Business & Commercial Disparagement in Colorado

Business and commercial disparagement is a specific type of invasion of privacy law, closely related to Colorado defamation law. It is also referred to as:

  • trade libel;
  • product disparagement;
  • slander of goods; or
  • injurious falsehood.

Simply put, it is the publication of:

  • false or derogatory statements
  • concerning a business or that business's product
  • that causes financial harm to the business.

What You Have to Prove

To prove a claim of business and commercial disparagement in Colorado, the injured party (the plaintiff) must prove:

  • another party intentionally communicated a false and derogatory statement about the plaintiff's product, service, or business to a third party; and
  • the statement caused existing or prospective customers or businesses not to do business with the plaintiff.

When These Claims Commonly Occur

These situations are most common between competing businesses with competing products. Some examples help illustrate what this looks like in the real world:

  • False statements that a company has engaged in illegal practices;
  • False statements that a company's product is not FDA approved;
  • Statements that a product is unsafe, causes a disease, or could otherwise cause harm;
  • Untrue allegations that a company has cheated its clients or customers;
  • Another company posts false or misleading statements on social media or review sites like Yelp; or
  • A company runs advertisements which contain false information about another company's product.

Obtaining Damages

If a company is harmed by the untrue statements of another individual or business, it is entitled to receive damages, such as:

  • lost earnings and profits;
  • harm to reputation;
  • loss of business potential; or
  • damages under Colorado's deceptive trade practices act.

Below, our Colorado personal injury attorneys address frequently asked questions about business and commercial disparagement claims in personal injury lawsuits and the injuries you may have suffered:

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Business and commercial disparagement is a specific type of invasion of privacy law, closely related to Colorado defamation law.

1. What is business and commercial disparagement in Colorado?

Business and commercial disparagement is a specific type of invasion of privacy law, closely related to Colorado defamation law. It is also referred to as:

  • "trade libel"
  • "product disparagement"
  • "slander of goods"
  • "injurious falsehood."

Simply put, it is the publication of:

  • false or derogatory statements
  • concerning a business or that business's product
  • that causes financial harm to the business.1

2. What does a person have to show to prove his or her claim?

To prove a claim of business and commercial disparagement, the injured party (the plaintiff) must prove:

  • another party intentionally communicated a false and derogatory statement about the plaintiff's product, service, or business to a third party; and
  • the statement caused existing or prospective customers or businesses not to do business with the plaintiff.2

Methods of proof and types of evidence include but are not limited to:

  • the advertisement put out by the defendant;
  • documentary evidence of the false or misleading statement;
  • a review posted online; or
  • testimony from customers and businesses who read or had access to the false statement.3

2.1 Can an opinion subject a person to a lawsuit?

An opinion is different from a typical statement of fact. An opinion is owned by the person who made it, and unless it alleges false facts, it cannot be the subject of a product disparagement lawsuit.

Determining whether a statement is an "opinion" or if it alleges false facts that could be actionable in a lawsuit is an individual determination in every case.

3. What types of activities lead to this claim?

These situations are most common between competing businesses with competing products. Some examples help illustrate what this looks like in the real world:

  • False statements that a company has engaged in illegal practices;
  • False statements that a company's product is not FDA approved;
  • Statements that a product is unsafe, causes a disease, or could otherwise cause harm;
  • Untrue allegations that a company has cheated its clients or customers;
  • Another company posts false or misleading statements on social media or review sites like Yelp; or
  • A company runs advertisements which contain false information about another company's product.

When another company or an individual makes false statements about a company or product, the individual or business harmed by those false statements deserves compensation.

3.1 Can internet posts lead to a lawsuit?

Internet posts are a common source of false and disparaging statements made against companies or products. This is especially true in the age of "Yelp"4 and other online review websites.

Negative reviews (especially of restaurants) can have a seriously negative effect on a business. Customers are entitled to their opinions so long as they are truthful.

Example: Gordy posts a review of a local Denver restaurant that states: "Don't go to Japopo's, it is filthy, and I found cockroach pieces in my clam special. Manager was very rude. BAD!" In fact, Japopo's is clean, and Gordy never found cockroach pieces in his food. This lie could subject him to a lawsuit.

However, Gordy did receive bad service while he was there, and the manager was rude. If he had expressed his concerns without making up information, he would not be liable for damages to the restaurant.

4. What types of damages can I get with a business and commercial disparagement lawsuit?

If a company is harmed by the untrue statements of another individual or business, it is entitled to receive damages, such as:

  • lost earnings and profits;
  • harm to reputation;
  • loss of business potential; or
  • damages under Colorado's deceptive trade practices act.5

Economic damages as well as non-economic harm can be proven to a jury with the help of an experienced attorney.

5. Are there legal defenses to allegations of trade libel?

A person who faces allegations of business disparagement can raise legal defenses based on the particular facts of the case. These include but are not limited to:

  • the statement at issue is true;
  • the statement is an opinion;
  • the statement was never published;
  • the business suffered no damages as a result of the statement; or
  • the person accused did not make the statement.
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Call us for help...

For questions about business and commercial disparagement or to confidentially discuss your case with one of our skilled Colorado criminal defense attorneys, do not hesitate to contact us. For cases in Califonia or Nevada, please see our articles on trade libel in California and business disparagement in Nevada

We represent clients in and around Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, and several nearby cities.


Legal References:

  1. Teilhaber Mfg. Co. v. Unarco Materials Storage, a Div. of Unarco Industries, Inc., 791 P.2d 1164 (1989).
  2. Restatement (Second) of Torts 623(A) and 624 (1976).
  3. Cause of Action for Product Disparagement, 21 COA 245, Robert Michael Ey, JD.
  4. Yelp, Home.
  5. CRS 10-3-1104 (Unfair methods of competition--unfair or deceptive acts or practices).

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