On March 4, 2021, a federal trial court in New York issued a preliminary injunction that halted a bridal gown designer and social media influencer from using her social media accounts without her former employer’s permission. JLM Couture, Inc. v. Gutman, No. 20 CV 10575-LTS-SLC (S.D.N.Y. March 4, 2021) (2021 WL 827749).Background
The case began in 2011, when Hayley Paige Gutman signed an agreement with her new employer, bridal gown designer and manufacturer JLM Couture. The employment agreement had an initial five-year term, which the company could extend for an additional six years. The agreement did not give the employee any right to terminate. The agreement also granted JLM certain exclusive rights to use and trademark the name “Hayley Paige” and variations thereof during the term of the agreement and for two years thereafter. JLM thereafter registered a trademark in “Hayley Paige.”
While she was employed by JLM, Ms. Gutman created social media accounts on three social media platforms, all using the name “misshayleypaige.” She used the accounts to document events in her life as well as in conjunction with JLM’s advertising programs to display her gowns and apparel. JLM made social media, including the misshayleypaige accounts, a part of its efforts to market the Hayley Paige brand, and some of its employees assisted Ms. Gutman with content for her accounts. Consumers would contact Ms. Gutman through social media to ask where they could obtain the bridal gowns, and bridal store owners also used the social media accounts to see and show the gowns.
In November 2019, Ms. Gutman changed the access credentials for her social media account and did not share them with JLM. In July of 2020, Ms. Gutman entered into an “influencer” deal with Chosen Foods, a salad dressing company, without JLM’s knowledge or approval. Ms. Gutman also used the misshayleypaige accounts to promote a nutritional supplement of another third party, Optimum Whey, without JLM’s knowledge or approval. She admitted she had entered into an “informal agreement” with her fiancé, who had a contract with Optimum Whey, under which the fiancé gave Optimum Whey permission to use Ms. Gutman’s name on her behalf. On November 23, 2020, Ms. Gutman informed JLM that she would “not be posting any JLM related business” to the social media account. In December of 2020, Ms. Gutman announced on social media that she was resigning from JLM, and JLM filed a lawsuit in federal court, alleging trademark infringement among other claims.
With respect to the trademark infringement claim, the court used an eight-factor analysis:
(1) strength of the trademark; (2) similarity of the marks; (3) proximity of the products and their competitiveness with one another; (4) evidence that the senior user may “bridge the gap” by developing a product for sale in the market of the alleged infringer’s product; (5) evidence of actual consumer confusion; (6) evidence that the imitative mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of consumers in the relevant market.
The court ruled for JLM on the first factor because it had registered the trademark, which carries a presumption that the mark is inherently distinctive. The court also ruled for JLM on the second factor, because “misshayleypaige” incorporated the full “Hayley Paige” mark.
The third factor—proximity and competitiveness of the products—was a bit more problematic for JLM because it conceded that bridal gowns and nutritional supplements and salad dressing were dissimilar. Nevertheless, the court ruled for JLM on this factor as well because of the overlap of the consumers who were viewing the misshayleypaige social media accounts that promoted all three items.
JLM conceded the fourth factor—“bridging the gap”—because it did not intend to go into those product areas.
With respect to the fifth factor, the court found actual confusion because consumers contacted Ms. Gutman both with respect to gowns and the food items, which the court found that “consumers believe that the Account and the “misshayleypaige” mark the Account operates under are affiliated with both sets of products.” The court also found that Ms. Gutman’s actions—from locking out JLM from the accounts to promoting third party goods—likely constituted bad faith, the sixth factor.
The court found that the seventh and eighth factors did not favor either party. With respect to the seventh factor, the court found that this “factor is in the main concerned with harm arising from confusion with a product of inferior quality, not differing products or price-points.” As for the final factor—sophistication of the consumers—the court found that the parties did not present relevant evidence.
The court also found that Ms. Gutman’s actions warranted a preliminary injunction: “Plaintiff’s loss of control of its reputation and goodwill is not precisely calculable, and therefore Plaintiff will suffer irreparable harm absent injunctive relief.”
The preliminary injunction
JLM posted a $200,000 bond but received a preliminary injunction that included:
- Ms Gutman was enjoined from making any changes to the social media accounts, including “changing the name of the handles on the accounts, posting any new content thereto and/or deleting or altering any content located therein, tagging any other posts, users or accounts, transferring any such accounts or the right to use” the accounts, except with the express written permission of JLM’s CEO.
- Ms. Gutman was enjoined from “using, or authorizing others to use, “Hayley”, “Paige”, “Hayley Paige Gutman”, “Hayley Gutman”, “Hayley Paige” or any derivative thereof, including misshayleypaige . . .in trade or commerce,” without the express written permission of JLM’s CEO.
- Ms. Gutman was ordered to turn over the usernames and passwords for the social media accounts.
This case not only demonstrates the issues when your name becomes a trademark, it also proves how important trademark registration can be and how powerful trademark remedies can be in protecting a business.