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'Weiner Wars' Highlight Evolving Trends in Marketers’ Use of Legal Challenges

8 Sep, 2011 By: Mikhia E. Hawkins, Jeffrey D. Knowles, Venable LLP’s Advertising

A legal dust-up that began more than two years ago between two leading U.S. hot dog purveyors is starting to sizzle. In lawsuits filed in a federal district court in Illinois, Sara Lee Corp. and Kraft Foods both allege that the other made false claims in advertising its hot dog products. The lawsuits also demonstrate the increased willingness of consumer product companies to bring their market wars into legal forums.

The beef between the two hot dog giants began in May 2009, when Sara Lee filed a complaint challenging Kraft Foods’ claims that its Oscar Mayer® brand Jumbo Beef Franks are “100% pure beef,” as well as claims that its hot dogs beat Sara Lee’s Ball Park® franks in a national taste test. Sara Lee argues that Kraft’s Oscar Mayer Jumbo Beef Franks are in fact not 100-percent pure beef, as they contain other ingredients, including water and curing agents. Sara Lee further alleges that the Oscar Mayer ads were flawed, and that Kraft’s ads implied that Oscar Mayer Jumbo Beef Franks prevailed in a taste test against the entire Ball Park product line, when in fact only one Ball Park hot dog product was tested.

Kraft responded to Sarah Lee’s charges with a lawsuit of its own. In its countersuit, Kraft alleges that Sara Lee falsely promoted its Ball Park line of hot dogs as “America’s Best Tasting Franks” based on an award from ChefsBest, although the award was given only to three specific Ball Park franks.

This dogged legal battle exemplifies the increasingly common use of legal actions by marketers attempting to gain a competitive advantage over their rivals. Legal disputes and threats of legal action are now integral components of some companies’ business strategies. The trend may reflect a lasting recognition among marketers that legal challenges can be powerful tools in market competitions.

In addition to the courts, some marketers also make use of other dispute resolution channels, such as self-regulatory bodies. The National Advertising Division (NAD) and the Electronic Retailing Self-Regulation Program (ERSP) – two self-regulatory entities administered by the Council of Better Business Bureaus – handle numerous advertising disputes.

Each self-regulatory body reviews disputed advertising claims and, if it finds that any of the claims are misleading, can recommend that advertisers modify or discontinue the claims. The NAD’s and ERSP’s decisions are not legally binding and the entities cannot award monetary or injunctive relief. Nonetheless, marketers have a powerful incentive to comply with NAD and ERSP rulings as failure to do so can result in the matter being referred to the Federal Trade Commission (FTC) or another government regulator.

Companies whose claims are challenged by a competitor, either in the courts or before a self-regulatory body, are increasingly willing to challenge their accuser’s own claims, as was the case in the Sara Lee v. Kraft Foods case. Accordingly, businesses that plan to challenge a competitor’s marketing practices should identify and mitigate any of their own practices that are vulnerable to attack.

Jeffrey D. Knowles is a partner at Venable LLP and chair of the firm’s Advertising, Marketing and New Media Group. Mikhia Hawkins is an associate at Venable LLP. They can be reached at (202) 344-4000, or via E-mail at [email protected] and [email protected].

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