If You Have Nothing Nice to Say...

You’ve undoubtedly heard the old adage, “If you have nothing nice to say, say nothing”. It applies to your business too.

Over the past few weeks, I’ve been asked several times by clients about defamation. They have someone saying (or writing) false statements about their companies and they want to know what they can do.

Most people understand the basic idea behind defamation, but humor me for those of you who don’t. Defamation occurs when someone makes a statement or claim to a third party about a person or company that sounds like it is a factual statement or claim that is, in fact, false. This is known as common law defamation, libel or slander.

So, if you own Bobby’s Burgers and a competitor starts spreading a rumor that cockroaches were found in your burgers (and this is untrue), most people understand that this is actionable as defamation. If it is written down (in a letter, email, advertisement, etc.) it’s known as libel. If it is spoken, (which is MUCH harder to prove) it’s slander.

If you want to remember, think of this:

Spoken = S = Slander
Written down or Literary = L = Libel

(Hey, it makes you sound smarter if you actually say it right....)

So, now you know all you need to know, right?

Nope.

Ok, don't get upset. What else do you need to know?

Most importantly, you need to know that common law defamation laws are not your biggest problem. Pay close attention here....

If you’re the competitor that was spreading the rumor, I’m sure that you’re thinking, “Well, what I say about my competitor’s business is true. One guy did find a cockroach in his burger. I’m protected.”

OR

“My customers know I’m just kidding when I said that there were roaches in the burgers at Bobby’s Burgers. I can’t be held liable.”

OR

“Well, I didn’t say it. My employee was just talking to a customer about what makes us a better burger. I can’t control what he says.”

I hate to break this to you, but you’re WRONG. And finding out that you were wrong can be costly. Defending a lawsuit can cost from the tens of thousands into the hundreds of thousands of dollars.

There are many laws that protect companies from defamation, but the one that is the most insidious is the Lanham Act (15 USC 22).

Ok, ok, before you jump all over me, I know that it’s the act that governs trademark law. That’s what I do.... Sheesh!

But the Lanham Act provides a remedy for something called “trade libel”. It says, in pertinent part, the following:

“Any person who...in connection with any goods or services...uses in commerce any...false or misleading description of fact, which...in commercial advertising or promotion, misrepresents the nature, characteristics, or qualities...of his or her or another person's goods, services or commercial activities...shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such act.”

Did you read that carefully?

Read it again.

What it essentially means that if someone in your company says something misleading or false about another company, you could be in BIG trouble.

It is very important to understand that what qualifies as misleading is very much in the eye of the beholder. Comparing your products to another company’s products that shows the other company’s products in an unfavorable light, could land you in a heap of trouble.

Before you speak to other people, or write anything down about a competitor, ask yourself a couple of questions:

1. Is what I’m about to say false or misleading in any way?

2. If the person that I’m talking to were to go back to the competitor, would what I’m saying likely be exaggerated in reporting to the competitor or other people?

3. Am I about to make a statement that compares the other business unfavorably to mine?

4. Am I making a statement that could be interpreted as a negative fact about someone else’s business?

If so, don’t. Stop yourself. Don’t let your employees do it either.
Hang on. I hear you yelling already....

So, how do you market your business if you can’t compare your company as being better than companies that also do what you do? Well, if you can’t only market your business by saying positive things about your own product or service without unfavorably comparing your competitors to you, stick to what is referred to as “puffery”.

The legal term “puffery” is generally used in reference to testimonials and the like. Puffery statements are claims that are subjective rather than objective in their view and are not likely to be taken as a statement of literal fact. The Federal Trade Commission (or FTC) defined puffery as a “term frequently used to denote the exaggerations reasonably to be expected of a seller as to the degree of quality of his product, the truth or falsity of which cannot be precisely determined.”

You know the statements. They sound like this. “Bobby’s Burgers are the world’s best!” or “Bobby’s Burgers are the greatest!”

So, what does this really all mean to you?

Just like I said before. If you have nothing nice to say about a competitor, say nothing at all.