The War Room: How to Fight Competitors Without Getting Sued | Voxel Labs Legal Survival Guide (Part 3)

Key Takeaways

• The Danger: "Trade Libel." If you say something negative about a competitor's product, you better be able to prove it in court.
• The Precedent: The U-Haul v. Jartran case cost a company $40 million for false comparative advertising.
• The Strategy: Don't punch down; punch up. Compare yourself to "The Industry," not "Bob's Pizza."

Previously in Part 2: We secured your intellectual property from your employees. Now, we look outward. You have a competitor in the South Bay who is driving you crazy. They overcharge, they underdeliver, and you want to make a video exposing them. Today, in Part 3, we explain why that is a terrible idea.

The "Redondo Coffee War" Fantasy

Imagine you own a high-end coffee shop in Riviera Village. You source fair-trade beans. You pay your baristas well.

Down the street, a "Corporate Chain" opens up. They sell burnt coffee for half the price. You are angry. You want to record a video at Voxel Micro Video Labs titled: "Why The Coffee Shop Down the Street Uses Expired Milk."

Do not film that video.

Even if you think it’s true, making a specific, damaging claim about a competitor opens you up to a lawsuit for Trade Libel (Defamation of a Business). In California, if you damage their revenue with a false statement, you are liable for the lost profits.

The $40 Million Lesson (U-Haul v. Jartran)

You might think, "I'm just a small business, nobody will sue me." Think again. The rules of "Comparative Advertising" are written in blood and money.

In the famous case of U-Haul Int'l, Inc. v. Jartran, Inc., a competitor (Jartran) ran ads showing their trucks were bigger and cheaper than U-Haul’s. U-Haul sued them for false advertising under the Lanham Act.

The result? The court ordered Jartran to pay U-Haul $40 million—$20 million for lost profits and another $20 million for punitive damages. Jartran went bankrupt.

The Lesson: If you compare prices or features, you must be 100% factually accurate. If you are 1% wrong, you lose everything.

The Safe Harbor: "Puffery" vs. "Fact"

So how do you fight back? You use the legal concept of "Puffery."

Puffery is a subjective exaggeration that no reasonable person would take as a literal fact. It is protected speech.

• Dangerous (Fact): "Our pizza has 50% more cheese than Domino's." (You better have a scale and a lawyer).
• Safe (Puffery): "Papa John's: Better Ingredients. Better Pizza." (This is subjective opinion. It’s legal).

At Voxel, we coach our members to attack "The Industry," not the neighbor.

Instead of saying "Bob's Realty is a scam," say "Many realtors charge hidden fees. Here is how we are transparent." You plant the seed of doubt without painting a target on your back.

The "High Road" ROI

There is a strategic reason to avoid trash talk: It makes you look small.

When you talk about a competitor, you are giving them free airtime. You are telling your audience that you are worried about them.

Radical Professionalism is the ultimate weapon. When you sit in our studio and talk only about your value, your customers, and your vision, you look like the market leader. Leaders don't punch down.

Up Next in Episode 4: Competitors are one thing. But what about the random stranger on the internet who hates you for no reason? In the next post, we discuss "The Troll Defense" and how to handle a PR crisis without losing your cool.

Fight smart.
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