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4/27/2007
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The Cost Of User-Generated Content

Quiznos' attempts to be hip backfired, when ads comparing its sandwiches to rival Subway's resulted in an online quandary.

User-generated content may look like a free lunch, but it's not necessarily without cost, as sandwich chain Quiznos found out. Rival sandwich company Subway is fighting to hold Quiznos liable for false advertising under the Lanham Act for statements made in user-generated video commercials.

In October 2006, Quiznos partnered with online video site iFilm.com to challenge online video makers to create a Quiznos vs. Subway ad. The winner of the contest was promised $10,000, a year of free Quiznos food, and national airtime for the winning commercial. The site MeatNoMeat.com was set up for video submissions.

(MeatNoMeat.com now redirects to Quiznos.com, and there's no record of the contest site at Archive.org.)

Following the completion of the contest in December, Subway sued. The lawsuit initially took exception to Quiznos' aggressive television ad campaign comparing Quiznos' sandwiches to Subway's. It was later amended to include the user-generated online commercials, according to a Quiznos spokesperson.

Subway's parent company, Doctor's Associates, did not respond to a request for comment.

Unlike companies that publish their own content, companies that publish user-generated content are protected from liability by 47 USC 230, which is part of the Communications Decency Act.

But the judge in the case rejected Quiznos' motion to dismiss on those grounds, pending the presentation of additional evidence.

Subway's attorneys are seeking further information to determine whether Quiznos was ultimately responsible for the disputed statements in the ads. If they convince the judge that Subway's intellectual property rights under trademark law have been violated, Quiznos may not have the immunity it claims.

Eric Goldman, assistant professor at Santa Clara University School of Law, said the case has potentially broad implications. "Asking users to do work for you [doesn't] immediately provide insulation from what they do," he said. "Sometimes in the mania to engage in crowd sourcing, people might be tempted to overlook the legal liability issue, and they shouldn't."

Such sentiment doesn't appear to have dampened Quiznos' interest in user-generated content, however.

"Quiznos finds value in interacting with our guests over various platforms, and this contest was a fun way to reach out to certain Quiznos segments," a company spokesperson said in an e-mail. "Keep in mind that our fans were creating content long before and have continued to create content following the contest. We would still consider using user-generated content moving forwarding in fresh and compelling ways."

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