Another tech libel fight is percolating. This time, prominent 3-D printer manufacturer, CobbleBot LLC. (“CobbleBot”), is arousing discord amongst backers and tech trendsetters. The situation is instructive in that it illustrates what is — and isn’t — a viable internet defamation case.
3-D Printing Virtuosos
Based in Houston, TX, CobbleBot is one of the main players on the 3-D printing scene. After a wildly successful Kickstarter campaign, which raised upwards of US$300,000 from over 1,000 sponsors, CobbleBot began producing large, exceptionally precise 3-D printers for only $299 a pop. The company promised to ship orders by March 2015, at the latest.
Shipping Issues Lead to Online Gripes
Though CobbleBot has produced and shipped many of the promised printers, the company has also dropped the ball on orders. And you know what happens when customers aren’t satisfied – especially when they’ve prepaid: RANT ON THE INTERNET!
Support Letter Legal Warning
One early CobbleBot supporter was particularly vocal about his discontent, and after inquiring about his missing printer a carefully worded letter landed in his mailbox. An excerpt:
Got a letter saying that the legal department puts holds on orders related to anyone that they MAY be defamatory. Are clear to say that “Keep in mind that the support department does not have access to the legal department’s records, so we don’t know anything for certain. We are just attempting to explain the type of hold that we saw placed on your account and what that typed of hold means.”
Under Texas defamation law, certain things are considered defamatory per se including “falsehoods that injure one in his office, business, profession, or occupation (Main v. Royall, 348 S.W.3d 318,390)
Bluntly speaking, CobbleBot’s letter ranks on the disingenuous spectrum. After all, defamation and trade libel attorneys understand that negative customer opinions don’t meet the slander or libel bar under Untied States law.
What CobbleBot Would Need To Prove To Win A Defamation Case Against Online Detractors
Judging from reports, some customers’ dissatisfaction with CobbleBot is justified. After all, they ordered printers that never shipped. And thanks to the First Amendment and U.S. case law, mere negativity does not amount to libel; neither does the awful truth.
To emerge victorious in an internet defamation case, plaintiffs must prove that defendants:
- Made a false statement(s) of fact about the plaintiff;
- Referred to the plaintiff in the statement(s);
- Acted with reckless disregard for the truth, negligence or actual malice; and
- Caused material harm to the plaintiff via the contested statement(s).
Speak With An Internet Defamation Case Attorney
Kelly / Warner maintains an active – and highly successful – internet defamation legal practice. A pioneer in the field, our attorneys have won hundreds of cases. Often, we’re able to clear up a situation within a matter of weeks. To learn more about our online libel practice, click here. To speak with an experienced internet defamation lawsuit, get in touch.
The longer you wait, the longer the situation will fester. Take action.
International online defamation is one of the technology law issues d’jour. In the United Kingdom, Parliamentarians are battling it out over a new statute; Canada’s high court recently made the maple-leaf country’s first ruling on the liability of hyperlinks; and here in the United States, yet another Twitter libel lawsuit was withdrawn before it got to trial.
Hyperlinks Not Defamatory In Canada
Crookes v. Newton
After 15 years of widespread Internet use, the Supreme Court of Canada released a judgment on Crookes v. Newton, the country’s first decision on hyperlinking. At the crux of the case was Canada’s “publication rule” as it relates to defamation. Traditionally, the law of Canada’s land faulted any individual or entity that repeated or published defamatory content. In Crookes v. Newton, judges were asked to decide if placing a hyperlink to libelous information on a blog, website or social media platform constituted “publication.”
Unlike many defamation lawsuits, the facts of Crookes v. Newton were surprisingly straight forward: Jon Newton operated a multi-topic blog out of British Columbia. His website contained “deep” and “shallow” links to information about Wayne Crookes – information Crookes claims is false. Looking to clear his good name, Crookes sued Newton for defamation, arguing that the links constituted publication.
