Commercial Defamation and Trade Libel

While defamation can be applied to public figures as well as private, it doesn’t always target a person. Defamation against a business, or against an individual in a business setting, is known as commercial defamation. In today’s competitive business world, it is common for companies to say nasty things about their competitors in order to demonstrate why they are a better choice than their competitor for consumers to choose. Although most of us have come to expect advertisements which bash the opposition, such practices are only legal so long as they remain within the bounds of the truth. When a company goes too far and begins accusing its competitor of conduct which they have not participated in, then the competitor will have a valid basis to enlist a Chicago commercial defamation lawyer in bringing a lawsuit.

One problem that plaintiffs face when alleging defamation is that they must be able to prove that they suffered actual damage (usually financial losses) as a result of the defamation. This can be difficult to prove. Even if a company experiences a drop in stock prices, for example, following the release of a competitor’s defamatory advertisement, the company would still have to provide evidence that the drop in stock prices was a direct result of the advertisement.

Another requirement for defamation is that the person or company making the defamatory statement knew (or should have known) that the statement was false. If someone claims that the chief executive officer of a company was involved in a pyramid scheme and that person honestly believed that to be true, then she cannot be convicted of defamation. However, most courts will consider the source of the information and determine whether or not the person should have reasonably known that the information was false.

Trade libel is similar to commercial defamation except that, instead of attacking the company or people in the company, it attacks the quality of the company’s goods or services. As with commercial defamation, companies must be careful when using the drawbacks of a competitor’s goods in order to tout the benefits of their own products or services. If it can be reliably shown that it resulted in a transfer of customers to them from their competitor, the competitor may have grounds for a trade libel lawsuit. Our commercial defamation attorneys can advise Chicago clients on whether this may be the case in their circumstances.

Competing companies are not the only entities who need to be aware of trade libel lawsuits. With the dawn of the digital age, consumers have taken to the Internet to both praise and condemn the companies that they patronize. If a consumer posts a defamatory statement online about a product that they purchased, they could find themselves facing a lawsuit from the company that provided the product or service.

Likewise, companies need to be aware that, in order to be on the lookout for possible trade libel against their goods, they must look beyond information that their competitors might be spreading. Included in their search should be online reviews from consumers who have taken to the Internet to express their vitriol.

The Chicago commercial defamation attorneys at DiTommaso Lubin, PC have decades of experience both pursuing and defending commercial defamation lawsuits. Based in Elmhurst and downtown Chicago, our attorneys take cases from Aurora and Elgin and many other cities throughout Illinois. To consult with a knowledgeable commercial defamation lawyer in Chicago today, contact us online or you can call us at 630-333-0333.