INFRINGING INFLUENCERS: HOW TO FAIRLY PROTECT BRANDS' TRADEMARKS ON SOCIAL MEDIA.

• Author: Kotecki, Peter

INTRODUCTION

Over the past two decades, social media has increasingly become a fundamental component of Americans' lives, with more than seven out of ten adults using at least one social media site in 2021. (1) Within this digital landscape, certain people have cultivated thousands, or even millions, of followers to become "influencers" who build their careers by promoting brands' products on social media. (2) By some estimates, more than twenty-five million Americans between the ages of sixteen and thirty-four have enough social media followers to be labeled influencers. (3) Of these influencers, about 1.5 million have earned money from agreements with brands. (4)

To cynics, influencer marketing allows individuals who are "famous for nothing" to make a lot of money by publishing some words and photos on social media. (5) To others, influencer marketing is a path to putting food on the table. (6) Regardless of one's views, influencers' importance to brands' strategies is undeniable: the influencer marketing industry is expected to reach about $28 billion by 2026, (7) up from at least $15 billion in 2022. (8) The U.S. government has taken steps to regulate influencers; for example, the Federal Trade Commission requires influencers to "disclose to followers when they are paid to post, receive free goods or services in exchange for posting, or gain some other material benefit." (9) Nevertheless, the extent of influencers' exposure to legal consequences is murky, particularly in the area of trademark infringement.

The Lanham Act defines a trademark as "any word, name, symbol, or device, or any combination thereof," used to identify a good's source. (10) Trademark owners may sue under the Lanham Act to prevent others from engaging in conduct that "would confuse consumers as to the [good's] origin, sponsorship, or approval." (11) At its core, trademark law aims to "reduce the customer's costs of ... making purchasing decisions" by ensuring that goods with the same mark come from a common source. (12) Trademark law also motivates producers to make quality goods, and it increases consumers' understanding of good quality, thus preventing producers of inferior goods from benefiting off consumers' confusion. (13)

Trademark owners have generally focused their infringement claims on competitors, while influencers have typically avoided liability for posting content on behalf of brands that infringed others' marks. (14) In mid-2021, however, a federal judge denied influencer Molly Sims's motion to dismiss a direct infringement claim against her, finding that she may be liable. (15) Sims, who rose to fame as a model, (16) runs a beauty blog. (17) She has more than 852,000 followers on Instagram, (18) and she has amassed thousands of fans on Facebook, Twitter, and YouTube. (19)

Sims partners with various brands to promote their products online. (20) One of these brands, Rodan & Fields, specializes in skincare items. (21) In April 2021, Petunia Products, a cosmetics company (22) that owns the registered mark BROW BOOST, sued Rodan & Fields and Sims for trademark infringement, among other claims. (23) Petunia named Sims as a defendant because she published a blog post that referenced Rodan & Fields's Brow Defining Boost product, encouraged readers to buy the item, and included a link to do so. (24)

Sims, who filed a motion to dismiss, (25) likely expected to avoid liability, but the court allowed Petunia to pursue its direct infringement claim against her. (26) The influencer answered that her blog posts were a fair use of Petunia's mark and that Petunia was estopped from pursuing the claim due to acquiescence. (27) Before the case reached trial, however, the district court dismissed Petunia's suit, (28) leaving significant uncertainty surrounding trademark liability for influencers like Sims.

Part I of this Note describes existing options for holding social media influencers accountable, along with ways influencers have avoided liability. Part II assesses the viability of applying doctrines like the likelihood of confusion to influencers' social media posts. Part III discusses how influencers can protect themselves through contracts, business relationships, and other strategies. Part IV argues that extending liability for direct infringement to influencers would be detrimental, as micro-influencers would be disproportionately harmed. Finally, Part V calls for the enactment of legislation to formalize notice and takedown procedures in trademark law, as such procedures would decrease the number of court disputes and lessen the harm to micro-influencers.

