New Legal Risk for Influencers
by George H. Pike
Often, you hear a word or phrase for the first time, particularly one related to pop culture, and then two things happen: You constantly encounter that word or phrase going forward, and you realize how out of touch you were for not recognizing it earlier. For me, one recent example is the term “influencer.” An influencer is a person who has real or perceived power to influence a market for a particular product through their social media presence.
While the use of celebrities for marketing is by no means new, an influencer is specifically a product of the internet and social media. An influencer’s fame and power are based on their social media presence—more specifically, on their followers on one or more platforms. As their fame and followers grow, their influence increases and can be used to market specific products, services, or brands. The influencer may seek out the brands and offer their influence, or the brand may seek out the influencer because of their influence.
Once an influencer starts to actively influence products or brands, they are subject to a number of legal restrictions and requirements. The Federal Trade Commission (FTC) has a guide called Disclosures 101 for Social Media Influencers that outlines its requirements, which are mainly to fully disclose any “financial, employment, personal, or family relationship with a brand.” Several influencers were sued in the wake of the failed Fyre Festival for not disclosing that they had been paid by the festival’s organizers for their promotional postings. (For the record, the Hulu and Netflix documentaries about the Fyre Festival were my initial exposure to the term “influencer.”)
Recently, actress, model, and influencer Molly Sims (from her Beauty Everywhere website, as well as Twitter, YouTube, Instagram, Pinterest, and Facebook) found herself in a unique and potentially troubling new form of legal restriction. In August 2021, a California Federal District Court ruled that she must remain a personally named defendant in a trademark infringement lawsuit over a product she promoted.
The case (Petunia Products, Inc. v. Rodan & Fields, LLC, Molly Sims, et al.) involves a pair of similarly named beauty products. The trademark at issue is BROW BOOST, owned by Petunia Products, Inc. and part of a line of mascara, applicators, and related products sold under the brand “Billion Dollar Brows.” The competing product is called Brow Defining Boost, sold by Rodan + Fields (R+F).
In its trademark infringement claim, Petunia Products alleges that the R+F product “illegally utilizes the [Petunia] Trademark” on R+F’s packaging and marketing. Petunia also claims that R+F deliberately bid on Google AdWords search terms for “Brow Boost,” directing searchers to the R+F product, and promoted the R+F product with the hashtag #BROWBOOST on social media.
SPONSORED BLOG POST
Sims wrote a blog post on her website in which she promoted the R+F product. She favorably reviewed the product, provided images of it, and included a link to the R+F website for those who wanted to “learn more about how to purchase [R+F’s] Brow Defining Boost.” She also thanked R+F for “sponsoring her post.” It further appeared that R+F provided Sims with samples of Brow Defining Boost prior to the product’s official release.
Sims’ post seems to have followed the FTC guidelines by her indication that R+F was “sponsoring” the post. But that is not the source of her legal troubles. Petunia Products was in the process of suing R+F for trademark infringement for R+F’s alleged misuse of Petunia Products’ BROW BOOST trademark. Because of Sims’ post, she was included as a defendant in that suit. She filed a motion to be dismissed from Petunia Products’ infringement claim, but the court denied her motion and ruled that she remain a defendant.
Trademark infringement occurs when a new product or brand uses a particular trademark that already belongs to an existing product and in a way that is “likely to confuse customers as to the source of the product,” according to the court case. Delta Airlines and Delta Faucets can coexist because there is very little likelihood of consumer confusion between the respective companies’ products. However, the likelihood of confusion between BROW BOOST and Brow Defining Boost, since both are beauty products, is much higher.
UMBRELLA OF RESPONSIBILITY
More importantly, however, one can be guilty of trademark infringement when the mark is used “in connection with the sale, distribution, or advertising of goods and services” (emphasis added). Sims’ blog post was found to be advertising the product, which brought her under the umbrella of responsibility for the infringement.
Sims attempted to assert that her post was “legitimate commentary” about the product, which is protected speech under the First Amendment. She argued that a finding of potential liability could “stifle” commentary going forward. The court, however, rejected that argument, saying that noncommercial commentary does not involve links to product websites, sponsorship, or the other indicators of paid advertising.
LACK OF KNOWLEDGE
The court rejected two other claims against Sims, one for contributing to the alleged infringement and another for false advertising, in part because it appeared that Sims was not aware of Petunia Products’ claim of trademark infringement at the time of her post. While R+F had received a letter from Petunia Products to cease and desist using the BROW BOOST mark prior to Sims’ post, there was no indication that Sims knew about it. However, it is important to note that Sims’ knowledge or lack of knowledge that R+F’s product was infringing was not a factor in her liability for the advertising.
Advertising law is an area that can get advertisers and those involved in advertising in legal hot water more readily than expected. Influencers and other social media and traditional media “celebrities” are not immune to potential legal liability, including trademark infringement, false advertising, or FTC violations. Self-education about the products that one wishes to “influence,” and self-protection in the form of contracts with liability limitations or indemnity, are the influencer’s best tools for staying both influential and legal.