NEW YORK, March 5, 2021 /PRNewswire/ — After carefully reviewing each parties’ evidence and observing the demeanor and assessing the credibility of the witnesses, Manhattan Federal Court Judge Laura Taylor Swain granted JLM Couture’s Motion for a Preliminary Injunction and enjoined Gutman from further use of the @misshayleypaige social media brand accounts and Hayley Paige trademarks.
Judge Swain found that JLM demonstrated a clear likelihood of success in proving Hayley Paige Gutman breached her employment contract and infringed the company’s trademarks.
Judge Swain also held that “under the unambiguous terms of [the employment contract] Ms. Gutman has ‘no right to the use of …[@misshayleypaige] in trade or commerce during the Term or any time thereafter without JLM’s consent’.” The Court said, “the credible evidence tendered at the Preliminary Injunction Hearing established that Ms. Gutman used the Designer’s Name in the form of the Account handle and otherwise in commerce for her own benefit during her employment, without the knowledge or permission of [JLM]”.
The Court found that Ms. Gutman “contracted away any right to monetize the [Hayley Paige trademarks]” and “voluntarily, knowingly and intelligently, in exchange for consideration, waived her rights to use the designer’s name for commercial purposes without JLM’s permission.” The Court also found that Ms. Gutman’s reading of her contract to try to narrow that prohibition “conveniently (but illogically) ignore[d]” other provisions and was “inconsistent with the plain language of” the relevant section of the contract.
Judge Swain wrote, “Ms. Gutman developed the [@misshayleypaige] Account within the scope of her employment with [JLM]. Using the [@misshayleypaige] Account to promote JLM’s goods was the kind of work she was employed to perform, as it was commensurate with her position as a lead designer.” Ms. Gutman discussed a marketing strategy for the Hayley Paige brand of bridalwear with JLM’s President and CEO Joe Murphy whereby they would “combine the personality with the brand.”
“Mr. Murphy testified credibly that this was the Hayley Paige brand’s marketing strategy ‘from day one’,” Judge Swain wrote in her 57-page opinion. The “unique blend of product and personality was a big part of [JLM’s] strategy because then brides feel closer to the brand,” according to court testimony.
JLM “has made a clear showing of likely success on its claim that Ms. Gutman’s commercial and confusing use of the Account breached the Contract and that ongoing unauthorized “influencer” use of the Account would also breach the Contract.”
The Court disagreed with Ms. Gutman’s argument that the establishment and maintenance of the Account were unconnected with her employment duties in the Contract and disagreed that her refusal to post JLM content was not a breach. The Court held that the “express provisions of the Contract render Ms. Gutman’s position untenable.” Judge Swain wrote, “No reasonable, objective reading of [Ms. Gutman’s employment contract] could logically exclude social media from the scope of Defendant’s advertising assistance duties, particularly where JLM specifically asked Ms. Gutman to make social media posts of content on an account whose handle is the exclusive property of the company.”
In analyzing the trademark infringement claim, the Court found that Ms. Gutman’s actions were “indicative of bad faith use of the marks that she had transferred to [JLM] under the Contract. “Ms. Gutman knew that her contract prohibited her from using the JLM trademarks in commerce…” Furthermore, “Ms. Gutman’s ‘informal’ agreement’ with her fiancé to use her trademarked name in a way that apparently sought to avoid explicitly contracting with a third party to use that name in commerce evidences an intent to trade on [JLM’s] goodwill.” The Judge found that Ms. Gutman “surreptitiously” approved third-party use of trademarks to which JLM has “permanent exclusive contractual rights” to, and that “Ms. Gutman used and wished to continue to exploit for her exclusive economic benefit.”
The Court held that JLM provided “persuasive evidence of Ms. Gutman’s willingness to violate [JLM’s] trademark rights and material provisions of the Contract that protect [JLM’s] goodwill and investment in the Designer’s Name by using the account to deliver posts promoting third-party products for direct and indirect compensation . . . and surreptitiously approving” third party’s “use of her name and image as a designer and developer of JLM products in an endorsing influencer post…”
JLM took legal recourse against Ms. Gutman on December 15, 2020, after the designer locked the company out of the Instagram social medial account, refused to post any JLM branded wedding gown-related content, and posted third-party deals for Ms. Gutman’s exclusive economic benefit without JLM’s permission. The Court granted a temporary restraining order on December 16, 2020.
Mr. Murphy continues to recognize and value Ms. Gutman’s talent and remains hopeful that that JLM and Ms. Gutman can reconcile their differences.
JLM is represented by Sarah M. Matz and Gary Adelman of Adelman Matz P.C.
JLM owns Hayley Paige, Blush by Hayley Paige, Hayley Paige Athleisure, Jim Hjelm By Hayley Paige, Hayley Paige Occasions, La Petite by Hayley Paige, Lazaro, Tara Keely by Lazaro, Allison Webb, Alvina Valenta, Ti Adora by Allison Webb.
SOURCE JLM Couture