Court Says Merely Linking To Defamatory Content Isn’t Defamatory In It Of Itself
After much deliberation, however, Canada’s high court ruled that a strict “application of the publication rule [sic] is like trying to fit a square archaic peg into a hexagonal hole of modernity.” The majority judges agreed that a “deep” or “shallow” link, in it of itself, does not constitute publication and is analogous to a foot- or end-note. That being said, the ruling panel also made it clear that links near or around accusatory text “may still be considered publication and therefore defamatory” – not because of the reference link, but because of the surrounding context. In other words, in the court’s mind, a link by itself is A-OK, but if you write a summary or commentary about the information in the link, then you’re still on the defamation hook.
While the court’s decision is ostensibly forward thinking, they did leave a lot of bytes on the bench for later consideration, and pointedly mentioned that the ruling did not account for “newer” technologies, like automatic hyperlinking.
International Online Defamation: UK Parliament Debating New Online Libel Bill
New UK Defamation Law
Over in the United Kingdom, things are also heating up on the online defamation front. Now that parliament has successfully changed the law allowing Will and Kate’s first-born spawn — even if it’s a female — to rule, they’ve turned their attention to more pertinent issues, like the rights of UK citizens when it comes to free speech and slander.
The proposed defamation act primarily focuses on issues related to libel tourism, but the bill is also a bold attempt to marry Internet and print publishing standards.
Notice and Take-Down Procedure
The “notice and take-down procedures” outlined in the UK’s draft defamation bill may result in a worldwide ripple effect. If approved, website operators in the UK, upon receiving a complaint about possibly defamatory material on their site, will be required to publish the objection alongside the original article, post or comment. If the material in question was posted by an anonymous user, editors will be required to remove the copy in question, unless the original poster agrees to reveal their identity.
What About Whistle-Blowers?
You’re not alone if you just thought, “Hey wait a minute! What about whistle-blowers!?” Parliamentarians thought of that too, and did include an exception for cases where there is “an overriding public interest in publication.”
In the next breath, however, pro-bill legislators published a statement saying that they hope to promote “a culture shift towards a general recognition that unidentified postings are not to be trusted as true, reliable of trustworthy.” (One has to wonder if the societal push to associate anonymity with prevarication will have a chilling effect on the emerging online whistle blowing community, which has only recently begun to find its legs.)
International Defamation Laws: Oregon’s Twibel Lawsuit Denied
Meanwhile, on this side of the pond, Internet defamation lawyers were once again disappointed to hear that another possible Twitter libel case was dismissed before it reached the trial stage, thereby eliminating an opportunity to establish substantial “twibel” legal precedence.
Doctor v. Blogger Online Defamation Lawsuit
The cyberlibel case that “almost was” involved Oregon-based Dr. Jerry Darm and blogger Tiffany Craig.
The tussle began when Craig, after hearing one of Darm’s “ubiquitous” advertisements for his cosmetic procedure medical spa, Aesthetic Medicine, posted a negative missive about him on her blog. On her website, CriminallyVulgar.com, Craig pondered how consumers’ could research the records of doctors, like Darm, who advertise. Craig reasoned that if the average patient relies on ads, how can one follow up to determine the accuracy of said endorsements?
Craig did some digging and shinned a social media light on some potentially damaging information about the doctor. Specifically, Craig discovered Darm had been disciplined by several state medical boards for “inappropriate boundary violations” with female patients. If you believe the online chatter, Darm allegedly offered to provide off-hours vein surgery in exchange for sex. Presumably eager to share the fruits of her sleuthing, Craig tweeted about her Dr. Darm discoveries.
And Darm promptly filed a $1 million dollar online defamation lawsuit.
It was up to Judge Jerome LaBarre to decide if the case was fit for trial. Current U.S. defamation laws require that LaBarre determine if 1) Craig’s comments were made in a public forum, and 2) whether the subject matter of the allegedly defamatory material was a matter of public interest. If the judge determined that the answer to those two questions was “yes,” then there would be grounds for a free-speech defense.