1. HOLDING INFLUENCERS ACCOUNTABLE

   1. Brands' Efforts to Hold Infringers Accountable

      Although trademark infringement suits against influencers are rare, companies have relied on generally applicable strategies to curb trademark abuses, thereby affecting influencers as well. Amazon, for example, has taken steps to crack down on counterfeit products sold through its third-party marketplace. (29) In 2020, it launched the Counterfeit Crimes Unit, in which former federal prosecutors and others seek to identify "bad actors" who sell knockoff products. (30)

      In one case, Amazon sued influencers Kelly Fitzpatrick and Sabrina Kelly-Krejci, (31) who used Instagram and other platforms to promote knockoff items that were labeled as Dior and Gucci and sold on Amazon. (32) In a settlement, the influencers agreed to stop promoting items on Amazon, (33) and the company donated the settlement payments to charities. (34) Perhaps Amazon, capable of earning more than $137 billion in quarterly revenue, (35) was less concerned about financial harm than preserving the integrity of its marketplace. (32 33 34 35 36)

      Beyond Amazon's Counterfeit Crimes Unit, many technology companies fervently protect their trademarks. Apple, for instance, has not shied away from objecting to the marks of small businesses and other entities. (37) In one dispute, Apple opposed a trademark registration for the startup Prepear, which offers recipes, meal preparation resources, and other services. (38) The app's founders, a Utah-based couple, (39) had chosen a pear as their logo. (40) They called Apple out for "bullying" (41) and criticized the "onerous" costs of defending one's trademark. (42) The dispute settled after Prepear agreed to modify the logo's shape. (43) In another case, Apple objected when a political party in Norway sought to register a red apple as its logo. (44) Apple has also opposed the trademarks of a school district, a food blog, and the makers of a card game. (45) This willingness to litigate suggests that Apple would pursue trademark infringement claims against influencers as well.

   2. Avoiding Liability

      When it came to influencers Kylie and Kendall Jenner, however, Apple took a different approach. The Jenner sisters published Instagram posts in which they wore knockoff Apple AirPods and included links for followers to purchase these products. (46) Yet Apple did not seem interested in pursuing legal action against the Jenners, possibly because millions of followers were watching, (47) in contrast to Prepear, whose online presence is significantly smaller. (48)

      The Jenner sisters' reach on social media is massive. (49) Kylie Jenner, the youngest of the Kardashian-Jenner siblings, launched the first product of her makeup company, Kylie Cosmetics, in November 2015. (50) Four years later, Forbes named Kylie Jenner, twenty-one at the time, the youngest self-made billionaire, largely due to the success of her makeup line. (51) Soon after, she sold most of Kylie Cosmetics to the beauty company Coty in a $1.2 billion deal. (52) Kendall Jenner, meanwhile, works as a model and launched a tequila brand, among other endeavors. (53) As an influencer, she was paid $275,000 to promote the fraudulent Fyre Festival, (54) and she earns as much as $1.5 million per photoshoot. (55) Moreover, both sisters make millions by promoting brands' products on Instagram--Kendall earns more than $1 million per sponsored post, while Kylie earns nearly $1.5 million for the same. (56)

      Given allegations that Apple relies on "bullying tactics" to protect its trademarks, (57) the motivation behind the tech giant's handling of the Jenners' Instagram posts is unclear. But Apple's decision indicates that brands may not always want to take advantage of all available legal avenues. With the Jenners, Apple was perhaps more interested in maintaining a professional relationship than litigating a particular dispute. (58) The Jenner sisters did not personally create any infringing marks, and Kylie Jenner has collaborated with Apple over the years: In 2017, for example, she became the face of $600 Beats headphones, which Apple launched with Balmain, a French design house. (59) The following year, Apple announced that Kylie Jenner and her friend would host a monthly radio show, "Pizza Boys," on Apple Music's Beats 1 station, (60) now known as Apple Music 1. (61)

      Outside of the United States, several influencers also seem to have avoided liability despite being publicly called out for knowingly promoting knockoff luxury goods. (62) Whereas influencers like Sims may have been unaware that their online posts featured infringing marks, (63) others knew and even embraced it. (64) For example, the British influencer Tyne-Lexy Clarson--with roughly 401,000 followers on Instagram (65)--told the BBC she knew the jumper she promoted was not made by Gucci. (66) To Clarson, however, the promotion of counterfeit apparel did not seem problematic: "I never thought of it really," she said. "I just think it's a nice jumper." (67) Clarson said consumers who encountered these knockoff Gucci items would realize they were not purchasing the real thing because the knockoff items were much cheaper than Gucci clothes, and Gucci did not make apparel that looked like the jumper. (68)

      Like the Jenner sisters, Clarson seems to have avoided litigation. Although Gucci...