Justice Murray Wilcox, of the Federal Court, has dismissed an application by fastfood giant Pizza Hut for an injunction against Eagle Boys Dial-Pizza. The application, which was filed yesterday, sought an end to the Brisbane-based firm's advertising campaign, which highlights the fact that Eagle Boys is an Australian-owned company while branding Pizza Hut a US-owned multinational.

The court decided that the injunction would not be given because it would financially harm Eagle Boys more than sales at Pizza Hut could be hurt than the adverts. One ad launched in May depicts Tom Potter, Eagle Boys' founder, dumping a Pizza Hut box on a US Airlines trolley near a plane while saying: "Is it from a 100% Australian-owned company? Because if it's not, your money's getting delivered overseas."

Pizza Hut counsel, John Nicholas SC, maintained however that the campaign breached both the Trade Practices Act and Copyright Act, and that its appeal to "patriotism" at Eagle Boys was "likely to affect the buying habits of the target audience."

He said the campaign would damage sales dramatically because of its implication that "when you go to Pizza Hut you're not dealing with a local company, but with a multinational." Furthermore, "what it insinuates is that the whole of revenue is going abroad or at least a substantial proportion of it."

Critics of the ruling have pointed out that while Pizza Hut is ultimately controlled by US giant Tricon Restaurants International, the chain consists of franchised outlets, more than two thirds of which are owned by Australians, providing local employment and purchasing domestic produce.

Justice Wilcox maintained however that it is "naïve" to suggest that Pizza Hut is not a multinational company, and argued that even if franchisees are "true blue" Australians, least A$6 of every A$100 is going to the US.

A final hearing on the issue has been planned for 11 July this year.