Nowadays, when a creative takes a corporate job, the creative is asked to execute a seemingly innocuous — but in reality terrifying — document. It goes by many names but most commonly is referred to as a “work-for-hire agreement.”
When a creative signs the typical work-for-hire, she often give up, forever and ever, all rights she has in anything creative she designs, ideates, or develops while at the company. Recently, this issue has found its way to the appellate courts in the intriguing context of ownership of social media accounts.
Courts, particularly those of the appellate variety, tend to lag well behind what is actually happening online. As a result, creatives and companies and the attorneys that represent one or both hang in the wind, with the attorneys forced to provide “lawyer-y” answers to questions about social media account ownership, answers peppered with “it depends” and references to gray areas.
But, now, in early 2024, over 13 years after Instagram went live, we finally have some guidance on how to determine disputed ownership of a social media account. While it is a mere crack in the precedential carapace, it has allowed some of that good old-fashioned light to flood in and illuminate what has been an incredibly murky issue.
In JLM Couture, Inc. v. Gutman, No. 21-2535, 2024 WL 172609 (2d Cir. Jan. 17, 2024), a creative, like the one referenced above, is fighting for ownership of two social media accounts she created in her own name while working for a fashion design company. Other things are going on in the case having to do with noncompetes and so forth, but the juicy stuff is in the discussion of the disputed accounts’ ownership.
As to specifics, fashion designer and social media influencer Hayley Paige Gutman, after parting ways with JLM Couture, Inc., allegedly locked the company out of an Instagram account and a Pinterest account that she had created. The Southern District of New York granted JLM’s request for a preliminary injunction that, among other things, gave complete ownership of the two accounts to the company.
The fundamental details for the accounts were not in dispute. Gutman created them back in 2011 and 2012, using the handle “@misshayleypaige,” for both. She created them using her “name, personal cell phone number, passwords, and a personal email account that she also used for work purposes. And it was Gutman, not JLM, who decided to open the accounts.
Despite the above, JLM claimed ownership of the accounts because Gutman’s contract required her to perform “duties and services commensurate with her position … as may be assigned to her by an officer of the Company, including … assisting with advertising programs.” JLM also argued that “the Instagram Account was utilized to showcase JLM’s products almost immediately after its creation” and its creation was “timed to coincide with the week of the Fall 2012 New York bridal market.” JLM further argued that the accounts were “critical advertising platforms” for JLM’s products and promotional events, and that Gutman and two other JLM employees used Instagram’s messaging function to respond to sales inquiries.
But, while the accounts did feature posts depicting JLM products, they also featured your standard — some, not me, might say “basic” — run-of-the-mill Insta content, like the “New York City skyline, chairs, dogs, a wine bottle, and what appears to be a beach vacation.” JLM tried to handwave away this obviously non-JLM content, but the appellate court was not convinced.
The Second Circuit found that the “district court erred by modifying its preliminary injunction to give JLM exclusive control over the Disputed Accounts.” It took issue with the district court’s sui generis approach to the legal question of social media account ownership, which included a brand-new six-factor test of the court’s own devising. A more standard property ownership analysis, the district court felt, would be “overly simplistic, and the dynamics of social media warrant a much fuller examination of how the accounts were held out to the public, the purposes for which the accounts were used, and the methods by which the accounts were managed.”
The appellate court disagreed, finding that “[d]etermining the ownership of social-media accounts is indeed a relatively novel exercise, but that novelty does not warrant a new six-factor test.” (This is a sick burn by appellate court standards.) Instead, the Second Circuit found the account should be treated in “the first instance like any other form of property.” This would include deciding who owned the accounts at the time of their creation, which the district court expressly declined to do because … internet? The Second Circuit found, with little to no sweat, that Gutman initially owned the accounts when she created them in her own name and with her personal information.
So, Gutman owned the accounts from inception and JLM could only claim current ownership if it could point to contract language, such as a work-for-hire provision. The Second Circuit iced down such a claim, though, by holding that the district court was wrong in finding that JLM was likely to prove ownership of the accounts under language in the parties’ contract that provided that all “designs, drawings, notes, patterns, sketches, prototypes, samples, improvements to existing works, and any other works conceived of or developed by [Gutman] in connection with her employment with the Company involving bridal clothing, bridal accessories and related bridal or wedding items,” were “works for hire and the exclusive property of JLM.”
While the district court found that the accounts fell into the “any other works” bucket, the appellate court pushed back, noting that “the ordinary meaning of general terms” at the end of a list must be interpreted to “embrace only objects similar in nature to those objects enumerated by the preceding specific words.” Here, when we read the terms that precede “any other works” in the clause, we learn that they all relate to Gutman’s job as a fashion designer (and not a social media maven). Because social media account creation does not share the core attributes of the fashion design process, those accounts are outside of the purview of the “any other works” language and, thus, JLM has not proven ownership via contract. The issue was then shipped back to the district court to reconsider the ownership question in a manner consistent with the above.
The Second Circuit’s parting shot on this topic provides some pellucidity, advising that the analysis of social media account ownership begins by determining the account’s original owner and ends by determining whether ownership ever transferred to another party. No six-factor test required.
Scott Alan Burroughs, Esq. practices with Doniger / Burroughs, an art law firm based in Venice, California. He represents artists and content creators of all stripes and writes and speaks regularly on copyright issues. He can be reached at scott@copyrightLA.com, and you can follow his law firm on Instagram: @veniceartlaw.