Some companies will do anything to get their hands on valuable trade secrets from their competitors. According to Olaplex, a startup based in California, L’Oréal allegedly tried everything from poaching employees to allegedly offering to acquire the company in order to gain access to allegedly sensitive, privileged and secret information. What was at stake was a alleged secret formula designed to protect hair from damage during the dyeing process.
Starting around the middle of 2015, L’Oréal allegedly tried to hire Olaplex employees it thought were responsible for creating the revolutionary product. When that didn’t work, L’Oréal allegedly approached Olaplex about possibly acquiring the company.
As a direct result of talks between the two companies to negotiate the terms under which the French-based company might acquire the U.S.-based company, L’Oréal was allegedly given access to confidential and proprietary information that had not yet been made available to the public, including an unpublished application for a patent on a product designed to allow customers to dye their hair without causing damage.
It’s not hard to see the value in a product that allows people to keep their hair healthy in any color they want. It provides a new benefit to existing customers, while simultaneously enticing new customers who may want to dye their hair, but have reservations about some of the harsh chemicals used in commercial hair dyes and what they might do to their hair.
Once L’Oréal had allegedly gained access to this privileged and highly valuable information, the French cosmetic company allegedly put a stop to all talk of acquiring Olaplex. Shortly after that, L’Oréal released three new products: Matrix Bond Ultim8, L’Oréal Professional Smartbond, and Redken pH-Bonder, all of which were allegedly created using technology supposedly stolen from Olaplex.
Despite the fact the new technology had not yet been patented, Olaplex believes they have a clear case that L’Oréal used deceptive business practices in order to gain and take advantage of the California company’s sensitive information. Olaplex has since filed a lawsuit against L’Oréal for patent infringement and named the French company’s three new products as specific instances of the alleged infringement.
L’Oréal’s U.S. division has released a statement, saying that the claims are baseless and it has denied the validity of the patent held by Olaplex on the revolutionary product.
Even if the patent is valid and legally binding, Olaplex is still taking a huge risk in taking L’Oréal to court. The international cosmetic company has brand recognition on its side, as well as the resources to fight a lengthy and expensive legal battle. When small startups call on the courts to enforce their patents against large corporations, they often find it’s not as simple as whether the patent is enforceable. It’s much like David taking on Goliath, but that doesn’t mean David doesn’t have a chance.
On the other hand, L’Oréal might be in the right in this particular case and able to prove it to a court judge. The third option would be for the case to settle outside of court, which is also likely, given the amount of time and money it would save both parties.Super Lawyers named Illinois business trial attorneys Peter Lubin and Vincent DiTommaso Super Lawyers in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso Lubin Austermuehle’s Illinois business trial lawyers have over a quarter of century of experience in litigating complex class action, copyright, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes including lawsuits between businesses or between shareholders and owners of the same business. Our Bollingbrook and Arlington Heights business dispute lawyers handle emergency business law suits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling (630) 333-0000 or our toll free number (877) 990-4990. You can also contact us online here.