Data Analytics, Inc, and eProducts Corporation market competing software products. Data Analytics launches an advertising campaign claiming that eProducts, instead of testing software before it is marketed, has customers "test" the software by using it
eProducts knows this is not true but begins to lose sales to Data Analytics. On what ground could eProducts sue Data Analytics for injury to eProducts' reputation?
eProducts could sue Data Analytics for defamation for the harm it is causing to eProducts' reputation. Defamation occurs when a party makes a false statement that injures another's reputation. In this problem, any defamatory statements likely take the form of libel (defamatory statements in written or printed form). To bring a suit on this ground, eProducts would have to show that Data Analytics published the false in-formation-that is, communicated it to a third party. If eProducts is considered a public figure, it will also need to prove that Data Analytics made the statements with actual malice-that is, with either knowledge of their falsity or a reckless disregard for the truth.
Publication of false information about another's product, alleging that it is not what its seller claims, also constitutes the tort of slander of quality, or trade libel. To bring a suit on this theory successfully, eProducts would have to show not only that a third person refrained from dealing with it because of the improper publication but also that there were associated damages.
eProducts might also include a claim based on the tort of misrepresentation, or fraud. Misrepresentation leads another to believe in a condition that is different from the one that actually exists. This tort requires several elements: (1 ) misrepresentation of facts or conditions with knowledge that they are false or with reckless disregard for the truth, (2 ) intent to induce another to rely on the misrepresentation, (3 ) justifiable reliance by the deceived party, (4 ) damages suffered as a result of the reliance, and (5 ) a causal connection between the misrepresentation and the injury.
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