Full opinion text
OPINION JULIAN, Senior District Judge. The plaintiff, Bose Corporation (Bose), a manufacturer of loudspeaker systems and other audio equipment, brought this civil action in 1971 against the defendant, Consumers Union of United States, Inc. (CU), a consumer product-testing organization, alleging product disparagement, unfair competition, and violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1976). Jurisdiction was based on diversity of citizenship, 28 U.S.C. § 1332(a)(1), and on the Lanham Act, 15 U.S.C. § 1121 and 28 U.S.C. § 1338(a) and (b). The lawsuit was precipitated by the publication of a review of the plaintiff’s product, the Bose 901 Series I loudspeaker system, (the Bose 901), which appeared in the May 1970 issue of the defendant’s publication, Consumer Reports. After an exceedingly protracted period of pretrial discovery the Court severed the issue of damages from the other issues in the case and ordered that a trial be held on the issue of damages only if the plaintiff prevails on the remaining issues. The Court then conducted a non-jury trial which concluded after nineteen days of testimony. This opinion constitutes the Court’s findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedure. Further findings of fact and conclusions of law on the issue of damages will be made after the trial on damages is held. THE PARTIES Plaintiff The plaintiff, Bose Corporation (Bose), is a corporation organized under the laws of the State of Delaware and having its principal place of business in Framingham, Massachusetts. It was organized in 1964 under the laws of the Commonwealth of Massachusetts and became a Delaware corporation by merger in December, 1978. When this action was commenced on February 28, 1971, the plaintiff was a Massachusetts corporation and had its principal place of business in Natick, Massachusetts. Dr. Amar G. Bose (Dr. Bose) is the founder, principal owner, and chief executive officer of the plaintiff corporation. The name of the plaintiff corporation is derived from the surname of Dr. Bose. Dr. Bose is also the inventor of the Bose 901, the product involved in this action. Dr. Bose received his Bachelor of Science degree and his Master of Science degree from Massachusetts Institute of Technology (M.I.T.) in 1952 and his Doctor of Science degree from the same institution in 1956. He has been a member of the faculty of M.I.T. in the Department of Electrical Engineering since 1956. He is the co-author of a textbook entitled Introductory Network Theory. For the purposes of this action the defendant concedes that he is an expert in the field of loudspeaker design. The Bose 901 system was designed by Dr. Bose in 1967. The system consists of two loudspeaker cabinets, an electronic device called an “active equalizer,” and necessary wiring and connections. Each of the cabinets is of pentagonal shape when viewed from above, being designed to have one side (the front face) facing toward the listener and two other sides (the rear faces) facing away from the listener. The two rear faces join at an angle in the rear of the cabinet to form a “V”. The front face contains a single driver. Each of the two rear faces contains four drivers. The nine drivers are of equal size. Because of this configuration of drivers within the Bose 901 cabinets, each Bose 901 loudspeaker radiates one-ninth of the sound directly into the listening area, and eight-ninths of the sound into the listening area after reflection off one or more walls. The shape of the Bose 901 cabinets and the design of the Bose 901 system as a whole are unique and unconventional. The Bose 901 was first marketed in late 1967 or early 1968. In 1968 Bose began to advertise and extensively promote the Bose 901. Bose published advertisements promoting the Bose 901 in the national consumer high fidelity magazines , in national general publications, and in other publications. A significant portion of the Bose marketing efforts was directed toward soliciting reviews of the Bose 901 by professional reviewers. Bose obtained the right to reprint such reviews and distributed reprints of the reviews as part of its promotional campaign. Defendant The defendant, Consumers Union of United States, Inc. (CU), is a not-for-profit corporation organized and existing under the laws of the State of New York and having its principal place of business in Mount Vernon, New York. CU was organized in 1935. When this action was commenced, CU had its principal place of business in Mount Vernon, New York. From May 1936, to date, CU has published a magazine called Consumer Reports, in which information about the quality, characteristics, and prices of various consumer products is set forth. At all times relevant to this action, Consumer Reports has been published on a monthly basis. Consumer Reports is distributed by mail to subscribers and is sold on newsstands. The influence of Consumer Reports on consumers’ buying decisions is substantial. During 1970 and 1971 Consumer Reports and CU had a very favorable reputation for independence, integrity, accuracy, and freedom from bias. Subscribers to Consumer Reports tend to make buying decisions relative to consumer products after consulting reports published in Consumer Reports, among other sources, and in 1970 millions of readers relied upon the product information published in the magazine. Many consumers would not think of making a substantial purchase without consulting Consumer Reports. The Consumer Reports Article On pages 272 through 279 of the May 1970 issue of Consumer Reports CU published an article entitled “Loudspeakers” (the Article). The Article contained CU’s evaluation of the quality and performance of twenty-four different loudspeakers based on CU’s tests of the loudspeakers. In a section (the Bose 901 Portion) boxed off from the main body of the Article, under the heading “Some loudspeakers of special interest,” appeared the following comments about the Bose 901: Some loudspeakers of special interest BOSE 901. No loudspeaker design has ever really captured the realism of live concert hall sound, although many designers have tried. The Bose 901 system (The Bose Corp., Natick, Mass.) takes an interesting shot at realism. The concept behind the Bose system is based on the contention that in an actual concert hall most of the sound you hear has been bounced from the walls; it does not come directly from the orchestra. Therefore, the Bose 901 speaker system directs only about 10 per cent of its output toward the listener and bounces the other 90 per cent from the wall. The Bose 901 system comes as a package with two speaker systems and an electronic equalizer that can be easily connected to your amplifier. The package is priced at $476 ($496 on the West Coast). Each speaker cabinet contains nine small (five-inch) speakers. Small speakers tend to reproduce high frequencies more efficiently than low frequencies. But so many speakers together in each cabinet help to reinforce bass tones, and help to disperse the sound more evenly. The electronic equalizer is intended to further compensate for the relatively low bass efficiency of small speakers, to compensate for the loss of treble when sound is reflected from the walls, and thus to help provide a uniform overall response. The active equalizer can be adjusted, within limits, to vary the sound to individual taste. To determine what