Trade Libel: A Legal Guide

business law What is trade libel? It’s the act of lying about a business or product — and instances are skyrocketing because of online reviews.

The Basics Of Libel Law

Standard defamation rules apply in trade libel lawsuits. Plaintiffs must prove that:

  1. The materials in question are provably false and unprivileged statements of fact;
  2. The defendants’ statements caused financial or reputational harm; and
  3. The defendants didn’t properly fact check before publishing or broadcasting the report.

Specifics Considered In Trade Libel Lawsuits

What must people prove to win business defamation claims?

  1. As is the case with most slander and libel claims, plaintiffs must provide evidence of monetary damages.
  2. Plaintiffs must prove that the defendants acted intentionally.
  3. Trade libel claimants can seek compensatory damages, punitive damages, and injunctive relief.

Defenses Against Trade Libel

  1. Defendants who can prove that they didn’t publish or broadcast the comment have a great shot at winning.
  2. Tyrion Lannister explained it best, “It’s not slander if it’s true.” Defendants who can prove truth typically win.
  3. A successful trade libel claim requires proof of harm. If plaintiffs can’t show how statements directly led to profit loss, the likelihood of winning is slim.

The Lanham Act & Trade Libel

“Any person who…in connection with any goods or services…uses in commerce any…false or misleading description of fact, which…in commercial advertising or promotion misrepresents the nature, characteristics, or qualities…of his or her or another person’s goods, services or commercial activities…shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.”

The above quote is an excerpt from the Lanham Act, the nation’s false advertising law that prohibits intentional and unsubstantiated product and professional disparagement.

Competition is healthy, and competitors can compare products. Criticizing rivals’ products, based on personal tastes or preferences, is allowed. But, if someone makes a statement in bad faith, all privileges disappear.