Marketing and all things related

Will the rules of user-generated content change in the near future?  It's possible depending on the outcome of a lawsuit Subway filed against Quiznos.  Quiznos has been putting a lot of effort into boosting sales, and it seems that the company created a clever contest which asked consumers to submit their homemade videos showing why Quiznos is better than its top competitor, Subway. 

Quiznos teamed up with iFilm (owned by Viacom [NYSE: VIA.B]) to show the entries on the meatnomeat.com website.  That website has since been disabled but you can find some of the video entries on YouTube (like the one included in this post, many of them are very funny).  Approximately 115 user-generated videos were submitted, all of which showed Quiznos as far superior to Subway.  Suffice it to say, Subway wasn't happy and a lawsuit quickly surfaced against Quiznos and iFilm.

Quiznos, naturally, is claiming they did nothing wrong since all of the videos were created by consumers, but Subway claims that Quiznos encouraged a form of false advertising.  It will be interesting to see how this court case turns out.  Will user-generated contests and viral marketing as a whole see new restrictions and other changes in the near future?

What do you think?  Should companies like Quiznos who initiate these types of user-generated content contests asking for consumers to demonstrate why one brand is better than another take responsibility for the content created by having more control over the content with restrictions and limitations, or does that fly in the face of the social web?  Or should companies like Subway relax (maybe they're jealous that they didn't think of this clever campaign)?  What do you think is the best answer to this debate?