Trademark

When is a Wedding Dress Designer a Horse?

When she gives her employer broad rights to use her name even after her employment ends. 

Of course, of course. 

This may sound like a bad (or completely nonsensical) Mr. Ed joke, but allow me to explain. Here is the story of renowned wedding dress designer Hayley Paige Gutman, who recently announced she will henceforth be known as Cheval (aka “horse” in French). Why? Because, as a result of an agreement with her former employer, she no longer owns the Instagram account she created and which bears her name. 

This case is particularly interesting to me because (1) it shows how existing laws — here, contract and the work-for-hire doctrine — are applied to new platforms and novel situations, and (2) the Court went to great lengths in an attempt at resolution, but ultimately, simply went back to existing laws to reach a decision. 

Let’s begin with the facts: In 2011, Gutman entered into an employment agreement with a company named JLM Couture, which designs and manufactures luxury bridal gowns. The agreement stated Gutman would neither compete with her employer nor use her name in connection with wedding dresses and bridal items during its term and for two years after its termination. Gutman also agreed that JLM would own everything she created in connection with her employment and could trademark her name — some pretty broad rights. In exchange, JLM promised to invest money into the “Hayley Paige” brand and pay Gutman a salary and royalties. Of course, this being the modern age, a vital marketing element for the venture was the Instagram account @misshayleypage that Gutman created shortly after entering into the contract and which was used to promote the dresses she designed for JLM. 

Everything was fine — at least, from a legal standpoint — until 2019 or 2020, when negotiations over a new contract broke down. Gutman locked JLM out of the Instagram account and began using it to promote non-JLM products. JLM sued Gutman for, among other things, breaching her agreement by taking over the account; JLM also sought to prevent Gutman from using the @misshayleypage Instagram unless approved by JLM. The lower court agreed with JLM.

Gutman appealed and the Appellate Court found the lower Court wrong to restrain Gutman without first deciding whether JLM could show it owned the social media accounts and sent the case back to the lower Court to figure that out. 

Once there, Gutman argued this question was answered by the fact that she created the Instagram account as a personal account. The lower Court was not convinced. It said that the issue needed to be resolved by looking at: (1) how the Instagram account was described to the public; (2) how it was used; and (3) if JLM employees accessed it. Based on this, the Court held that JLM was likely to succeed on its claim that it owns the Instagram account or, at least, show it had superior rights to the account because it linked to JLM websites and was regularly used to promote JLM’s business and communicate with its customers.

The Court also noted that, under her contract with JLM, Gutman agreed that anything she developed in connection with her employment belonged to JLM. To me, it seems like the Court could have saved itself a lot of time by starting there. In my view, there was no need to dissect the use of the Instagram account in order to determine ownership just as there would have been no need to debate ownership of, say, a printed JLM catalog featuring a dress designed by Gutman. The employment agreement covered all materials related to the Hayley Paige brand regardless of media type or who initiated its creation.

As a result, the “Hayley Paige” brand and Instagram account continue to be owned by JLM, and Gutman is operating as Cheval. I’m really curious to see whether the @misshayleypaige followers will follow her Cheval Instagram and whether she will be able to monetize this new persona. Will the answer be yay or… neigh?

Sorry, it had to happen. 

 

U.S. Government Input on NFTs and IP Law….Eventually

On June 9, 2022, Senators Patrick Leahy (D-VT) and Thom Tillis (R-NC), the Chair and Ranking Member of the Senates Judiciary Committee’s Subcommittee on Intellectual Property, sent a letter to the Director of the United States Patent and Trademark Office (PTO) and the Director of the United States Copyright Office (Copyright Office) asking them to complete a study on various issues related to non-fungible tokens (NFTs). The non-exhaustive list of topics in this letter includes:  

  • What are the current and future intellectual property and intellectual property-related challenges stemming from NFTs? 
  • Can NFTs be used to manage IP rights? 
  • Do current statutory protections for copyright, for example, the Digital Millennium Copyright Act, apply to NFT marketplaces, and are they adequate to address infringement concerns?  

On July 8, 2022, the PTO and Copyright Office responded to the Senators. In their response, they stated that they would consult with relevant stakeholders and complete the requested study.  

While the list provided by the Senators is a good starting place, the fact that they gave the PTO and Copyright Office until June 2023 to complete the study, means that it’s going to be a while until we have any additional information from the PTO and Copyright Office.  Moreover, while the PTO and Copyright Office certainly have a role to play here, the legal framework will continue to develop as Courts rule on cases involving NFTs. 

Potentially Offensive Trademarks Are OK

Until today, the United States Patent and Trademark Office  (“USPTO”)  could refuse to register trademarks (or cancel trademarks) on grounds that they were potentially disparaging or offensive. In 2014, the USPTO used this provision to cancel trademarks for the Washington Redskins find they were offensive to Native Americans.  It also relied on this provision to deny a trademark to a band called the Slants, a term the USPTO concluded was offensive to Asian-Americans, but which the Slants said was an effort to reclaim a previously derogatory term.  The Supreme Court today concluded: “Speech may not be banned on the ground that it expresses ideas that offend.”

If you’re curious, the decision is available here.