effect the system has on stereo reproduction, CU’s engineers made a special tape, in the anechoic chamber, of a cricket-like noise-maker moving from extreme left to extreme right. We played the tape through the Bose system in our listening room and asked a panel to judge the direction from which the sound appeared to come. For comparison, the panel also listened to the same tape through a pair of ADC 303AX speakers, check-rated in the accompanying report. The panelists were able to locate the sound accurately from both the ADC and Bose systems when they sat directly between the speakers, but not when they sat at either the extreme left or extreme right. So, at least for pinpointing sharp noises, there appeared to be no difference between the speaker systems. We repeated the experiment using a variety of stereo records. When it came to music, the panelists immediately noted a remarkable difference between the systems. The Bose 901 seemed considerably more spacious and reverberant, actually to the point of giving the impression that the wall of the listening room had ‘dropped away. The effect was rather dramatic and was felt from any listening position. But after listening to a number of recordings, it became apparent that the panelists could pinpoint the location of various instruments much more easily with a standard speaker system than with the Bose system. Worse, individual instruments heard through the Bose system seemed to grow to gigantic proportions and tended to wander about the room. For instance, a violin appeared to be 10 feet wide and a piano stretched from wall to wall. With orchestral music, such effects seemed inconsequential. But we think they might become annoying when listening to soloists. On an impulse, we also played some monophonic records through the Bose. To our surprise, they too acquired the same spacial openness and size distortions as the stereo records. As for sound quality, if the Bose 901 had been rated with the main group of tested speakers, it would have fallen between the high- and medium-accuracy groups. The overall sound was of good quality with impressive bass, considering the small speakers. But the combination of the equalizer and the speakers tended to overemphasize the middle bass, giving it a somewhat overly full, heavy sound. We think the Bose system is so unusual that a prospective buyer must listen to it and judge it for himself. We would suggest delaying so big an investment until you were sure the system would please you after the novelty value had worn off. If you do consider buying the system, note well this fact: The Bose requires a rather gigantic amount of power. CU recommends you have an amplifier of 50 watts per channel for the deepest bass response. A brief summary of the Bose 901 Portion of the Article was published by CU in the December 1970 “Buying Guide Issue” of Consumer Reports. CU Personnel The testing project that led to the publication of the Article involved a number of CU personnel, but the persons who were primarily responsible for the Bose 901 Portion of the Article were Arnold L. Seligson and Alan Lefkow. Seligson was the senior project engineer on the loudspeaker testing project and Lefkow worked as a project engineer under the immediate supervision of Seligson. Seligson received a bachelor’s degree in electrical engineering from the City College of New York in 1957. He took additional courses leading toward a master’s degree in electrical engineering during the years 1953-1956, but discontinued his studies for personal reasons and never attained a master’s degree. He also took a course in acoustics at Brooklyn Polytechnic Institute in 1953. From 1952 to 1956, Seligson worked for the United States Naval Materiel Laboratory, where much of his work involved measurement and evaluation of loudspeakers. In July 1956 Seligson was employed by CU as a project engineer. In 1961 he left CU to work for another corporation. He returned to CU in 1963 as a senior project engineer and remained a CU employee to the time of trial. Seligson became chief of CU’s electronics division in 1974 and held that position at the time of trial. While an employee of CU, Seligson has done extensive work on testing of loudspeakers. He has been testing and evaluating loudspeakers for more than 25 years. Alan Lefkow was first employed by CU at the end of September 1969, just before the loudspeaker testing project began. He was employed as a project engineer in the electronics division and worked on the loudspeaker testing project under Seligson’s supervision. Before joining CU Lefkow had received a bachelor’s degree in electrical engineering from the City College of New York in 1965 and a master’s degree from Columbia University in the same field in 1968. CU’s Expert Witness Dr. David M. Green testified as an expert witness for CU. Dr. Green is the Chairman of the Department of Psychology and Social Relations at Harvard University, where he is a professor of psychophysics. He received a bachelor’s degree in liberal arts from the University of Chicago in 1952, a bachelor’s degree in psychology from the University of Michigan in 1954, and a doctoral degree in psychology from the University of Michigan in 1958. He has taught courses in psychoacoustics at various universities; is the author of a large number of publications in the field of psychoacoustics; has written a text book entitled An Introduction to Hearing; is the president-elect of the Acoustical Society of America; and was acknowledged by the plaintiff to be an expert in the field of psychoacoustics. The Loudspeaker Tests CU’s loudspeaker testing project began in the spring of 1969 with the preparation of three marketing reports by CU’s Marketing Services Department. These reports were used in selecting the loudspeakers which were to be tested. A total of twenty-four of the loudspeakers listed in the marketing reports were eventually selected for testing. The primary purpose of the loudspeaker project was the evaluation of medium-priced loudspeakers, generally those with a retail price of from $80 to $150 per speaker. The Bose 901, which consisted of two loudspeaker cabinets and an active equalizer, was priced at $476 and was thus not a medium-priced loudspeaker system. Nevertheless, Seligson and other CU employees decided to include the Bose 901 in the testing project because of the wide reputation it had achieved in the industry and because of the unusual claims made on its behalf by its manufacturer. Seligson was directly involved in the initial discussions concerning the inclusion of the Bose 901 in the testing project. Seligson also completed a “Test Sample Requisition” to be prepared for the purchase of several loudspeakers, including the Bose 901. The decision to include the Bose 901 in the testing project required the approval of Seligson’s superiors — Karl Na-gel, Chief of the Electronics Division; Monte Florman, acting (associate) technical director, and John Hanc, head of the Marketing Services Department. Seligson expected that the “Test Sample Requisition” which he had prepared would, in the normal course of events, be approved and it was in fact approved by Seligson’s superiors. The loudspeaker tests that provided the basis for the evaluations made in the Article began in September 1969. Seligson was in charge of the testing and planned the tests. He did some of the testing work himself, and