Northern Foods subsidiary Green Isle, which manufactured pies for Birds Eye under licence until last July, began an on-pack promotion in January on both its chicken and minced beef & onion pies featuring the claim in letters as large as the McDougalls logo.
The claim was supported by a subsidiary flash stating 'more chicken' or 'better filled' and promised a money-back guarantee, with the offer ending on 30 September 2012.
But Birds Eye said the promotion was "misleading, disparaging and an infringement of the Birds Eye trademark".
In a letter to retailers on 2 March, Birds Eye added these actions were "contrary to the Comparative Advertising Directive" and had "initiated legal action in the High Court".
After Birds Eye disclosed plans to alter its recipes, which would instantly invalidate the McDougalls claims, a court order agreement was reached stating that from 12 April, Green Isle could not sell "any products bearing the words 'Better than Birds Eye'", the letter added. The claim for trademark infringement is ongoing.