Product Disparagement as a Cause of Action in New York

Product disparagement, also known as trade libel or commercial disparagement, is a legal claim that arises when someone makes false statements that damage the reputation or sales of a product or piece of property. In New York, this cause of action is distinct from defamation, as it specifically targets falsehoods about goods rather than individuals or companies. To succeed on a product disparagement claim, a plaintiff must prove four key elements.

Falsity of the Statement

The first requirement is that the statement made about the product or property was false. This means the information must be objectively untrue, not just a negative opinion. For example, saying a smartphone has a “bad design” is a matter of personal opinion and generally not actionable. But claiming the phone explodes during normal use, when it does not, would be considered a false statement. The plaintiff bears the burden of proving the falsity of the statement.

Publication to a Third Person

The second element is that the false statement was communicated to at least one person other than the plaintiff. This “publication” can be verbal, written, or even posted online. It does not need to be widely shared, but there must be evidence that someone else heard or read the false claim. The rationale behind this element is that private insults or disputes do not harm a product’s reputation unless others are made aware of them.

Malice

The third requirement is malice, which can be either express or implied. Express malice means the statement was made with the intent to cause harm. Implied malice exists when the statement is made with reckless disregard for the truth. This element protects people’s right to criticize products honestly and requires plaintiffs to show that the defendant either knew the statement was false or failed to check its accuracy when they should have.

Special Damages

The fourth and final element is special damages. This means the plaintiff must show actual financial loss caused by the false statement. It is not enough to prove reputational harm or embarrassment. The plaintiff must provide specific details such as lost customers, canceled contracts, or a decline in sales that can be tied directly to the disparaging remark.

Conclusion

Product disparagement claims are meant to protect businesses and individuals from false and damaging claims about their goods or property. While the law respects the right to criticize or share opinions, it draws a clear line when falsehoods lead to financial harm. In New York, a successful product disparagement claim must demonstrate a false statement, publication to a third party, malicious intent or recklessness, and concrete financial losses. This cause of action helps ensure that competition remains fair and that products are judged on their true merits, not on misinformation.

Find the Law

“[P]roduct disparagement is an action to recover for words or conduct which tend to disparage or negatively reflect upon the condition, value, or quality of a product or property, and . . . the elements of a product disparagement which must be proven are: (1) falsity of the statement; (2) publication to a third person; (3) malice (express or implied); and (4) special damages (44 NY Jur 2d, Defamation and Privacy § 273 [footnotes omitted]).” Thome v. Alexander Louisa, 70 A.D.3d 88, 105 (N.Y. App. Div. 2009)