How to Sue a Competitor for Commercial Disparagement?
Commercial disparagement – also known as product disparagement – is false advertising and a form of defamation applicable to business entities.
Businesses often draw a comparison between their products or services and their competitor’s. However, when a business entity ends up making false or misleading statements about the competitor’s products, they can be sued for trade disparagement.
What is commercial disparagement?
Commercial disparagement occurs when someone makes a false statement about a business’ products or services with the intent to cause financial loss to that entity.
When a business becomes a victim of product disparagement, it can sue the competing entity under the federal Lanham Act, the federal trademark law, and state trade disparagement laws.
Often, businesses file commercial disparagement claims when any of the following occurs:
- False or misleading statements about quality, prices, and other aspects;
- The advertisement contains inaccurate or deceptive claims;
- A competitor makes false accusations of dishonesty or bad business practices;
- A business entity advertises its products or services using symbols, phrases, logos, designs, colors, or other elements of advertisement very similar to those of their competitor; and
- A competitor posts negative statements or comments about another business in the media or on the Internet.
How to prove a commercial disparagement claim?
A business must prove three elements to hold another entity liable for false advertising, defamation, or product disparagement:
- The defendant made a false or misleading statement;
- The statement was made with the intent to cause financial loss to the plaintiff; and
- The defendant knew that the statement was false or misleading or acted with malice or reckless disregard when making the statement.
It can be difficult to prove a commercial disparagement claim, which is you should seek legal help from a skilled unfair competition attorney in Georgia. Our attorney at Carroll Law Firm can help you seek compensation for the resulting damages and losses.
Seeking compensation for product disparagement in Georgia
Unlike defamation claims, commercial disparagement claims are exclusive to businesses. In other words, only a business entity can bring a trade disparagement claim.
Trade disparagement laws are designed to protect the business entity’s financial and property rights rather than their reputation. However, the harmed business is still required to prove that the defendant made false or misleading statements intentionally or knowingly.
If you pursue a commercial disparagement claim under the Lanham Act, you can obtain an injunction against false or misleading advertising and recover damages such as lost profits. Note: You cannot sue consumers under the Act, only competing businesses.
Atlanta unfair competition attorney Stacey Carroll is committed to helping his clients navigate state and federal trade disparagement and defamation laws. If your business has become a victim of product disparagement, the first step would be to send an initial letter demanding the competing business to stop the false or deceptive advertising.
If the competitor keeps making false claims about your business, products, or services, our lawyer will help you obtain a court-ordered injunction and prepare your case to go to trial.