Australia: Product Disparagement: Protecting Your Product´s Reputation

Last Updated: 27 October 2008
Article by Peter Keel

Most Read Contributor in Australia, November 2017

Key Points

  • To recover losses caused by damage to reputation or product disparagement, corporations may look to the tort of injurious falsehood and remedies under the Trade Practices Act.
  • Corporations should be prepared to engage with the press so that if product disparagement occurs the correct position may be communicated to the public as quickly and efficiently as possible.

The right of most corporations to sue for defamation was abolished with the commencement of Australia's uniform defamation laws (UDA) on 1 January 2006.

The rationale for the change was that defamation law had developed to protect personal reputations and corporations and products do not have personal reputations to protect (only commercial reputations).

So what can corporations do to defend their interests when their commercial reputations are attacked or their products disparaged?

There are alternative legal options, including the economic tort of injurious falsehood and remedies under the Trade Practices Act. Although these options might previously have been rejected in favour of a defamation action, they are increasingly significant to corporations since the introduction of the UDA. However, as these options are only available in the particular circumstances (see below), it is also important for corporations to consider alternative strategies.

A corporation should be prepared to:

  • Identify the appropriate audiences in the event that it must make a statement in relation to a crisis - for example, is the audience the corporation, its shareholders, its consumers, or the public generally? To avoid the corporation, its shareholders, its consumers or the media finding out information (often inaccurate and damaging information) from another source, it may be necessary to make a comprehensive statement to the appropriate audience. There are various ways that this may be done - ASX release, website announcement, even a press release. It depends upon what is being said or suggested, and by whom.
  • Engage with the press. As a corporation cannot sue to protect its reputations in Australia or sue media entities under the Trade Practices Act (see below), it is all but compelled to engage with the press.

Injurious falsehood

Injurious falsehood is the publication to a third party of a false and malicious statement about a plaintiff's business, property or goods that causes actual damage, and is also known as slander of goods or product disparagement. "Goods" includes not only specific goods, but any type, class or kind of goods manufactured, sold, or otherwise dealt with in the course of any person's trade or business.

For example, a statement in a newspaper report that a particular model of car was unsafe may be actionable in injurious falsehood by the manufacturers and distributors of the car (see Sungravure Pty Ltd v Middle East Airlines Airliban SAL (1976) 134 CLR 1 at 23). However, as plaintiffs, the manufacturers and distributors would have to prove falsity, malice and actual damage.

  • Falsity

    The plaintiff must prove that the statement was false.

    Not all disparagements of another's goods or services amount to injurious falsehood. Exaggeration, puffery or hyperbole, for example, by means of an advertising campaign in favour of one corporation's products over another's, do not necessarily give rise to a cause of action in injurious falsehood. However, they may give rise to remedies under the Trade Practices Act (see below).
  • Malice

    The plaintiff must prove that the statement was malicious.

    A statement will be malicious if the defendant knew it to be false, was recklessly indifferent to the truth or falsity of it, had an indirect, dishonest or improper motive, or intended to injure the plaintiff without just cause or excuse.

    Proving malice is not an easy task as it involves an inquiry into the defendant's state of mind, which is often a significant obstacle to plaintiffs.
  • Actual damage

    The plaintiff must prove that actual damage was the natural and probable consequence of the publication of the false and malicious statement.

    Although a degree of guesswork is permissible, damage must be proved with as much certainty as is reasonable in the circumstances. The most obvious examples of actual damage is loss of profits due to a decrease in custom or a contract cancellation.

The elements of injurious falsehood are generally harder to prove than in a defamation action and recent authorities on injurious falsehood confirm that there are real difficulties for plaintiffs attempting to establish an injurious falsehood action. Having said that, the tort of injurious falsehood remains a strong alternative for corporations whose products have been disparaged.

Trade Practices Act

Alternatively, corporations may find recourse for damage to their reputations or disparagement of their products in a claim for misleading and deceptive conduct under section 52 of the Trade Practices Act (and its equivalents in the Fair Trading Acts of the States and Territories).

Section 52 goes some way to replacing the tort of injurious falsehood, and has some tangible benefits over it. Section 52 says:

"A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

Unlike injurious falsehood, there is no need to prove malice or actual damage and there is, arguably, a greater liability for exaggeration, puffery and hyperbole. The following elements are required:

  • A corporation

    Section 52 applies to corporations.

    Media organisations are exempt from section 52 when providing information (by virtue of section 65A of the Trade Practices Act). Where they publish misleading and deceptive advertisements promoting their own business, they move outside the ambit of the exemption. Although recent cases have attempted to chip away at the media's protection under section 65A, the decisions of Channel Seven Brisbane Pty Ltd v ACCC [2008] FCAFC 114, and Bond v Barry [2008] FCAFC 115, reaffirm the protection the section provides.

    Section 52 is extended to apply to persons in certain circumstances. Under the extended application of the Trade Practices Act, the reference to a corporation includes a person where the conduct engaged in involves the use of postal, telegraphic or telephonic services or takes place in a radio or television broadcast. Therefore, where misleading and deceptive material is placed on the internet or broadcast on radio or television, section 52 applies to persons.
  • Engage in conduct

    The expression engage in conduct includes the making of representations, statements or promises and silence.
  • Misleading and deceptive conduct

    Intention is irrelevant for the purposes of section 52. A corporation that acts honestly and reasonably may nonetheless engage in conduct that is likely to mislead or deceive.

    One of the most obvious examples of misleading and deceptive conduct is errors in comparative advertising. Comparative advertising is a common technique wherein corporations attempt to show that their products are superior to others. It is recognised that errors in comparative advertising are more likely to mislead and deceive than any other form of advertising, as it is likely that consumers will perceive it as providing a fair and precise comparison. The court will not excuse inaccurate or unfair comparisons on the basis that they are mere puff. Corporations engaging in comparative advertising have a heavy responsibility to ensure that their comparisons are accurate (and accuracy often requires comparing like with like) and capable of being substantiated.

    In the Duracell Bunny Case (Gillette Australia Pty Ltd v Energizer Australia Pty Ltd [2002] FCAFC 223), a Duracell television advertisement explicitly compared its own brand of alkaline batteries to Energizer's cheaper, non-alkaline battery - a different and inferior technology. The advertisement did not mention that Energizer also sold an alkaline battery of similar quality to Duracell's. The court held that comparative advertising does not require the comparison of like with like products to be a fair comparison; however, advertisers must compare the same aspect of a competitor's product, for example, the power of a battery. The court held that the advertisement was fair and not misleading because the batteries could be used interchangeably in the same devices and there was extensive cross-purchasing between the two in the battery market.
  • Remedies

    Where a corporation has engaged in misleading or deceptive conduct or conduct that is likely to mislead or deceive, a range of remedies are potentially available including injunctions, damages and appropriate rectification or relief (such as corrective advertising).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions