.

Harm could not be presumed on the theory that the commercials constituted comparative advertising because the commercials did not make a direct comparison to CKE's product. The commercials merely referred to “our competitor's product,” the court noted.

Unclean Hands

The court did find that Jack in the Box was unlikely to succeed in asserting a defense of unclean hands against CKE. Jack in the Box contended that CKE's commercials used a tongue-in-cheek style to attack competitors in a manner comparable to the Jack in the Box commercials at issue. This contention was rejected because the Jack in the Box commercials, which potentially implied that CKE's “Angus burgers” were made from an unsavory cut of meat, went further than any suggestions raised against competitors by CKE in its commercials, according to the court.

Full text of the July 2 opinion in CKE Restaurant v. Jack in the Box, Inc. will appear at CCH Advertising Law Guide ¶62,592.

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