Hayley Paige Gutman, a renowned American bridal wear designer, found herself embroiled in a legal battle with her former employer, JLM Couture, in 2020. The dispute centered on the rights to her brand name, “Hayley Paige,” and control over her social media accounts. JLM Couture, a giant in the “bridal” clothing industry, was launched by Joseph L. Murphy in 1988. JLM Couture is the parent company to well-known bridal labels, including Jim Hjelm, Lazaro, Tara Keely, Alvina Valenta, and Hayley Paige.
Gutman started her career with JLM in 2011, with her creative and whimsical designs garnering significant attention. However, their collaboration reached a contentious point in December 2020, leading JLM to file a lawsuit against Gutman.
Hayley Paige vs. JLM Couture: A Battle for Brand Control
The Employment Agreement: Assigning Rights to the Brand Name “Hayley Paige”
In 2011, Hayley Paige Gutman also referred to as Gutman, entered into an employment agreement with JLM Couture, which originally ran through 2016, but was later extended through August 1, 2022.
Gutman was formally hired to be a “designer of a line of brides and bridesmaids dresses,” and tasked with development of the Hayley Paige brand for its parent company. Meanwhile, Gutman also garnered attention on her social media platforms under the name “Miss Hayley Paige”.
As per the contract, Gutman was required to perform a list of duties which included “travelling, assisting in and/or supervising manufacturing, assisting with advertising programs and designing apparel.” A noteworthy detail in the contract was that the right to terminate the contract was held only by JLM and not by Gutman.
Other elements of the contract included a non-compete clause as well as the name-rights agreement clause, according to which, Gutman was prohibited from competing with JLM during the course of her employment which meant that Gutman could not participate in any act which could be deemed to be in direct/indirect competition with the parent company or established (read that as establish her as an individual entity/designer outside of the parent company) and also granted JLM certain rights over the use of “Designer’s Name”, which included the following; ‘Hayley,’ ‘Paige,’ ‘Hayley Paige Gutman,’ ‘Hayley Gutman,’ ‘Hayley Paige,’ or any derivative thereof.”
Gutman agreed to give JLM “exclusive world-wide right and license” to the designer’s name in connection with bridal wear for the extended term plus two years, “provided Gutman has substantially participated in the design or creation of such clothing or related items.” Should JLM fail to register Designer’s Name as a trademark, that license dissolves two years after “termination of [Gutman’s] employment.” Gutman also agreed to transfer to JLM the right to register the Designer’s Name as trademarks (the “Trademarks”) for the extended Term plus two years.
The contract further reiterated that Gutman “assign[ed] to [JLM]….the Designer’s Name and the Trademarks.” and that “all designs, drawings, notes, patterns, sketches, prototypes, samples, improvements to existing works, and any other works conceived of or developed by [Gutman] in connection with her employment” involving bridal products (the “Designs”) “are works for hire” deemed to be owned by JLM which meant that Gutman did not hold any copyright claims to her designs made during the period of her employment with JLM.
“The Trademarks shall in perpetuity be the exclusive property of [JLM], [Gutman] having consented to it being filed by [JLM] and [Gutman] shall have no right to the use of the Trademarks, Designer’s Name or any confusingly similar marks or names in trade or commerce during the Term or any time thereafter without the express written consent of [JLM].”
The Dispute: Social Media, Non-Compete Clauses, and Trademark Infringement
In 2019 Gutman and JLM, engaged into contract negotiations pertaining to Gutman performing additional duties which involved social media monetization opportunities on platforms like Instagram. However, JLM’s proposal was rejected by Gutman, following which she blocked the access of JLM team from her social media accounts and also changed her bio to specifically provide “personal & creative account of the designer Hayley Paige”. Gutman also entered into agreements with third-party companies to promote their products on her instagram platform “@misshayleypaige” which was without the authorisation of JLM and also promoted her appearance at a virtual bridal expo promoting her as a “wedding gown designer”.
In the suit filed in 2020, JLM alleged violation of the non-compete clause by agreeing to appear at the bridal expo in her capacity as a designer and the infringement of JLM’s rights over the designer’s name, which had been breached, since the instagram handle “@misshayleypaige” was engaged in promoting third party products, and lastly by limiting JLM’s access to social media accounts. Accordingly, JLM sought injunctive relief against the designer.
Though the court did not comment on the ownership rights of the disputed social media accounts, it found JLM’s claims of contract infringement valid and subsisting and thereby ordered Gutman to strictly adhere to the terms of the agreement. This allowed JLM to regain its control over the disputed social media accounts and a permanent injunction order against Gutman. Thereafter, JLM modified the disputed account from a “public figure” account to a “clothing (brand)” account, changing its bio to mention “Official page of Hayley Paige Bridal” and “Managed by MHP Social Team”.
However, the critical juncture of this case lies on the name-rights agreement arising out of the employment contract and its ramifications for Gutman and what it can mean for her proprietary rights over the disputed social media accounts.
