Wedding dress designer barred from using own name
Designer Hayley Paige Gutman can’t use her own name for the marketing of her bridal gowns after the US Court of Appeals for the Second Circuit upheld an earlier ruling favouring JLM Couture.
The Second Circuit delivered its decision on January 25, but did uphold Gutman’s argument that the US District Court for the Southern District of New York erred when it ordered the surrender of her social media accounts.
The dispute arose after Gutman announced that she was resigning from the wedding gown company JLM, which in turn claimed the rights to the “Hayley Paige” trade name and ownership of three of the “Miss Hayley Paige” social media accounts.
As their differences escalated, Gutman advertised an independent appearance at a bridal dress fair, used the “Hayley Paige” name to promote non-JLM brands, and locked JLM employees out of the “@misshayleypaige” Instagram account.
Wedding bust-up
JLM then sued Gutman, claiming breach of their employment agreement, trademark dilution, and demanding the transfer of Gutman’s Instagram, TikTok, and Pinterest accounts.
The wedding dress company successfully moved for a temporary restraining order and then a preliminary injunction against Gutman.
Gutman appealed, challenging the provisions ordering her not to compete with JLM, and preventing her from using the name “Hayley Paige Gutman” and its derivatives in trade or commerce.
She also contested the district court’s determination that JLM did not itself breach the contract, forfeiting its right to seek injunctive relief, as well as the decision to transfer the disputed social media accounts to JLM.
But the Second Circuit concluded that the district court did not abuse its discretion when ordering the injunction, which it held properly “flowed from JLM's likely meritorious claims against plaintiff for breach of contract”.
No persuasive reasoning
The court also held that the district court did not err when rejecting Gutman’s contention that JLM breached the employment contract by refusing to pay her after she stopped working.
The court stated: “Gutman agreed to sign away various rights to JLM in exchange for her salary, a stream of royalty payments, and JLM’s investment of time and capital in the Hayley Paige brand. She offers no persuasive reason why the contract no longer binds her, and the district court did not err in enforcing its clear provisions.”
However, it went on to say that the lower court exceeded its discretion by transferring exclusive control over the social media accounts to JLM while declining to assess whether the dressmaker’s ownership claim would be successful.
Accordingly, the court affirmed in part, vacated in part, and remanded the case for further proceedings.
The case is JLM Couture v Gutman, 2nd US Circuit Court of Appeals, No. 21-870.
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