supervised the work of Lefkow and two assistant project engineers who were assisting in the testing work. When the testing was completed, Seligson analyzed the results and prepared, with Lefkow’s assistance, a report to CU’s editorial department which report formed the basis of the Article. Each of the twenty-four loudspeakers was put through a basic battery of tests. The loudspeakers were first put through a number of “objective” tests and measurements. They were then subjected to an “A-B listening test,” a test which was designed to evaluate the “accuracy” of the loudspeakers. The “A-B listening test” was described in the Article as follows: To supplement the quantitative measurements we made of the loudspeakers in the anechoic chamber and the listening room, we put each speaker through a carefully designed listening-panel test. We first selected a speaker we knew provided a wide, smooth frequency response; that became the “reference speaker.” We played a wide variety of music through that speaker in the anechoic chamber and recorded the output of the speaker on one track of a master tape. At the same time, we recorded the music directly on the second track of the master tape, without playing it through the speaker. The reference speaker was then set up in the listening room, hidden from view of the listening panel. The music recorded on the second track of the master tape (that is, the music recorded directly from the source) was played through the reference speaker. The speakers under test were set up two at a time, also out of view of the panelists. The music recorded from the first track of the master tape (that is, the music recorded from the reference speaker) was played through the speakers under test. Under those conditions, then, a test speaker that reproduced music with absolute fidelity would sound exactly the same as the reference speaker. The panelists were asked to judge which one of the two test speakers produced a sound that was, overall, closer to that of the reference. (We could, of course, switch back and forth between the reference speaker and the test speakers almost instantaneously.) The listeners were told emphatically not to base their judgments on which speaker seemed “better” for music or which they “liked” better, but merely to say which was more faithful to the reference sound. At the same time, by asking the listeners to match the loudness of the speakers under test, we determined the amount of average sine-wave power required for each speaker to produce the same loud sound in a 3000-cubic-foot room. That figure provided a good comparison of the effective relative efficiency of the speakers. CU’s statistical analysis of the results of the A-B listening test revealed that the Bose 901 should be ranked in the “middle accuracy group” of loudspeakers. Because he felt that the results of this test were unfair to the Bose 901, Seligson placed the Bose 901 “between the high- and medium-accuracy groups.” After the objective tests and the A-B listening test were conducted, the Bose 901 was subjected to two additional “special tests.” The first “special test,” the cricket test, was described in the May 1970 Consumer Reports Article as follows: To determine what effect the system has on stereo reproduction, CU’s engineers made a special tape, in the anechoic chamber, of a cricket-like noise-maker moving from extreme left to extreme right. We played the tape through the Bose system in our listening room and asked a panel to judge the direction from which the sound appeared to come. For comparison, the panel also listened to the same tape through a pair of ADC 303AX speakers, check-rated in the accompanying report. It was Seligson’s idea to conduct the cricket test and it was Seligson who designated the Bose 901 for inclusion in the cricket test. The second “special test,” the “special listening test,” was also Seligson’s idea. The “special listening test” consisted simply of Seligson and Lefkow recording their personal observations after listening for several hours to a variety of records played through the Bose 901. Seligson selected himself and Lefkow to be the “panelists” for the “special listening test” because he felt they would be the appropriate parties to make the subjective judgments that were called for by this test. The Seligson Patent In the summer of 1964, Seligson conceived of an idea for utilizing an electrical discharge in order to produce sound. He envisioned the primary application of his idea to be a device which could be used as a loudspeaker. In the fall of 1964 Seligson and Robert S. Lanier, a fellow CU employee, began work on the development of a loudspeaker using Seligson’s idea. They built several models of the loudspeaker and discovered that the concept worked. Their models produced audible sound. The sound, however, was produced at very low levels, was distorted, and was accompanied by the production of ozone when the models were in operation. In late 1964, Seligson and Lanier decided to attempt to obtain a patent on the new loudspeaker and retained a patent attorney named Robert W. Fiddler for that purpose. They called their invention the “Ionoflow Loudspeaker,” and in describing it to Fiddler, Seligson wrote: “Above all, the Ionoflow can, we believe, be made into the first truly full-range, high efficiency, low-distortion speaker in a fiarly (sic) small form.” Seligson believed that language to be an accurate description of the invention at the time. An application for a patent on the invention was signed by Seligson and Lanier on April 8,1966, and filed in the United States Patent Office on April 26, 1966. At that time Seligson still thought that his invention might have commercial potential despite its problems of inadequate sound volume, distortion, and ozone production. Seligson did not work on the invention at all from 1967 until spring of 1970. He was discouraged by the problems encountered in building a good, working model and became gradually disillusioned about the prospects of future commercial exploitation of his idea. On May 5,1969, Fiddler wrote to Seligson to inform him that notice had been received from the United States Patent Office that a patent would issue on the application. On November 4, 1969, during the same period-of time CU was conducting its loudspeaker tests, United States Patent No. 3,476,887 was issued to Seligson and Lanier for their “Ionic Electro-Acoustic Transducer.” In April 1970 Seligson learned that Lanier had been approached by a man named Bertram Menden, who sought on behalf of a third party to acquire a license or rights under the patent. Menden was in reality a private detective retained by Bose to inquire into matters relating to the patent. Seligson obtained permission from Florman to enter into an agreement with Menden and then signed such an agreement (the Menden Agreement). He understood that the Menden Agreement granted to Menden or his undisclosed principal a right of first refusal for a license under the patent. Menden then paid $2,000 to Seligson and Lanier, which, under the terms of the Men-den Agreement, was to be used only for the purpose of building a model of the invention. When Seligson and Lanier accepted the payment of $2,000, Seligson intended to build a model of the invention for Menden, and he and Lanier worked hard to do so. Seligson understood that if the model were satisfactory, Menden