The Court held, on a 6–3 vote, in favor of Consumers Union, the publisher of Consumer Reports magazine, ruling that proof of "actual malice" was necessary in product disparagement cases raising First Amendment issues, as set out by the case of New York Times Co. v. Sullivan (1964).

Bose demanded a retraction when they learned that Consumer Reports changed what the original reviewer wrote about the speakers in his pre-publication draft, which the magazine refused to do.

The Massachusetts district court had heard testimony from an author of the article that the instruments heard through the 901's speakers tended to wander "along the wall," rather than "about the room," as had been stated in the article; and found that this constituted a publication of a false statement with the knowledge that it was false.

The appeals court, however, had agreed with Consumers Union that under the precedent set by New York Times Co. v. Sullivan (1964), the appeals court had to review the entire matter de novo in order to determine whether the false fact was published with "actual malice."

As Bose had not presented sufficient evidence of actual malice, the appeals court ruled, the judgment was required to be overturned.