DALLAS (AP) -- Papa John's may have to fork over some dough to rival Pizza Hut due to a federal jury's finding it made false and deceptive claims in a spirited ad war between the eateries.
The eight-member jury on Thursday also found response ads by industry leader Pizza Hut false and misleading, but U.S. Magistrate William F. Sanderson Jr. doubted Pizza Hut will be sanctioned.Pizza Hut, which filed the original lawsuit last year before Papa John's countersued, is seeking $12.5 million in damages. Sanderson set the penalty phase for Nov. 29.
Observers said the verdict's larger effect would be to stop Papa John's International Inc., based in Louisville, Ky., from using its slogan "Better Ingredients, Better Pizza" in a $300 million campaign. The company put the slogan in advertisements and on everything from its pizza boxes to its stationery.
"If there's been a finding that the ad is false and deceptive, your lawyer should tell you to immediately stop running it," said Michelle Roberts, a Dallas attorney who represented a manufacturer in a similar dispute. "If you don't, you might increase the amount of damages."
Pizza Hut sued over the "Better Pizza" slogan, and over ads that compared ingredients used by the chains. One ad found false and deceptive by the jury contended that while Papa John's uses filtered water, Pizza Hut uses tap water. It showed water dripping from a rusty pipe.
Papa John's countersued over ads that used an image of its chief executive, John Schnatter, and suggested the upstart chain used old dough. Papa John's says it lets its dough rise for several days before baking the pizza crust.