might seek a license under the patent. Despite their hard work, Seligson and Lanier were unable to complete a model because they ran out of funds prior to completion of the amplifier and power supply, an essential part of the device. Report to Editorial Around the end of January 1970, after completion of the loudspeaker testing, Seligson and Lefkow prepared a draft “Report to Editorial” for use by the editorial department in preparing a manuscript of the Article. The portions of the “Report to Editorial” which dealt with the Bose 901 were drafted entirely by Seligson. After review by Seligson’s superiors the draft was forwarded to the editorial department. The Bose 901 Portion of the Article was based on the material written by Seligson in the “Report to Editorial.” Product Disparagement The complaint in this case alleges a claim for relief for product disparagement. In cases such as this, where the plaintiff is a corporation, product disparagement is sometimes confused with the closely related tort of corporate defamation. Conceptually the two torts are easily distinguishable. Defamation of a corporation injures the reputation of the corporation itself, while product disparagement injures the reputation of its products. Dooling v. Budget Publishing Co., 144 Mass. 258,10 N.E. 809 (1887); Marlin Firearms Co. v. Shields, 171 N.Y. 384, 64 N.E. 163 (1902). In practice, however, the line between the two torts is often blurred because comments that disparage a product almost invariably reflect adversely on the manufacturer of the product as well. Dooling v. Budget Publishing Co., 144 Mass. 258, 10 N.E. 809 (1887); W. Prosser, Law of Torts § 128, at 918 (4th ed. 1971). The distinction between the two torts must be drawn because there are important differences in their required elements of proof. Both torts require proof of the publication and of the disparaging or defamatory nature of the statements involved. W. Prosser, Law of Torts § 128, at 920 (4th ed. 1971). In an action for product disparagement, however, a plaintiff must prove that the offending statements are false, Swan v. Tappan, 5 Cush. 104, 59 Mass. 104 (1850); Marlin Firearms Co. v. Shields, 171 N.Y. 384, 64 N.E. 163 (1902), whereas in an action for corporate defamation, falsity is presumed and truth is a defense which must be proven by the defendant. Restatement (Second) of Torts § 581A, Comment b (1977). In addition, if the action is for product disparagement, the plaintiff must allege and prove special damages — specific proof of pecuniary loss — before being entitled to recover. Dooling v. Budget Publishing Co., 144 Mass. 258, 10 N.E. 809 (1887); Marlin Firearms Co. v. Shields, 171 N.Y. 384, 64 N.E. 163 (1902). Until recently, at least, damages were presumed in an action for corporate defamation. Restatement (Second) of Torts § 569 (1977). It follows that because this is an action for product disparagement, the burden is on the plaintiff to prove that the statements made by CU were false and to prove the existence and amount of special damages. The Court severed the issue of damages from the other issues in this case, but not before the plaintiff made a minimal showing that it could produce evidence of special damages. CU urges that, before dissecting each statement contained in the Bose Portion of the Article, the Court should read the entire Article. According to CU, the Article, when read as a whole, is not disparaging at all, but complimentary to the Bose 901. The Court does not accept this characterization. The Article contains some statements that might be interpreted as complimentary, but the effect of that language is more than outweighed by other statements that are clearly critical of the Bose 901. The Court concludes that the Article, when read as a whole, is disparaging. The plaintiff claims that there are numerous factual errors in the Bose 901 Portion of the Article. In the following paragraphs each of the alleged factual errors will be discussed in turn, with regard to whether the statement is in fact false and with regard to whether the statement is disparaging. “Panels” The words “panel” and “panelists” appear throughout the Article, especially in the Bose 901 Portion. The Article does not explain, however, that there were in fact three different panels involved in testing the loudspeakers — the “A-B listening test” involved a panel of five CU employees, the “cricket test” utilized a panel of two CU employees, and the “special listening test” involved only Seligson and Lefkow. The plaintiff claims that CU’s use of the words “panel” and “panelists” without explaining that three different panels were involved was misleading. It was also misleading, according to the plaintiff, for CU to use the word “panel” when referring to only two people. Seligson himself testified that the use of the word “panel” to describe two persons could be “possibly a mite misleading.” Tr. 9-89. While the Court agrees that CU’s use of the words “panel” and “panelists” was misleading to the readers of the Article, it is difficult to see what harm such misleading use of terms caused the plaintiff. The misleading use of the words “panel” and “panelists” simply does not disparage the Bose 901. Equalizer Function The Bose 901 Portion of the Article said the following with regard to the Bose 901 active equalizer: The electronic equalizer is intended to further compensate for the relatively low bass efficiency of small speakers, to compensate for the loss of treble when sound is reflected from the walls, and thus to help provide a uniform overall response. The active equalizer can be adjusted, within limits, to vary the sound to individual taste. At trial the plaintiff contended that this statement was false. However, the plaintiff has represented that it no longer relies upon this asserted factual error as a basis for relief in this action and the Court will disregard it. Sound Quality The following statement was made in the Bose 901 Portion of the Article: As for sound quality, if the Bose 901 had been rated with the main group of tested speakers, it would have fallen between the high- and .medium-accuracy groups. The main body of the Article states: Over the years, CU has constantly refined its testing methods and examined repeatedly the relationship between measurable factors and listeners’ judgments on quality. From such studies, we arrived at two conclusions. First, loudspeaker quality, as the listener finds it, can be measured in the lab, but only roughly — to divide speakers into broad quality groups of the kind used in our Ratings. The plaintiff reads the two foregoing statements as implying that the Bose 901 had been subjected to careful, objective tests and measurements which had resulted in its being ranked below the “High Accuracy” loudspeakers. According to the plaintiff, none of the tests that were performed on the loudspeakers to determine their accuracy were objective at all, and, even if they could be considered objective, they were not performed on the Bose 901. Thus, the plaintiff contends, CU misled its readers into thinking that the sound quality of the tested loudspeakers, including the Bose 901, had been carefully and objectively measured and that the sound quality of the Bose 901 had been found lacking in some respects. The facts giving rise to the plaintiff’s claim are as follows. The “accuracy” ratings were derived in part