Promotion by social media influencers has become an increasingly popular avenue for brands to market their products. This marketing technique is a win-win situation for both parties, as influencers can earn a significant amount of money and brands can get their products in front of large, targeted audiences. However, this method of advertising comes with certain risks, including potential liability under advertising, unfair competition and trademark laws.
A recent federal lawsuit filed in California demonstrates these risks and highlights the possibility of increased litigation against influencers. The case, Petunia Products, Inc. v. Rodan & Fields, LLC and Molly Sims, involves model and actress Molly Sims, who recommended and blogged about an eyebrow product called “Brow Defining Boost” created by Rodan & Fields. Petunia Products, the plaintiff, claimed that Sims’ conduct infringed on its trademark, BROWBOOST.
To prove a trademark infringement claim, the plaintiff must show that the defendant used the plaintiff’s trademark in commerce, and the use was likely to confuse customers about the source of the product. Sims argued that she should not be liable as a third-party who merely discussed an infringing product created and sold by someone else. However, the court disagreed with Sims and ruled against her on the trademark infringement claim.
Sims admitted in the post itself that the post was “sponsored” by Rodan & Fields. The post also contained links to the website of Rodan & Fields where purchasers could buy “Brow Defining Boost.” Consequently, the court ruled that the post could be considered a paid advertisement. Moreover, Rodan & Fields’ eyebrow products are similar in name to BROWBOOST and marketed through similar channels.
As a result, the judge held that the direct trademark infringement claim should not be dismissed at this point in the case. The court, however, dismissed the plaintiff’s claims for contributory infringement because there was no showing that Sims had actual or constructive knowledge that “Brow Defining Boost” was infringing on the plaintiff’s trademark.
The judge’s ruling in this case is likely to lead to more trademark infringement lawsuits against social media influencers. Influencers are already subject to advertising laws, and the Federal Trade Commission has provided guidance on what companies and influencers can and cannot do legally.
Celebrity endorsers are most likely to face lawsuits as they typically have the financial resources to pay damages. However, non-celebrities could also face liability, which could provide a competitive advantage for one brand to threaten another influencer working for another brand. This situation could be detrimental to the brand that hired the influencer, even where the infringement claim is unlikely to succeed.
To minimize the risks of liability, influencers should conduct due diligence and verify that the brands they work with are not engaging in trademark infringement or other methods of unfair competition. Similarly, brands should monitor their influencers to ensure they understand and comply with relevant laws.
Parties should also negotiate indemnification clauses in their contracts. Influencers with “clout” may be able to obtain contractual indemnification from the brands they endorse. However, those with less clout could get saddled with liability. Therefore, it’s best to consult an experienced attorney before signing a contract to understand your rights and responsibilities and minimize your legal and financial risks.