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Being a social media influencer sounds like the path to easy riches. Build a large following, often on Instagram, and then advertisers flock to you with free products and money.
A recent federal court case in California sounded a warning: Influencers may be liable for trademark infringement arising from the names of the products and services they endorse.
It helps to understand how influencing works. It’s an alien world to an old guy like me. It’s mainly advertising by women targeting other women. Both the influencer and the audience are usually under 35 and often in their teens. Usually promoted are products for beauty, fashion, health, cooking, and home decor.
Do a search for “Charli D’Amelio.” She is a 17-year-old influencer who rose to fame when barely 15. She became popular for her dance videos on TikTok. She now has over 125 million followers on TikTok, 45 million on Instagram, and a thriving influencer business. CelebrityNetWorth.com claims her minimum fee is $100,000 for a single sponsored post, her net worth over $12 million, and she makes several million dollars a year.
The influencer who recently found herself in federal court over a trademark issue is Molly Sims. She is a beauty influencer with over 670 thousand followers on Instagram (small by influencer standards). She’s famous for modeling a $30 million bikini made of diamonds.
She got sued over promoting a product from Rodan & Fields named “Brow Defining Boost,” which is an “eyebrow primer and conditioner” (not joking). A competing makeup company, Petunia Products, owns a federal trademark registration for “Brow Boost” for eyebrow conditioners. It sued Rodan & Fields – and Sims – for trademark infringement.
Sims had posted a sponsored gushing review of Brow Defining Boost on her blog. She linked to the merchant page where visitors can “learn more about how to purchase” the product. She posted an image of the product and its price ($112 a bottle!) under the heading “Shop the Product.”
In trying to escape the lawsuit, Sims argued her blog post was just her opinion and should be protected by the First Amendment. The federal court refused to dismiss her from the case. It held her post was paid advertising. Advertising a trademark-infringing product is itself infringement.
The case isn’t over. We don’t know whether Sims will be held liable. Most likely, the case will settle. Perhaps Rodan & Fields will cover Sims so as not to upset her.
What does this mean for influencers, even aspiring and small ones?
Ideally, the company whose product or service is being advertised would cover the problem. The product maker should conduct trademark-clearance research before launching its brand. Regardless, in a just world, that company would defend the influencer from any trademark infringement claim and indemnify her against any awarded damages.
In the real world, the opposite is usually the case, at least on paper. Frequently ad-placement agencies hire influencers. These agencies use form contracts with influencers that are one-sided in favor of the agency and product maker. They usually make the influencer responsible for any liability from the influencer’s activity and require the influencer to indemnify and defend the agency and maker from any lawsuits arising from the influencer’s actions.
Perhaps in practice, the product maker would take care of an infringement claim to protect its image and not anger the influencer.
An influencer might be legally safer if she just gives a favorable opinion but doesn’t expressly advocate purchasing the product or provide a link to do so.
I have seen no case law on this approach, but, logically, merely opining favorably on a product without advocating for or facilitating a purchase might be construed as just talk and not advertising. No guarantees here. But advertisers usually want more, such as an express call to buy the product and a link to where you can do so.
Influencers also should review the Federal Trade Commission’s guidelines on deceptive trade practices and influencer transparency. Search for “FTC social media influencer guidelines.” You will find them easily. The key takeaways are to be candid with your audience about receiving free product or payment, and make your disclosure conspicuous and easily understood.
The FTC is unlikely to go after an influencer, but it could. It focuses enforcement on advertisers and ad agencies. Still, agency contracts with influencers usually make influencers responsible for FTC rules compliance and require the influencer to indemnify and defend the advertiser and agency against any violations. A savvy influencer will know and follow the FTC rules so as to avoid legal hassles and expense.
Written on November 17, 2021
by John B. Farmer
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