from the “objective tests” that were performed on the loudspeakers. A “roughness index,” a “spectrum index,” and a “low frequency index” were determined for each of the conventional loudspeakers. These, three indices were then multiplied together to determine a score for each loudspeaker. After a score was determined for each loudspeaker, Seligson applied his own subjective judgment to alter the scores because he felt “the objective scores did not reflect the true standing.” Tr. 10-127. The final rankings of the conventional loudspeakers which appeared in the Article reflect the scores as altered by Seligson. The Bose 901 and the Harman-Kardon HK50 loudspeakers were never scored in this fashion because they were unconventional loudspeakers. The technique for evaluating the objective data generated by such unconventional loudspeakers was beyond CU’s capabilities at the time. Therefore, none of the three indices was determined for the unconventional loudspeaker. Nevertheless, the Article made the following statements about the unconventional loudspeakers. As for sound quality, if the Bose 901 had been rated with the main group of tested speakers, it would have fallen between the high- and medium-accuracy groups. Our judgment of the overall sound quality of the Harman-Kardon HK50 would place it in the lower section of the medium-accuracy group. Its sound was distinctly hollow and muddy. The Court agrees with the plaintiff that the Article implies that the accuracy of the tested loudspeakers was determined in an objective fashion. CU’s statement that “[ljoudspeaker quality ... can be measured in the lab ...,” creates the impression that such measurements made in a laboratory are objective ones, rather than the type of subjective judgments made by Seligson. The Court also agrees that the foregoing implication was false. The fact that objective scores were determined is of little consequence in view of the fact that Seligson subsequently altered those objective scores to conform to his subjective judgments. In addition to the fact that the tests that were performed on the conventional loudspeakers lacked objectivity, no objective scores at all were determined for the Bose 901 or for the HK50 loudspeaker. Standing by itself, however, the false implication that the accuracy of the tested loudspeakers was determined in an objective manner does not entitle the plaintiff to relief, because it is not disparaging. The statement that the plaintiff really disputes is CU’s rating of the Bose 901 as “between the high- and medium-accuracy groups.” The allegedly harmful effect of that statement could, of course, be exacerbated by the false implication that the accuracy of the loudspeakers was determined in an objective manner. Nevertheless, the false implication that the accuracy of the tested loudspeakers was determined in an objective manner, taken alone, does not reflect adversely on the Bose 901 and is thus not disparaging. The plaintiff also argues that because no objective score was determined for the Bose 901, it was impossible for CU to have rated the Bose 901 “with the main group of tested speakers.” Thus, CU’s statement that “if the Bose 901 had been rated with the main group of tested speakers, it would have fallen between the high- and medium-accuracy groups” must have been false. The plaintiff’s argument, however, presumes that the only way in which a loudspeaker could be rated “with the main group of tested speakers” would be if an objective score had first been determined for that loudspeaker. In reality, however, the objective -scores obtained in the tests were irrelevant for purposes of the ratings because the objective scores were subsequently adjusted by Seligson to conform to his subjective assessments. Seligson’s adjustments caused the entire rating process to be subjective. Therefore, no objective score was needed in order to rate the loudspeakers and CU’s failure to perform objective tests on the Bose 901 would not preclude CU’s rating of the Bose 901 “with the main group of tested speakers.” With regard to the “sound quality” or “accuracy” of the Bose 901, the crux of the dispute between the parties is CU’s rating of the Bose 901 as “between the high- and medium-accuracy groups.” The plaintiff contends that the Bose 901 should have been rated in the high accuracy group. The problem with the plaintiff’s position is that all the experts who testified in the case, including Dr. Bose, agreed that the evaluation of any loudspeaker’s “sound quality” or “accuracy” is a subjective matter. In the final analysis it is nothing more than an opinion and, as such, it cannot be proved to be true or false. As the Supreme Court said in Gertz v. Robert Welch, Inc., 418 U.S. 323, 339, 94 S.Ct. 2997, 3006, 41 L.Ed.2d 789 (1974), “Under the First Amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.” Power Requirements CU rated the tested loudspeakers in the Article with regard to a number of characteristics, including amplifier power. In its amplifier power ratings CU stated a figure in watts for each of the rated loudspeakers, ranging from a high of 27 watts for the Dynaco A25 to a low of four watts for the Yamaha NS15, explaining that: The power figure (in watts) is the minimum average sine-wave amplifier power found to be required to produce a loud sound in a listening room of about 3000 cu. ft. with “average” acoustics; Seligson testified that the “loud sound” referred to in the Article was approximately 85dB on average, with momentary peaks as high as 93-94dB. Tr. 11-27. The Dynaco A25 was the only loudspeaker rated by CU in the Article as requiring more than 15 watts of amplifier power. Thirteen of the nineteen rated loudspeakers were described as requiring less than 10 watts of amplifier power. PX-7, pp. 277-278. The Article also stated that the power requirement of a loudspeaker was “an important factor” to be considered in choosing a loudspeaker. PX-7, p. 273, column 2. With respect to the power requirements of the Bose 901, the Article stated: If you do consider buying the system, note well this fact: The Bose requires a rather gigantic amount of power. CU recommends you have an amplifier of 50 watts per channel for the deepest bass response. The parties seem to agree that the average reader would read the above-quoted statement in the context of the entire Article and would therefore infer that the recommended 50 watts of amplifier power was necessary for the Bose 901 to produce the deepest bass sounds at “loud” volume levels. PRFOF p. 113, DRFOF pp. 25-26 (Emphasis added). The plaintiff argues that the readers of the Article would interpret CU’s statement as meaning “that the Bose 901 required more amplifier power than any of the other speakers tested by CU, and that a user would require an amplifier having a power of 50 watts per channel to produce the deepest bass sounds from the Bose 901 at loud levels, whereas the other loudspeakers tested would require only a small fraction of that power.” PRFOF p. 113 (Citations omitted). According to the plaintiff, CU’s statement, so interpreted, is false because the Bose 901 does not require more power than the other rated loudspeakers to produce the deepest bass sounds at loud volume levels. The plaintiff also contends that the statement is disparaging because at the time of the Article’s publication very few consumers had amplifiers of 50 watts per