Friday, August 15, 2008

Restaurant “Location” Ads Held Deceptive

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

The operator of a single “Chicago Pizza” restaurant violated the Illinois Deceptive Trade Practices Act by advertising separate telephone numbers for multiple “locations,” two of which corresponded to locations of a competitor's “Chicago Pizza” restaurants, an Illinois appellate court has ruled.

Likelihood of Confusion

The single-location operator's trade practices created a likelihood of confusion or misunderstanding, the court held. Adding to the confusion, many of the ads and coupons that touted multiple “locations” did not include the operator's own address. The operator unsuccessfully contended that it did not “pass off” its services as those of the competitor because the words “Chicago’s Pizza” were generic and descriptive of the parties’ location and goods.

While the operator blamed customers for their own “mistakes,” the operator's ads caused their confusion, according to the court. The competitor proved not only a likelihood of confusion or misunderstanding as a result of the advertisements and coupons, as required by the Act, but also actual confusion by customers. For example, an established customer of the competitor testified that the single-location operator's employee told him he was ordering from the “Wilson location,” when the competitor, not the operator, had a restaurant on Wilson Avenue.

In another example noted by the court, a regular customer of the competitor called one of the advertised numbers because he wanted the telephone number for the competitor's Lincoln Avenue location. The customer testified that when he ordered a pizza, he believed he was doing business with an affiliate of the competitor. When he called to complain about the poor quality of the food, an employee of the single location operator offered him a discount at the Lincoln Avenue “location,” even though the competitor, not the single-location operator, had a restaurant on Lincoln Avenue.

Injunction, Award of Attorney’s Fees

The competitor was entitled to injunctive relief under the Deceptive Trade Practices Act to stop the practices that perpetuated the potential for confusion. In addition, because the single-location operator willfully engaged in deceptive trade practices, the competitor was entitled to an award of reasonable attorney's fees.

The competitor's failure to prove actual damages precluded any award of damages or injunctive relief under the Illinois Consumer Fraud Act, even though it contained a provision that a violation of the Deceptive Trade Practices Act also violates the Consumer Fraud Act.

The August 7 decision in Chicago’s Pizza, Inc. v. Chicago’s Pizza Franchise Ltd. USA, will be reported at CCH Advertising Law Guide ¶63,088.

No comments: