Wedding dress designer Hayley Paige Gutman is at the center of a new lawsuit after leaving her post at her JLM Couture-owned brand. In a complaint filed on December 15, JLM Couture (“JLM”), the parent company to an array of bridal brands, including Hayley Paige and its several sub-brands, is accusing the designer of federal and common law trademark dilution and unfair competition, breach of contract, conversion, and breach of fiduciary duty, among other claims, and claiming exclusive rights in the “Hayley Paige” name and variations, thereof, on the basis of the employment agreement the parties entered into when Gutman was “relatively new to the fashion industry” in 2011.
According to its complaint, JLM – which generated $220 million in retail sales between 2017 and 2020 – claims that it enlisted Gutman to come onboard as a designer for its bridal collections in July 2011. As a result, the designer entered into an employment agreement with JLM, which is still currently in effect, as JLM exercised an option to extend the term of the agreement by “at least 3 additional years” in 2019.
The parties’ partnership has seemingly flourished since 2011, with JLM launching – and Gutman designing, serving as the face of, and helping to advertise – a number of successful Hayley Paige-specific brands and collections, and filing applications for (and receiving) 37 domestic and international trademark registrations for the various iterations of the “Hayley Paige” name for its brands – from “Hayley Paige” for use on bridal apparel and jewelry to “Just Got Paiged,” among others.
In addition to launching the Hayley Paige brands, in connection with which JLM “began using [Gutman’s name], as provided in the employment agreement, to sell and advertise clothing designed by Gutman,” including by way of the then-newly-created “Hayley Paige” brands, JLM claims that it launched social media pages for the Hayley Paige brand, such as @misshayleypaige on Instagram, an account that Gutman assisted in maintaining in connection with “the scope of her employment.”
More than that, JLM claims that it obtained “lucrative cross-marketing agreements and tie-ins to capitalize on Gutman’s growing recognition,” including on social media, such as collaborations with diamond brand Hearts of Fire, and a recurring role for the designer and the Hayley Paige brand on TLC’s show “Say Yes to the Dress.”
Social Media Squabbles
“Despite the success of the [various Hayley Paige] brands,” JLM alleges that things started to go downhill in November 2019 when Gutman “began to take steps to not only assert control over JLM property,” which has “resulted in damage to JLM’s business and intellectual property rights.” Among the property at stake is the Hayley Paige social media accounts – including the @misshayleypaige Instagram account – which JLM argues that it has owned from the time that the accounts were created.
At the same time, JLM alleges that the parties’ problems were compounded when Gutman “created a TikTok account under the misshayleypaige name.” This was problematic, per JLM, not only because Gutman allegedly “posted videos that did not properly represent the [Hayley Paige] brands,” but because the “misshayleypaige” handle falls within the scope of the rights that Gutman granted JLM, i.e., “the exclusive world-wide right and license to use” her name, in accordance with her employment agreement.
JLM claims that in addition to the customary agreement that dictates that the designs she creates during her employment – and the rights in such designs – would become the property of JLM unless otherwise specified, Gutman 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.”
The exception? If “JLM exercised its right to file for and obtain a federal trademark registrations for any such name,” in which case a separate provision in Gutman’s employment agreement comes into play. That provision states that Gutman 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 parties’ relationship further broke down in June 2020 when JLM alleges that in the midst of its offer “to negotiate to further amend Gutman’s employment agreement to increase the term thereof, and to provide Gutman with additional financial compensation,” Gutman allegedly informed JLM CEO Joseph Murphy that “it was her position that the [@misshayleypaige] Instagram account was her personal account,” which JLM says is at odds with their existing agreement.
Thereafter, JLM claims that Gutman began posting “personal images in addition to bridal images” to the account, as well as uploading posts “promoting the goods of third parties, such as olive oil, beer, and nutritional supplements, none of which were approved by JLM, and none of which relate to the bridal industry.” This was followed by Gutman “not only hijack[ing] the [@misshayleypaige] account, but [taking] steps to convert it from a JLM company account” – and its 1.1 million followers – “to her own business platform, as if she were an influencer.”
Who Owns a Name?
With the foregoing in mind and given its alleged ownership of the “Hayley Paige” name in connection with the manufacturing, marketing, and sale of bridal goods, JLM sets forth claims of federal trademark dilution, pointing to Gutman’s “confusingly similar use” of the various “Hayley Paige” trademarks and the @misshayleypaige 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.”
Beyond that, JLM claims that Gutman is engaging in false designation of origin and unfair competition by using its trademarks even if those marks include her name, as such use is “likely to cause confusion in the marketplace as to the source, origin, or sponsorship of the goods” being offered up and/or promoted by Gutman. (Interestingly, while JLM asserts a number of Lanham Act claims, it does not make any trademark infringement claims).
Still yet, JLM argues that Gutman is on the hook for a whole host of other offenses, including breach of contract as a result of her use of the “Hayley Paige” trademarks, as well as her unwillingness to provide JLM with “access credentials” to the social media accounts, which she “hijacked” for her own “personal use, and to promote non-JLM authorized goods and services.”
On the heels of a court order last week, in which Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York issued a temporary restraining order in JLM’s favor, Gutman told the nearly 100,000 followers of her @allthatglittersonthegram account in a video published on Monday, “I am mortified and devastated but I wanted to be the first to personally tell you that I am no longer posting or engaging on [the @misshayleypaige] account until this matter is resolved in court,” noting that she has resigned from her position at JLM following “a year-and-a-half-long legal battle to negotiate a new contract with JLM Couture, one that has resulted in them suing me and convincing a court to grant them temporary control and access over my Instagram account, as well as my TikTok and Pinterest.”
In the same video, Gutman states that she did not have a lawyer when she signed the original employment agreement, and says 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.”
(JLM has since released a statement asserting that “it is documented that Hayley had a lawyer help her review her employment contracts. She consulted with her lawyer prior to signing the contract, [and] there were multiple rounds of negotiations between Hayley and JLM until both parties settled on an agreement each felt was fair and mutually beneficial).
Gutman further says in the video that “it is with a heavy heart that I have resigned from my role as head designer of my labels with JLM Couture,” stating that “going forward, I will no longer be associated with any of their products, including the designs and dresses which bear my name.”
As for whether the court will be sympathetic to Gutman’s distress surrounding her inability to use her name in certain commercial capacities, including in connection with the design and sale of bridal apparel, it seems unlikely. Many courts – including the court that sided with Chanel in its case against a salon owner named Chanel Jones – have consistently made clear that individuals do not have unfettered right to use their personal names for commercial purposes, especially in cases where the individual signed away those rights as part of an acquisition, which is what the late Kate Spade did, for instance, when she sold her company to Liz Claiborne in 2007 for $125 million and what makeup mogul Bobbi Brown did when her eponymous level was acquired by Estée Lauder Companies in 1995, prompting both women to later launch companies under new names.
These instances, and the budding Hayley Paige case, clearly demonstrate some of the complications that come to light when designers launch – and then, ultimately sell or otherwise leave – companies that bear their own names, and judging by the responses of Gutman’s fans on social media, this situation also sheds light on the potential public relations pitfalls that come with such legal battles.
UPDATED (December 23, 2020): This article was been updated to include a statement from JLM in response to Gutman’s assertion that she was unrepresented by legal counsel in connection with the negotiation/signing of her employment agreements.
*The case is JLM Couture, Inc. v. Gutman, 1:20-cv-10575 (SDNY).
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