FAQ: Questions and Answers

[back to notice text] Question: When is a company deemed "publically traded"? Answer: A publically traded company is one which trades stock on any of the stock exchanges such as the NASDAQ or New York Stock Exchange. Any member of the public can buy and sell shares of the company stock. [back to notice text] Question: Does it make any difference if I am commenting on a product or company rather than a person? Answer: Product disparagement law prohibits certain false claims about another's goods or services. While a defamatory statement harms the reputation and character of a person or corporation, a product disparaging statement harms the marketability of the goods being disparaged. Product disparagement is typically harder to prove. [back to notice text] Question: What is defamation? Answer: An attack by speech on the good reputation of a person or business entity. Speech that involves a public figure--such as a corporation--is only defamatory if it is false and said with actual malice. It also must be factual rather than an expression of an opinion. In the United States, because of our strong free speech protections, it is almost impossible to prove defamation of a public figure. [back to notice text] Question: What is the legal definition of defamation? Answer: The elements that must be proved to establish defamation are: (1) A publication to one other than the person defamed; (2) of a false statement of fact; (3) which is understood as being of and concerning the plaintiff; and (4) which is understood in such a way as to tend to harm the reputation of plaintiff. [back to notice text] Question: What is disparagement? Answer: As defined in Black's Law Dictionary (7th ed. 1999), disparagement is "A false and injurious statement that discredits or detracts from the reputation of another's property, product, or business. To recover in tort for disparagement, the plaintiff must prove that the statement caused a third party to take some action resulting in specific pecuniary loss to the plaintiff." [back to notice text] Question: How does the First Amendment to the Constitution affect defamation? Answer: The free speech guarantees under the Constitution protect certain speech and commentary. The degree of protection generally depends on whether the person commented about is a private or public figure and whether the statement is regarding a private or public matter. According to the New York Times rule (from the case New York Times v. Sullivan), when the plaintiff is a public figure and the matter is one of public concern, the plaintiff must prove "malice" or "reckless disregard" on the part of the defendant. If both parties are private individuals, there is less protection for the speech because the plaintiff only needs to prove negligence. [back to notice text] Question: What is the legal definition of defamation? Answer: The elements that must be proved to establish defamation are: (1) A publication to one other than the person defamed; (2) of a false statement of fact; (3) which is understood as being of and concerning the plaintiff; and (4) which is understood in such a way as to tend to harm the reputation of plaintiff. [back to notice text] Question: What is a trade secret? Answer: A trade secret is business information that is the subject of reasonable efforts to preserve confidentiality and has value because it is not generally known in the trade. Such confidential information will be protected against those who obtain access through improper methods or by breach of confidence. Infringement on a trade secret is a tort and a type of unfair competition. Every alleged infringement of a trade secret involves two main issues: (1) whether there is valuable and secret business information; and (2) whether this defendant used improper means to obtain that information. [back to notice text] Question: What is a trade secret? Answer: A trade secret is business information that is the subject of reasonable efforts to preserve confidentiality and has value because it is not generally known in the trade. Such confidential information will be protected against those who obtain access through improper methods or by breach of confidence. Infringement on a trade secret is a tort and a type of unfair competition. Every alleged infringement of a trade secret involves two main issues: (1) whether there is valuable and secret business information; and (2) whether this defendant used improper means to obtain that information. [back to notice text] Question: What is a preliminary injunction? Answer: An order by the court requiring the defendant to do or refrain from doing some action pending a full trial on the merits of the lawsuit. Sometimes in intellectual property litigation, the property owner, soon after filing the complaint, will make a motion for a preliminary injunction requiring the defendant to stop doing those things the plaintiff alleges are infringing the plaintiff's intellectual property rights. [back to notice text] Question: What are the factors the court considers in issuing a preliminary injunction? Answer: Traditionally, a party seeking a preliminary injunction is required to show five basic factors: (1) that there is a probability of success at the ultimate trial on the merits of the claim; (2) that the plaintiff will undergo "irreparale injury" pending a full trial on the merits; (3) that a preliminary injunction will preserve the status quo which preceded the dispute; (4) that the hardships favor the plaintiff; and (5)that a preliminary injunction will favor the public interest and protect third parties. [back to notice text] Question: What is a "Permanent Injunction"? Answer: An injunction is "A court order commanding or preventing an action. * To get an injunction, the complainant must show that there is no plain, adequate, and complete remedy at law and that an irreparable injury will result unless the relief is granted... [A]permanent injunction [is] [a]n injunction granted after a final hearing on the merits. * Despite its name, a permanent injunction does not necessarily last forever." [back to notice text] Question: What are "Exemplary Damages"? Answer: Exemplary damages are punitive damages, which are defined as "Damages awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit." Punitive damages are intended to punish and thereby deter blameworthy conduct. The Supreme Court has held that three guidelines help determine whether a punitive-damages award violates constitutional due process: (1) the reprehensibility of the conduct being punished; (2) the reasonableness of the relationship between the harm and the award; and (3) the difference between the award and the civil penalties authorized in comparable cases. BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589 (1996)."

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