Big failure for L'Oreal cosmetics
Aug 26, 2019

Big failure for L'Oreal cosmetics

An active startup in beauty and hair enhancement products has won a legal dispute with L'Oreal, which is sentenced to pay about $ 91.3 million to Olaplax for damages caused by patent infringement and abuse of trade secrets under the confidentiality agreement between the two companies.

The story of the lawsuit began when, in May 2015, the executives of two cosmetics companies held a business meeting in a California restaurant. The French L'Oreal company representative and a senior executive at Olaplax, who had just celebrated its one-year establishment, were discussing a possible deal for buying the newly born startup by L'Oreal. During these conversations, some very confidential Olaplax information, including an unpublished patent application related to the company's proprietary hair enhancement and protection system, was shared by Dean Cristal, its founder and chief executive officer. This information, which was fully disclosed in good faith in the form of a formal confidentiality agreement to the other party, turned the two companies' negotiations into a large and complex legal case.

The Olaplax transfer talks were halted the same year because of the $ 1 billion price tag described by L'oreal as being fake and mockery. Less than a year later, however, L'Oreal introduced its hair bonding system, which Olaplax claimed was a clear copy of their proprietary technology, claimed as having violated not only the information confidentiality agreement but also infringing two patents owned by Olaplax. In January 2017, Olaplax filed a lawsuit against L'Oreal, alleging abuse of trade secrets, patent infringement and infringement of the information confidentiality agreement, and launched one of the largest legal battles focused on theft and infringement of intellectual property rights on an international scale.

The complaint was of course not unprecedented, and earlier in 2016, Olaplax had filed a similar lawsuit against L'Oreal in the United Kingdom. After numerous ups and downs, despite claims by L'oreal's lawyers regarding the trial supply of primitive prototypes of the products in August 2014 prior to the start of negotiations with Olaplax, the US federal court found that both patent infringement and infringement agreement had indeed occurred. As a result, Olaplax had to receive $ 91.3 million from L'Oreal: $ 22 million for breach of contract, $ 22 million for trade secrets abuse, and approximately $ 47 million for patent infringement. It appears that the ruling, issued only for the lawsuits of the two companies in the US, could be the start of a series of L'Oreal legal breakdowns in other countries, prompting the company to appeal the lawsuit as mentioned by the company's spokesperson.

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