The tort of product disparagement is very closely related to the tort of business defamation. However, product disparagement provides a cause of action to businesses when it can prove that it was harmed by false statements that disparaged its product, not necessarily a statement that disparaged the business’s reputation.
Both common law and statutory causes of action exist for product disparagement claims. The common law claim is available pursuant to rules from the Minnesota Court, whereas the statutory claim is available under the Minnesota Uniform Deceptive Trade Practices Act (“MUDTPA”).
Common Law Product Disparagement
Although there are no distinctive elements of the claim because this is such a rare tort, a comprehensive list of approximately seven elements must exist in order to go forth with the product disparagement claim:
- the defendant made a false or misleading,
- statement of fact,
- about the plaintiff’s goods or services,
- that was published,
- with malice, and
- that caused the plaintiff to incur special damages. The most important of these elements is whether or not special damages exist. As stated, Minnesota courts have not issued a lot of decisions regarding product disparagement under the common law.
MUDTPA Statutory Claims for Product Disparagement
The MUDTPA states it is an unlawful, deceptive trade practice when “in the course of business, vocation, or occupation” a person “disparages the goods, services, or business of another by false or misleading representation of fact.” Minn. Stat. § 325D.44, Subd. 1 ¶ 8.
Under MUDTPA, a plaintiff must show that a defendant:
- in the course of the defendant’s business, vocation, or occupation,
- made a false or misleading,
- representation of fact,
- that disparaged the plaintiff’s goods, services, or business, and
- that the plaintiff is “likely to be damaged” by the false representation. Minn. Stat. § 325D.44-45.
False and Misleading Representation of Fact and Disparagement
Minnesota courts have not provided a lot of case law that defines the terms “false and misleading representation of fact” or “disparaged” and have hinted that any interpretation of these definitions under the statute should coincide with interpretations of these words in common law.
In the Course of Business, Vocation, or Occupation
As stated, a plaintiff must establish that the defendant made the disparaging statements about the product in the course of the defendant’s business, vocation, or occupation. In Northwest Airlines Inc. v. Friday, 617 N.W.2d590 (Minn. App. 2000), the wife of a former Northwest pilot emailed a press release attaching a complaint wherein the wife and the pilot had brought suit against Northwest for alleged whistleblower retaliation. Northwest sued the wife for defamation and business disparagement because the complaint alleged that the pilot was determined unfit for duty as a commercial aviator because he had made complaints about Northwest’s lack of safety. Ultimately the court dismissed Northwest’s claims under MUDTPA because the press release that was sent by the wife was not done as part of her vocation, business, or occupation. However a plaintiff in an MUDTPA case does not necessarily need to show that the defendant is a competitor. The statute specifically states that a complainant “need not prove competition between the parties” to prevail under the MUDTPA. Minn. Stat. § 325D.44, Subd. 2.
Likely to be Damaged
A plaintiff must show that it is likely to be damaged in order to obtain injunctive relief under the MUDTPA. This is because any action under the MUDTPA is only sustainable if it is directed at preventing future harm, because the MUDTPA does not compensate a plaintiff for past harm. Therefore, for a plaintiff to be successful under this element, they must be able to show evidence that they would suffer future harm. Any evidence that establishes that they had been harmed in the past will not satisfy this element. But, a plaintiff does not need to show proof of special damages. Minn. Stat.§ 325D.45, Subd. 1.