channel or more. Therefore, in the plaintiff’s view, for the majority of consumers at that time, the Article’s recommendation was tantamount to advice not to buy the Bose 901. The Court has carefully considered all the evidence introduced by the parties on the issue of the power requirements of the Bose 901. The record with respect to this issue is replete with irreconcilably contradictory statements and evidence of questionable trustworthiness. It is difficult to understand why the record should be so muddled with respect to an issue such as the power requirements of the Bose 901, which both parties concede can be easily measured with the use of an oscilloscope. All that was necessary was a measurement of the power required by the Bose 901 under the same conditions as those used by CU in its original tests, yet neither party performed such a measurement. On the basis of the present record the matter is still entirely within the realm of speculation. Accordingly, the Court rules that the plaintiff has not sustained its burden of proving by a preponderance of the evidence that the defendant’s statements — “If you do consider buying the system, note well this fact: The Bose requires a rather gigantic amount of power. CU recommends you have an amplifier of 50 watts per channel for the deepest bass response.” — were false. Size and Movement The bulk of the testimony at trial concerned the following statements which were made in the Bose 901 Portion of the Article: But after listening to a number of recordings, it became apparent that the panelists could pinpoint the location of various instruments much more easily with a standard speaker system than with the Bose system. Worse, individual instruments heard through the Bose system seemed to grow to gigantic proportions and tended to wander about the room. For instance, a violin appeared to be 10 feet wide and a piano stretched from wall to wall. With orchestral music, such effects seemed inconsequential. But we think they might become annoying when listening to soloists. On an impulse, we also played some monophonic records through the Bose. To our surprise, they too acquired the same spacial openness and size distortions as the stereo records. Before discussing the size and movement of “individual instruments” it is necessary to define some terms which will be used in the following sections of this opinion. One characteristic of stereo loudspeaker systems is that when a listener is situated in the “ideal listening position,” equidistant from two loudspeakers, and the same sound emanates from the two loudspeakers simultaneously, the listener perceives the source of the sound not as either or both of the two actual loudspeakers but as a “phantom” or “apparent” source located somewhere between the two loudspeakers. There was a great deal of confusion in the terminology used at trial because there are no consistent, widely accepted terms used to describe this phenomenon. In this opinion the Court will use the words “apparent sound source” to describe the area located somewhere between two loudspeakers which the listener perceives to be the source of the sound arriving at his ears. Except when quoting the Article the Court will use the word “instrument” to refer to the musical instrument that originally produced music that is later reproduced by a stereo system. Size The testimony at trial concerning the statement about “instruments” which “seemed to grow to gigantic proportions” was confusing at times because the parties approached the issue from different viewpoints. The plaintiff reasoned that the average reader would interpret the above-quoted statement as meaning that the “panelists” actually perceived that the physical dimensions of the musical instruments whose sound was being reproduced had grown. Therefore, in an attempt to establish the falsity and disparaging nature of the statement, the plaintiff produced evidence that tended to show that a person listening to the Bose 901 could not possibly perceive that the physical dimensions of a musical instrument heard through the Bose 901 had grown. The defendant, on the other hand, concluded that the statement would be interpreted by the reader to mean that the apparent sound source of a particular instrument whose sound was being reproduced on the Bose 901 had become gigantic. Accordingly, in order to prove the truth of its statement, the defendant introduced evidence tending to show that it is indeed possible for a listener to perceive that the apparent sound source of an instrument played through the Bose 901 had become quite large. Because of the different approaches taken by the parties on this issue, the actual meaning of the words used becomes critical. Since this is a non-jury case it is the Court’s obligation to determine not only whether the above-quoted statement is susceptible of the meanings suggested by the parties, but also how the statement was in fact reasonably interpreted by readers of the Article. In making these determinations the Court must construe the words used in their natural sense, as persons generally understand them. Cafferty v. Southern Tier Publishing Co., 226 N.Y. 87, 93, 123 N.E. 76, 78 (1919); Lyman v. New England Newspaper Publishing Co., 286 Mass. 258, 260, 190 N.E. 542, 543 (1934). There is no evidence in the case that suggests that the words used would have any unusual meaning to any particular group, such as audiophiles, who might have more interest in the Article than the general public. The Court finds that the words used— “Worse, individual instruments heard through the Bose system seemed to grow to gigantic proportions and tended to wander about the room. For instance, a violin appeared to be 10 feet wide and a piano stretched from wall to wall.” — are susceptible of both of the interpretations suggested by the parties. The words could mean that the panelists perceived that the physical dimensions of the instruments themselves had grown; they could also mean that the panelists perceived that the apparent sound source had grown. The Court further finds, however, that the interpretation suggested by the plaintiff — that the panelists perceived that the physical dimensions of the instruments themselves had grown — is not a reasonable one and that the readers of the Article did not so interpret the above-quoted statement. In making the foregoing determination the Court relies not only on its own reading of the words of the Article, but also on the testimony of Dr. Bose, which the plaintiff offered at trial to show the falsity of the statements in the Article. Dr. Bose testified at length about the phenomenon of instruments growing to gigantic proportions and concluded that no one, when listening to a stereo loudspeaker system, could possibly conclude that the instruments that originally generated the sound that was being reproduced by the loudspeakers had grown to gigantic proportions. Common sense supports Dr. Bose’s conclusion. To the Court’s knowledge, no one has ever heard a 10-foot violin or a wall-to-wall piano being played, and it would be difficult for a listener to imagine the sound produced by something totally foreign to his experience. It would be impossible to conclude that a reader would interpret the words of the Article in such an absurd manner. The Court thus concludes that the statement in the Article about “instruments” which “seemed to grow