The Court’s Decision: A Grey Area in Social Media Ownership
The Court noted that the rights to Hayley Paige’s intellectual property were indeed assigned to JLM Couture by virtue of her employment agreement, rather than through a collaborative effort between the two parties. This distinction underscores the direct relationship between Paige’s professional engagement with JLM Couture and the transfer of her brand assets to the company’s control. The language of the contract suggested a clear intention to tie the ownership and utilization of Paige’s intellectual property directly to her employment status within the organization. Since the parent company had subsequently filed ten trademark registrations that included the designer’s name, it asserted its proprietary rights over the intellectual property in the brand “Hayley Paige”.
While, Hayley Gutman contended that her social media profiles, including her Instagram account, were never part of her contractual agreement with JLM. Gutman emphasized that the Instagram account initially served as a personal platform and had consistently featured a substantial amount of personal content. She stressed on the fact that JLM never had authority over these social media channels, as they were not addressed in Gutman’s employment contract. On the other hand, JLM asserted that Gutman’s obligations under the contract encompassed social media presence. According to the parent company, Gutman’s responsibilities extended to social media advertising of the brand and creating a presence for the same on social media platforms.
In this case,the employment agreement with JLM Couture played an important role in determining control over the “Hayley Paige” brand, including social media accounts. The agreement stipulates that Hayley Paige assigned her IP rights in the IP to JLM Couture, then it’s likely that JLM Couture owns the rights to those registrations, including the ones where her name was added. This would mean that Hayley Paige does not independently hold the rights to these registrations. independently.
The agreement stipulates that Hayley Paige assigned her IP rights in the IP to JLM Couture, then it’s likely that JLM Couture owns the rights to those registrations, including the ones where her name was added. This would mean that Hayley Paige does not independently hold the rights to these registrations.
The Name-Rights agreement explicitly stated that Gutman “irrevocably sells, assigns, and transfers all right, title, and interest” to JLM Couture regarding the use of her name and any derivatives thereof as trademarks or service marks. Accordingly, JLM Couture holds exclusive ownership of the trademarks related to Gutman’s name, and she has consented to their registration by JLM Couture.
Additionally, Gutman is prohibited from using her name or any confusingly similar marks in trade or commerce during the term of the agreement or thereafter without JLM Couture’s express written consent. Therefore, despite Gutman’s involvement in designing and creating during her employment, the agreement effectively transfers all rights to her name-related intellectual property to JLM Couture. This limits Gutman’s ability to use “Hayley Paige” and associated trademarks without JLM Couture’s permission, emphasizing the extent to which her rights to IP have been assigned to the company.
Social Media Ownership: Unanswered Questions Remain
The Hayley Paige Case: Lessons for Influencers and Brands
The Appellate Court however, pointed out that the district court had not sufficiently established the “ownership” over the disputed accounts and that without determining the same, it could have had perhaps exceeded its jurisdiction by limiting Gutman from property that was legally hers, herein being the social media accounts which act as intangible assets. In this era of social media where one’s name is associated with not only their personal identity but also their public persona as in the case of public figures and celebrities social media ownership is an equally crucial asset in corroborating your right over your brand name or namesake as seen in this case of Hayley Paige, where all was lost due to specific clauses in a contractual agreement. This legal clash highlights the importance of social media in brand marketing and the potential disputes over account control. A pertinent example of this dynamic is the case of brand ambassadors, whose social media posts and public appearances are often subject to scrutiny and direction from the companies they represent or the social media management firms they ultimately link themselves up with.
In the context of Hayley Paige’s dispute with JLM Couture, the issue of control over content comes to the forefront. While Gutman was not just an influencer but also a key figure in the fashion industry, her contractual relationship with JLM Couture did not mention anything about using her “likeness” for the purpose of content creation, however, it did include assisting in advertising as one of the key responsibilities. Usually, a typical brand ambassador or artist management agreement can grant companies significant influence over an individual’s public image and the content they produce, particularly if their brand identity is deemed to be at stake. When Hayley Paige signed an agreement with JLM Couture, her role as an employee instead of as an collaborator at equal footing leaves very less scope for negotiation or to establish her individual and independent rights in the brand name and the related IP.
However unanswered question in this case concerns the ownership rights over social media accounts as commercial assets. Since Gutman conceded the intellectual property rights to her name and designs, it’s unclear if the same applies to the content she posted. How would a court distinguish between her personal posts and advertisements by JLM Couture in terms of ownership rights?
Furthermore, disentangling the source of Gutman’s social media popularity is challenging. Was it due to her personal identity as a designer, or her association with the “Hayley Paige” label? Can these elements even be truly separated?
The Hayley Paige case is a modern illustration of the intricate relationship that exists in the digital era between individual liberty and corporate power. It poses significant questions regarding the degree to which people can continue to exercise their right to creative expression and autonomy while working within the constraints of brand alliances and contractual duties. Managing these relationships will be an important factor going forward for influencer marketers as well as the people they work with.