LaBarre ruled that “any website that allows the posting of comments without a fee or some sort of admission process” is a “public forum.” He also decided that health is a matter of public concern. During the hearing, Craig’s lawyer, Linda Williams, moved for the case to be dismissed using anti-SLAPP (strategic lawsuit against public participation) regulations. Thomas McDermott, Darm’s lawyer, objected to Craig’s facility as a medical watchdog since she had never been a patient of his client.
Plaintiff Withdrew Case
A second hearing was set for Oct. 20th and McDermott was expected to argue age-old defamation standards in a 21st century context. But on Friday, Oct. 14, 2011, Darm dismissed the charges against Craig.
And that was that. Yet another social media defamation lawsuit cut short before it got good.
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In attorney speak, trade libel is defined as “the intentional disparagement of a commercial business or product that results in pecuniary loss for the plaintiff.” In other words, lying about a product or company on the Internet will probably lead to an online trade libel lawsuit.
New media companies are popping up like Starbucks — and the global credit crunch means corporations are working hard to protect the things they can control – especially reputation capital.
Since the success of most new media companies is directly proportional to the amount of content they generate (the more the better), editing is quickly becoming a lost art — and increasing amounts of illegal, libelous content is finding its way online.
With hawk-like fervor, businesses have begun to monitor their online buzz for two main reasons:
(1) Corporate entities have become obsessive about maintaining positive online reputations;
(2) In the event a company is unfairly maligned online, the settlement could prove lucrative.
What is Online Trade Libel?
Like other defamation torts, trade libel — or commercial disparagement — is bound to the standard of actual malice. Often problematic for plaintiffs, actual malice addresses a defendant’s motivations. To win a defamation lawsuit, the accuser must provide evidence which elucidates the accused party’s premeditated intent to commit slander or libel. In addition, plaintiffs must illustrate how the defamatory statements have had a direct, negative impact on their financial well-being. Trade libel differs from plain ole’ defamation in that trade libel only applies to instances where a product or business — not an individual — is being unfairly impugned.
Salesmanship vs. Online Trade Libel
There’s a thin line between love and hate; same goes for effective salesmanship and online trade libel. For eons, discrediting the competition has been a common sales tactic. So while it may seem like corporations are constantly criticizing each other, there’s a legal rubicon that must never be crossed: lying.
You’d be hard pressed to find a sales rep that doesn’t point out the deficiencies of a competitor’s product when extolling the virtues of their own. But the moment an eager advertiser makes a spurious claim, expect a trade libel lawsuit to ensue.
Online Trade Libel Case Study: Factory Outlet Store v. Better Business Bureau of Metropolitan New York, Inc.
The Better Business Bureau (BBB) is having a tough year. First there were accusations of giving inflated ratings to companies who paid for BBB accreditation. And now, online retailer, Factory Outlet, is suing the non-profit for online trade libel.
After being given an F-rating on the BBB’s website, electronics dealer, Factory Outlet, filed a $4M trade libel lawsuit against the consumer watchdog group. The plaintiff’s attorney argued that the BBB rating is a lie that’s negatively impacting his client’s bottom line. Factory Outlet contends they’ve handled every report that’s been registered with the BBB; but the non-profit insists the retailer has yet to address 79 outstanding complaints. In addition, the NY BBB chapter says they are unable to determine Factory Outlet’s incorporation date – an omission which, according to the Bureau, is also contributing to the store’s failing grade.
The New York Supreme Court will be hearing arguments in Factory Outlet Store v. Better Business Bureau of Metropolitan New York, Inc.
Contact A Trade Libel Lawyer
As our lives and businesses become more intertwined with the World Wide Web, expect to see more lawsuits alleging online trade libel. Like online defamation, legal precedence for electronic trade libel has yet to be set. Interesting cases which challenge conventional trade libel statutes are bound to pop up over the next several years.