Commercial Disparagement and Defamation

Commercial dispar agement a nd defamation ar e inher ently
“competitive” torts, involving injury to a competitor’s
reputation, or the reputation of its pr oducts or services. Acts of
commercial disparagement or defamation may be joined with
claims under sections 1 a nd 2 of the Sherman Act,
and may give
rise to claims under the Lanham Act,
state unfair competition
and the common law of tortious interference.
A. Introduction
This chapter focuses on the common law torts of commercial
disparagement and defamation. Although conceptually similar, these
torts address different types of conduct, have different elements and
evidentiary standards, and are subject to different defenses.
This chapter
. See, e.g., United States Healthcare, Inc. v. Blue Cross of Greater Phila.,
898 F.2d 914, 923-24 (3d Cir. 1990) (allowing plaintiff in comparative
advertising campaign to join disparagement and defamation actions with
Sherman Act claims); a ccord Fedders Corp. v. Elite Classics,
279 F. Supp. 2d 96 5, 969 (S.D. Ill. 2003). But see American Pro f’l
Testing Serv. v. Harcourt Brace Jovanovich Legal & Prof’l Publ’ns, 108
F.3d 1147, 1153 (9th Cir. 1997) (“While the disparagement of a rival or
compromising a rival’s employee may be unethical and even impair the
opportunities of a rival, its harmful effects on competitors are ordinarily
not si gnificant enough to warrant recognition under § 2 of the Sherman
. 15 U.S.C. § 1125(a). Section 43(a) is examined in Chapter III. Note that
the application of 15 U.S.C. § 1125(a) was called into question in Board
of Regents v. Phoenix Int’l Software, 653 F.3d 448, 458 (7th Cir. 2011)
(“[W]e doubt that either provision [subjecting the state to liability in
trademark actions brought by those injured by a state’s acts] would
survive a constitutional challenge in the Supreme Court.”).
. See Chapter III.
. See Chapter V.
. See gener ally RESTATEMENT (SECOND) OF TORTS § 623A cmt. g (1977)
PROSSER & KEETON ON THE LAW OF TORTS § 12 8 (5th ed . 1984)
[hereinafter KEETON].
92 Business Torts and Unfair Competition Hand book
also briefly examines First Amendment limitations on the regulation of
commercial speech, which may be relevant to the defense of such claims.
While the theoretical underpinnings of the law of disparagement and
defamation are reasonably well-defined, the ever-changing dimensions of
communication in the age of the internet urge greater caution than ever
before. As will be noted, “publication” is an essential element of
defamation and the ability to publish grows broader with each technical
innovation and improved device. The perils of the Internet are far beyond
the scope of this chapter, but the literature is rife with references that
should be consulted.
The risks to speakers are not just that a plaintiff will recover simple
damages. Defamatory statements have been held to give rise to antitrust
liability “especially when . . . combined with other anticompetitive
B. Commercial Disparagement and Defamation Distinguished
Although similarities exist between commercial disparagement and
defamation, the two are distinct torts.
While defamation law protects the
plaintiff’s character and reputation, disparagement law defends the
quality and reputation of the plaintiff’s products, goods, or services.
. See, e.g., Amy Kristin Sanders, Defining Defamation: Community in the
Age of the Internet, 15 COMM. L. & POLY 231 (2010); Skyler McDonald,
Defamation in the Internet Age, 62 FLA. L. REV. 259 (2010).
. West Penn Allegheny Health Sys. v. UPMC, 627 F.3d 85, 110 n.14 (3d
Cir. 2010), cert. denied, 132 S. Ct. 98 (2011).
. Compare RESTATEMENT (SECOND), supra note 5, § 558 with id., § 623A;
accord Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc., 3 14
F.3d 48 (2d Cir. 2 002) (“Under New York Law, slander and
disparagement of goods constitute distinct causes of action.”); Atiyeh
Publ’g v. Times Mirror Magazines, 2000 WL 1886574, at *4 n.2
(E.D. Pa. Dec. 7, 2000); Williams v. Burns, 540 F. Supp. 1243, 1247-48
(D. Colo. 1982); General Prods. Co. v. Meredith Corp., 526 F. Supp. 546,
549-54 (E.D. Va. 1981); Crinkley v. Dow Jones & Co., 385 N.E.2d 714,
719 (Ill. App. Ct. 1978); see a lso Hamlet Dev. Co. v. Venitt,
463 N.Y.S.2d 514, 515 (N.Y. App. Div. 1983 ) (“Although defamation
and disparagement in the commercial context are all ied in that t he
gravamen of both are falsehoods published to third parties, there is a
. See Neurotron Inc. v. Medical Service Ass’n o f Pa., Inc., 254 F.3d 444,
448-49 (3d Cir. 2001); U.S. Healthcare v. Blue Cross of Greater Phila.,
898 F.2d 914, 924 (3d Cir. 1990); Polygram Records, Inc. v. Superior
Court of California, 216 Cal. Rptr. 252, 254 ( Ct. App. 1985); Cuba’s

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