A recent case is making headlines, and every business owner using their own name in business needs to keep an eye on the outcome. Wedding dress designer Hayley Paige Gutman recently revealed that she is in the midst of a contentious legal battle with her former employer, JLM Couture. While there is quite a bit to unpack, here is why business owners should keep an eye on this case:
Hayley Paige Gutman is one of the world’s most well-known wedding dress designers, known worldwide and appearing on shows like “Say Yes To The Dress”, who has been employed by JLM Couture since appx. 2011. HP has many sub-brands to her brand, Hayley Paige. At the root of the claim, JLM Couture is claiming unfair competition, federal and common law trademark dilution, and breach of fiduciary duty, among others. In essence, they are claiming exclusive rights to the “Hayley Paige” name and any variation thereof, which would include her sub brands.
Here is a snapshot of the brands trademarked on a federal level (this does not include common law trademarks):
The Parties entered into her employment agreement when she was “relatively new to the fashion industry” in 2011.
Specifically, JLM is claiming that the employment agreement with HP is still in effect, and that they have rightfully exercised the option “to extend the term of the agreement by at least 3 additional years”, a provision contemplated within the agreement. JLM is also claiming that because HP began using her name as the brand name from the commencement of her employment, for both advertisement purposes, and on social media, the use of her name is synonymous with her work with JLM, and therefore, the name “Hayley Paige” is rightfully owned by JLM within the scope of HP’s employment.
According to JLM, HP’s use of her name as both a promotional brand tool, purely for advertising purposes, as well as her social media, allowed JLM to obtain “lucrative cross-marketing agreements and tie-ins to capitalize on Gutman’s growing recognition,” on platforms such as her Instagram account (with 1.1 million followers), appearances on “Say Yes To The Dress”, and more.
As time has gone on, both the manner and means of HP’s use of social media have naturally evolved. She extended her presence to other platforms, such as TikTok, and apparently began using her Instagram account for more personal promotional purposes. JLM claims that this was problematic because, according to JLM, these actions breached her contract by failing to “properly represent the Hayley Paige” brands, and, moreover, the “misshayleypaige” Instagram account fell within the scope of the rights HP granted to JLM when she signed a contract containing the language “the exclusive world-wide right and license to use” her name.
When HP broke the news to her followers this fall on her new account @allthatglittersonthegram, she shared that the biggest mistake, and biggest takeaway that she wanted to share with her followers was not having a lawyer advocate for her contractual rights when she entered into this Agreement as a young entrepreneur. Now, based on the language in the contract, JLM is claiming that the right to designs she created during her employment became the property of JLM, and that HP was also required to grant JLM the exclusive right to use “her name ‘Hayley,’ ‘Paige,’ ‘Hayley Paige Gutman,’ ‘Hayley Gutman,’ ‘Hayley Paige,’ or any derivative thereof in connection with the design, manufacture, marketing and/or sale of bridal clothing, bridal accessories and related bridal and wedding items, including and all good will associated therewith for the term of the agreement, and for a period of two years, thereafter.”
An additional paragraph to the Agreement comes into play in the event that JLM “exercised its right to file for an obtain a federal trademark registration for such name”, in which case, the Agreement states that HP has “irrevocably [sold, assigned, and transferred] all right, title, and interest to [JLM] that now exists or may exist during the term [of the parties’ agreement] and for a period of two years thereafter, to register [her] name or any derivative(s) thereof as trademark with the U.S. Patent and Trademark Office and/or other authorities in the U.S. or abroad.”
The argument came to a head when, in the summer of 2020, HP argued that her Instagram account was her personal property, which JLM argued was in breach of their contractual agreement. By “using the account to fulfill Gutman’s own interests”, this action was equivalent to taking “steps to convert it from a JLM company account….to her own business platform, as if she were an influencer.”
In a word, yes; but doing so is difficult.
Courts have held that individuals may lose the rights to their personal name, particularly when an individual has signed a contract signing those rights away for commercial purposes, or an acquisition. For example, courts sided with the company when Bobbi Brown was acquired by Estée Lauder Companies in 1995, or when Kate Spade sold her company to Liz Claiborne in 2007. In each of these cases, the courts’ reasonings were largely based upon the terms of the controlling agreements, which again drives home the importance of having a carefully-drafted intellectual property clause in any contract.
HP’s case is still in the early stages, so time will tell if she is successful in her claims to her name or not. However, JLM has presented claims of federal trademark dilution, arguing that HP’s “confusingly similar use” of the various “Hayley Paige” trademarks and the Instagram account “since at least July of 2020,” as well as her “efforts to pass off [her] endorsement of third parties’ goods and services, as being part of, marketed, sponsored, licensed or otherwise authorized or approved by [JLM] when they are not, are eroding the distinctiveness of the [Hayley Paige] trademark and the @misshayleypaige trade name.” JLM also argues that because any future use of the Hayley Paige name is “likely to cause confusion in the marketplace as to the source, origin, or sponsorship of the goods”, and as a byproduct, HP is engaging in false designation of origin and unfair competition by using its trademarks even if those marks include her name.
As the case presently stands, the presiding judge has issued a temporary restraining order in favor of JLM, eliminating HP’s access to the @misshayleypaige Instagram account. In the video announcing the news to her audience, HP states that if there is “only one thing” that viewers take away from her video it is that “if anyone tells you that you don’t need a lawyer to take a look at an agreement or contract, please get a lawyer.”
We will be watching this case closely, as it provides valuable precedent to the question of: when it comes to mixing business and personal, who really owns a name? When building a business containing your own name, ensure that every contract you enter into has been carefully reviewed by an attorney knowledgeable in intellectual property, whether those be employment or acquisition documents. For more information as to how to ensure that your brand is properly protected, contact us at email@example.com for a 1:1 consultation.