Facts
- A manufacturer of a natural-diamond abrasive (“Debdust”) competed with a seller of a synthetic-diamond abrasive (“MBS-70”).
- The defendant distributed a marketing pamphlet comparing MBS-70 to Debdust, presenting the comparison as grounded in laboratory testing.
- The pamphlet contained specific technical and quantitative claims (e.g., comparative blade life and power required to complete cuts) asserting MBS-70’s superiority.
- The claimant alleged the pamphlet’s test-based assertions were false or misleading and disparaged Debdust to divert customers and increase the defendant’s sales.
- The claimant alleged resulting pecuniary loss, including loss of sales and profits in the relevant industrial market.
- The defendant applied to strike out the claim, arguing the statements were non-actionable advertising “puff.”
Issues
- Whether the pamphlet’s purported test-based comparisons were mere non-actionable puffery or specific factual representations capable of grounding a claim in injurious (malicious) falsehood.
- Whether the pleading sufficiently alleged the elements of injurious falsehood—falsity, publication, malice, and special damage—to survive a strike-out application.
Decision
- The court dismissed the defendant’s strike-out application.
- The court held the pamphlet’s statements were capable of being treated as factual representations rather than mere puff, given their presentation as laboratory results and their technical specificity.
- The court concluded the statement of claim sufficiently pleaded falsity, publication to third parties in the trade, malice (including intention to injure or knowledge/recklessness as to falsity), and special damage in the form of pecuniary loss.
- The action for injurious (malicious) falsehood was allowed to proceed to trial.
Legal Principles
- Generalized laudatory claims that a trader’s product is “best” may be treated as non-actionable puffery.
- Comparative advertising that asserts specific, verifiable facts—particularly when framed as objective testing or scientific study—may be actionable if false.
- A properly pleaded injurious (malicious) falsehood claim requires allegations of (1) a false statement, (2) publication to a third party, (3) malice (including knowledge of falsity or reckless disregard and an improper purpose), and (4) special damage (pecuniary loss such as lost sales/profits).
- On a strike-out application, a claim will proceed where the pleaded facts, if proved, could satisfy these elements and are not plainly untenable.
Conclusion
The court held that detailed, test-based comparative claims presented as scientific fact can fall outside advertising puffery and support an injurious falsehood claim when falsity, malice, and pecuniary loss are adequately pleaded, so the claimant’s case was permitted to continue.