Finding IP Value
Influencer and Dress Designer Hayley Paige Gets Rights to TikTok Account, But Still Prohibited From Using Her Own Name
By: Alexa J. Elder
On February 14, 2022, the U.S. District Court for the Southern District of New York ruled that social media influencer and wedding dress designer Hayley Paige Gutman (“Gutman”) can maintain exclusive control over the “misshayleypaige” TikTok account but must share access to the “misshayleypaige” Instagram and Pinterest accounts with her former employer, JLM Couture Inc. (“JLM”). The decision came less than a month after the U.S. Court of Appeals for the Second Circuit vacated, in part, the district court’s previous injunction which granted JLM exclusive control over the “misshayleypaige” social media accounts (the “Disputed Accounts”)
The bitter and ongoing legal battle between JLM and Gutman began in December of 2020 when Gutman resigned from her role at JLM as the head designer of “Hayley Paige” wedding dresses nearly two years before her employment contract with the company expired. Following her premature resignation, Gutman unilaterally seized control of the Disputed Accounts, which had once been used to advertise JLM’s ‘Hayley Paige’ dress line. Under Gutman’s exclusive control, Gutman used the Disputed Accounts to promote herself, Hayley Paige Gutman, as a dress designer and social media influencer and to endorse third-party companies unrelated to JLM.
JLM filed suit against Gutman alleging, among other things, that Gutman’s use of the ‘Hayley Paige Gutman’ name, or any derivation thereof, constituted trademark infringement and clearly violated the terms of an agreement in which Gutman granted JLM the exclusive right to use the designer’s name, including ‘Hayley,’ ‘Paige,’ ‘Hayley Paige’ and ‘Hayley Paige Gutman’ (collectively the “Designer’s Name”), in connection with the design, manufacture, marketing and/or sale of bridal clothing and accessories until August 2022. Additionally, JLM argued that it was the rightful owner of the Disputed Accounts.
On March 4, 2021, the district court issued a preliminary injunction barring Gutman from using the Designer’s Name, i.e., Gutman’s legal name, in trade or commerce. The Court recognized, however, that the ownership of the Disputed Accounts presented a “novel” question and declined to evaluate the merits of JLM’s claim to the Disputed Accounts at the preliminary injunction stage. Nevertheless, in an effort to restore the operation and control of the Disputed Accounts to the manner in which they were operated prior to Gutman’s resignation, the Court granted JLM total control over the accounts for the duration of the litigation.
Gutman filed an appeal with the Second Circuit Court of Appeals and argued that the injunction improperly awarded JLM control over the Disputed Accounts and deprived Gutman from her own identity. In a split ruling, the Second Circuit agreed with the district court’s finding that the agreement between the parties clearly granted JLM the exclusive right to use the Designer’s Name in trade and commerce and affirmed the injunction to the extent it barred Gutman’s use of the Designer’s Name.
However, the Second Circuit determined that the district court exceeded its discretion in awarding JLM exclusive control over the Disputed Accounts. Specifically, the Second Circuit found that the injunction already barred Gutman from using the Designer’s Name in trade or commerce, and thus effectively prevented her from using the “misshayleypaige” social media accounts for commercial purposes. Moreover, the Second Circuit noted that Gutman and JLM vigorously disagreed as to which party was the rightful owner of the Disputed Accounts and the district court had declined to address the issue of ownership in its March order. Accordingly, it was “unclear on what basis the district court excluded Gutman from using the Disputed Accounts and granted total control to JLM.” Given this ambiguity, the Second Circuit vacated the injunction to the extent it granted JLM exclusive control over the Disputed Accounts and remanded the matter to the district court for further analysis and clarification.
On remand, the Southern District of New York engaged in a thorough analysis regarding ownership over the Disputed Accounts. Specifically, the District Court found Gutman was required, under the express terms of the agreement, to “assist [JLM] with advertising programs through the term of the Contract.” According to the court, JLM had produced credible evidence establishing that the “misshayleypaige” Pinterest and Instagram accounts were frequently used for advertising programs, and that JLM had provided Gutman with content and captions to post on the Instagram and Pinterest accounts prior to her resignation. Additionally, Gutman had emailed JLM employees a “social media overview” regarding activity on the Instagram and Pinterest accounts during her employment. In the district court’s view, this evidence sufficiently demonstrated that JLM would likely succeed on its claim that Gutman breached her duty to assist JLM with advertising programs when she took total control over the Instagram and Pinterest accounts for self-serving purposes and stopped advertising JLM’s content on the accounts prior to the agreement’s expiration.
However, the District Court determined that JLM had proffered insufficient evidence that the “misshayleypaige” TikTok account served as an advertising platform during Gutman’s employment. Unlike the Instagram and Pinterest accounts, there was no evidence establishing that the TikTok account was ever used in connection with the promotion of JLM’s brands. Accordingly, the Court modified its previous injunction and granted Gutman total access and control over the “misshayleypaige” TikTok account.
The court also modified the earlier injunction to the extent it granted JLM exclusive control over the Instagram and Pinterest accounts. Under the terms of the most recent injunction, Gutman and JLM are entitled to joint access to these accounts, but must utilize the accounts in a manner consistent with their duties under the agreement and the other terms of the injunction – in other words, Gutman is still prohibited from using any of the accounts bearing the “misshayleypaige” name in trade or commerce.