to gigantic proportions” was interpreted by the readers of the Article to mean that the apparent sound source had become gigantic. The next question for determination is whether the statement is false even with that meaning impressed upon it. The defendant’s witnesses testified that one peculiar characteristic of the Bose 901 is that orchestral music played through the system has a diffuse quality — it seems to be coming from the entire wall behind the loudspeakers rather than from a discrete area along the wall or from the loudspeakers themselves. According to Seligson and Lefkow, however, a different effect is produced when a recording of a solo instrument is played on the Bose 901. Seligson and Lefkow agreed that what they observed during the “special listening test” was that individual notes produced by an instrument seemed to emanate from various points along the wall of the listening room, the location of those points varying with the frequency of the note being played. Seligson described his observations by using an analogy to the sense of sight: As best as I could describe it, it would be that — if you can imagine peering at an array of lights from a distance so when you view them they seem like a blur of lights somewhere in front of you; and in this array of lights there may be individual lights which twinkle more strongly and focus one’s attention upon them, but the twinkling shifts from point to point so that one’s attention is drawn first to one spot, then to another, but it would be difficult to see whether at those times when one’s attention shifts to a bright spot, whether one has suppressed the fact that there is a broad light source behind. This is something that occurs with time and it is a perception. It is difficult to recall precisely the manner in which I heard it, but that is about the best analogy that I could give you. Tr. 10-21. With the violin wide, the impression is one predominantly of sound coming at you from roughly the entire area in front of you. In other words, roughly from in front of the entire area. But individual notes, however, may occasionally seem to focus a little better in one location than in another and give the impression that that is where the violin is for that moment. And it is a shifting impression. Tr. 10-19. Lefkow described his observations as follows: Yes, the piano seemed very wide in the sense that you could hear the various tones from the piano come in at many points right across the front of the room. And the violin, as the violin is played, the violin — the source of the notes seemed to change as he played different notes. As he went up and down the scale, I heard the notes coming from different points, spread out between the two speakers. Tr. 12-157. The defendant’s expert, Dr. Green, testified that: I have heard things [through the Bose 901] that I would describe as, first of all, as very broad image. There is no question about that. Secondly, the source is hard to localize. It’s vague, and from moment to moment changes its location. So you might, especially on solo instruments, the apparent source moves from time to time. It could be located in any number of places in front of you. Tr. 14-110. As noted above, supra at p. 20, the plaintiff concentrated its efforts on proving that a person listening to music being played over the Bose 901 could not possibly perceive that the physical dimensions of the musical instruments which originally produced the music had grown in size. Therefore, the plaintiff did not present any evidence to contradict the defendant’s evidence which tended to show that when listening to the Bose 901 a listener could and does perceive that the apparent sound source is very large. Thus, the Court concludes that the plaintiff has not sustained its burden of proof by a preponderance of the evidence that the defendant’s statement —“instruments ... seemed to grow to gigantic proportions” — was false. Movement The Article states that CU’s panel, Seligson and Lefkow in this instance, heard individual instruments that “tended to wander about the room” (Emphasis added). At trial, however, both Seligson and Lefkow testified that the wandering sounds that they heard were confined to an area within a few feet of the wall near which the Bose 901 loudspeakers were placed. While conceding that the phrase “about the room” “may not be a literally accurate modifier of the verb ‘wander’,” the defendant argues that the consumer would only be interested in the phenomenon of wandering instruments, not in the locations to which they wandered. Thus, according to the defendant, its statement was “substantially accurate” because it accurately reported the critical observation — instruments that tended to wander. The Court does not accept the defendant’s characterization of its statement as being “substantially accurate” because, contrary to the defendant’s assertion, the' evidence indicates that the location of the alleged wandering would indeed be important to consumers. The testimony at trial showed that a certain degree of movement of the location of the apparent sound source is to be expected with all stereo loudspeaker systems. Such movement is a natural consequence of the stereo recording process and is due to the various polar radiation patterns produced by an instrument at various frequencies. Because such movement between two loudspeakers is a common effect and is to be expected, a reader would not be surprised to read about “instruments” moving along the wall between two loudspeakers. Movement throughout the other areas of the room, however, is not to be expected. Such a bizarre effect is contrary to what the average listener has become accustomed and would probably be found objectionable by most listeners. The Court concludes, then, that the location of ■the movement of the apparent sound source is just as critical to a reader as the fact that movement occurred, and that the defendant’s statement is not substantially accurate simply because it reported accurately that “instruments .. . tended to wander ... ”, The defendant claims that its statement about wandering “instruments” must be read as modified by the following sentence, which reads: “For instance, a violin appeared to be 10 feet wide and a piano stretched from wall to wall.” According to the defendant this sentence localized the wandering “instruments” along the wall between the two loudspeakers. The Court concludes that no reasonable reader would read these sentences as CU urges. The second sentence gives examples which could only be read by a reader as referring to the size of the “instruments,” not to their location. The Court also finds that the average reader would interpret the word “about” in its plain ordinary meaning. Florman agreed that the word “about” in this context means the same thing as “around”. Tr. 12-117, 118. In fact, Seligson’s initial draft contained the words “around the room,” rather than “about the room.” PX-10, at p. 29. The absence of similar observations by other listeners, both untrained and professional, tends to support the conclusion that Seligson and Lefkow did not hear “instruments” that “tended to wander about the room.” If the Bose 901 actually produced such unusual auditory effects it would be natural to assume that Bose 901 owners would complain to Bose about them. Yet Dr. Bose testified that to his knowledge no Bose 901 purchaser