Trade libel — Intellectual Property Rights I Notes

Trade libel

Saying “my rival’s medicine is poison” is not just rude — if it is false and malicious and hurts his sales, it is a wrong the law calls trade libel (or malicious falsehood). It protects a trader’s goods, not his personal reputation.

What trade libel is

Trade libel — also called malicious falsehood, slander of goods, or trade disparagement — is a tort committed when one trader makes a false and malicious statement disparaging another trader’s goods or business, causing him damage. It is distinct from defamation (which protects a person’s reputation) — here the target is the goods/business.

The essentials:

• a false statement about the claimant’s goods or business;
• made maliciously (with knowledge of falsity or reckless disregard, or an improper motive);
• published to third parties; and
• causing actual (special) damage to the claimant (loss of custom).

Comparative advertising that merely puffs one’s own goods is lawful; it becomes trade libel when it falsely denigrates the rival’s goods. Contrast with infringement/passing off, which concern copying a mark, not disparaging goods.

Ratcliffe v Evans (1892): an action lies for “written or oral falsehoods, not actionable per se nor even defamatory, where they are maliciously published, where they are calculated in the ordinary course of things to produce, and where they do produce, actual damage.”

In Simple Terms: Trade libel is lying about a competitor’s goods, out of malice, in a way that costs him sales. It protects products (not persons), so it is different from defamation, and different again from trade-mark infringement, which is about copying a mark.

🧩 WORKED EXAMPLE — the disparaging ad

Facts. In an advertisement, Company B falsely claims that rival Company A’s soap “causes skin disease”, and A loses customers.

Rule. Trade libel — a false, malicious statement disparaging a rival’s goods causing damage is actionable.

Apply. The statement is false, published, aimed at A’s goods, and (given no basis) malicious, and it caused loss of custom — all four essentials are met.

Conclusion. A can sue B for trade libel/malicious falsehood; mere puffery of B’s own soap would not have been actionable, but false denigration of A’s soap is.

flowchart TD
    TL["Trade libel (malicious falsehood)"]:::root
    TL --> F["False statement about rival's goods"]:::leaf
    TL --> M["Malice"]:::leaf
    TL --> P["Publication"]:::leaf
    TL --> D["Actual damage (loss of custom)"]:::leaf
    TL --> DIFF["Protects goods, not the person (vs defamation)"]:::leaf
    classDef root fill:#FFF8DC,stroke:#000,color:#000;
    classDef leaf fill:#E6F3FF,stroke:#1E3A8A,color:#000;

Case Laws

• Ratcliffe v Evans (1892) — established the action for malicious falsehood causing damage to a trade or business.
• Reckitt Benckiser v Hindustan Unilever (2008) — comparative advertising that falsely disparages a rival’s product amounts to trade libel/disparagement and can be restrained.

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