Legal Memorandum: Definition of Trade Libel

Issue: Definition of Trade Libel.

Area of Law: Antitrust & Trade Regulation, Business Organizations & Contracts
Keywords: Trade libel; Injurious falsehood
Jurisdiction: Federal
Cited Cases: 578 F.2d 691
Cited Statutes: Restatement (Second) of Torts § 626, cmt. a (2006), 651, 649, 650A
Date: 11/01/2006

The particular form of injurious falsehood that involves disparagement of the quality of another’s goods or services is commonly called “trade libel.”  See Restatement (Second) of Torts § 626, cmt. a (2006).  The Restatement sets out the burden of proof in a trade libel case, as follows:

(1) In an action for injurious falsehood the plaintiff has the burden of proving, when the issue is properly raised,


(a) the existence and extent of the legally protected interest of the plaintiff affected by the falsehood;


(b) the injurious character of the falsehood;


(c) the falsity of the statement;


(d) publication of the falsehood;


(e) that the circumstances under which the publication was made were such as to make reliance on it by a third person reasonably foreseeable;


(f) the recipient’s understanding of the communication in its injurious sense;


(g) the recipient’s understanding of the communication as applicable to the plaintiff’s interests;


(h) the pecuniary loss resulting from the publication;


(i) the defendant’s knowledge of the falsity of the statement or his reckless disregard as to its truth or falsity;