had ever complained to Bose about the Bose 901 causing “instruments” to appear to wander about the room. In addition, none of the reviews of the Bose 901 that were reprinted by Bose (DX-A) contain a statement that could be construed as referring to wandering “instruments.” On the contrary, one of the reviews (DX-A p. 13), published in Stereo & HiFi Times, contains the following statement, which seems to directly contradict CU’s comment about “instruments” that “tended to wander about the room”: A multi-directional speaker seems to have its sound escape from its box. The source of the sound becomes an area of space above and behind the actual enclosure. This is created beautifully by these speakers. A stereo pair fills the wall with stereo, yet each instrument has its prescribed space — and it stays there. You can spread these speakers much wider apart than conventional boxes without creating a “hole-in-the-middle” effect. DX-A, p. 13 (Emphasis added). Based on the foregoing analysis, the Court finds that the statement in the May 1970 Article that “individual instruments heard through the Bose system . . . tended to wander about the room” is false. The Court also finds that the statement is disparaging. A statement that attributes such grotesque qualities as instruments wandering about the room to the plaintiff’s product could have no effect other than to harm the reputation of the product. That such a harmful effect was intended is demonstrated by the use of the word “worse” to introduce the sentence. Use of the word “worse” obviously indicates that what preceded was a deficiency but what followed would be an even greater deficiency in the product. Dr. Bose, who attempted to combat the perceived negative effects of the Article by visiting and talking with his dealers, testified that with respect to the comments contained in the Article the most frequent complaints that he heard from dealers and consumers concerned “The enlarged and wandering instruments and the statement about gigantic power required.” Tr. 2-144. Thus, the false statement that “individual instruments heard through the Bose system . .. tended to wander about the room” cannot be considered a de minimis violation of the plaintiff’s rights. In summary, the Court has ruled that with respect to one statement made in the Article — “individual instruments heard through the Bose system ... tended to wander about the room” — the plaintiff has sustained its burden of proving by a preponderance of the evidence that the statement was both false and disparaging. With respect to each of the other statements contained in the Article the Court has ruled that the plaintiff has failed to sustain that burden in some respect. Because the Court has ruled that at least one statement contained in the Article was both false and disparaging, the remaining question for determination is whether the defendant observed the required standard of care in making that statement. Before making that determination, however, the Court must first assess the impact of the Supreme Court’s First Amendment decisions on the standard of care required of the defendant. First Amendment Issues In New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), the Supreme Court first announced the federal rule under the First Amendment “that prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with ‘actual malice’ — that is, with knowledge that it was false or with reckless disregard of whether it was false or not.” Id. at 279-80, 84 S.Ct. at 725-726. Under the New York Times rule, actual malice must be shown with “convincing clarity” rather than by a mere preponderance of the evidence. Id. at 285-86, 84 S.Ct. at 728-729. The Court extended the scope of the New York Times privilege in Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967), by holding that the constitutional privilege applies to defamatory statements about public figures as well as about public officials. The New York Times privilege was then given its most expansive reading in Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971), where a three-member plurality of the Court held that the privilege could also be asserted against a private individual involved “in an event of public or general concern.” Id. at 52, 91 S.Ct. at 1824. Under Rosenbloom the focus was no longer on the status of the plaintiff, but on the newsworthiness of the events involved. In Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), the Court rejected the Rosenbloom “public interest” test and reverted to a status based test. The Court held that “so long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual.” Id. 418 U.S. at 347, 94 S.Ct. at 3010 (Citation omitted). Thus, under Gertz, a plaintiff who is neither a public official nor a public figure is no longer required to prove that a defamatory statement was made with “actual malice.” Predictably, the defendant asserts the New York Times constitutional privilege as a defense to this action. The facts of the present case, however, raise some issues under the New York Times standard which are at present unsettled. For example, the two following questions must be confronted. 1) Does the New York Times actual malice standard apply to product disparagement cases as well as to personal defamation actions? 2) Can a corporation become a public figure and, if so, how? The Court’s resolution of the foregoing questions will determine whether the actual malice standard applies in this case. The Court must then determine whether the plaintiff has sustained its burden of proof under the applicable standard. Does the actual malice standard apply to product disparagement cases? All the Supreme Court cases to date which have applied the New York Times standard have been personal defamation actions rather than product disparagement cases or cases involving defamation of a corporation. Lower court decisions, however, seem to suggest that the actual malice standard should not be limited to personal defamation actions. A case in point is Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264 (3d Cir. 1980). In Steaks Unlimited a television station broadcast a report by its consumer affairs editor which deprecated the quality of the meat being sold by an out-of-state corporation at several local department stores. Because the report was also critical of the corporation’s business practices, the corporation brought suit for defamation rather than product disparagement. The court held that, because the corporation was a public figure under Gertz, the actual malice standard was applicable. In F & J Enterprises, Inc. v. Columbia Broadcasting Systems, Inc., 373 F.Supp. 292 (N.D.Ohio 1974), the court reached a similar result, although it should be noted that the court was applying the Rosenbloom “public interest” standard. In F & J Enterprises the plaintiff claimed that the defendants broadcast and published disparaging statements about the plaintiff’s product, “Krazy Straw.” Once again, as in Steaks Unlimited, supra, the case seems to have been treated as a corporate defamation case rather than a product disparagement action. The court, after determining that the statement concerned a matter of public interest, held that the actual malice standard applied. Neither Steaks Unlimited nor F & J Enterprises specifically addressed whether the actual malice standard applies in cases of product disparagement becaus