L’Oreal Compensates Hundreds of Millions of USD for Stealing Trade Secrets

Olaplex, an American salon haircare brand, accused the French cosmetics giant L’Oreal Group of stealing trade secrets during the due diligence investigation in the merger and acquisition several years ago.A court in Delaware ruled that L’Oreal lost the lawsuit and would pay Olaplex more than USD 112 million in compensation. L’Oreal Group said it would continue to appeal.

It is learned that Olaplex is a startup company specializing in the research and development of hair repair products for coloring in the United States. Its star product, Olaplex Bond Multiplier No.1, can effectively repair hair damaged due to bleaching and coloring. It’s called the “liquid gold” and applied in hundreds of thousands of salons in more than 80 countries in the world. It is the third fastest growing brand in the overall hair care market.

Olaplex pointed out that L’Oreal Group intended to acquire Olaplex in 2015 but failed. During the acquisition negotiation, L’Oreal stole the patented formula of Bond Multiplier, and then launched a competing product Smartbond similar to the Olaplex Bond Multiplier No.1 and seized the market of Olaplex.

In 2018, Olaplex won the case in the United Kingdom. L’Oreal Group said it would continue to appeal. A year later, L’Oreal Group lost again. According to the reports, the Delaware jury found that L’Oreal Group constituted four infringements against Olaplex, including two patent infringements, theft of trade secrets and breach of confidentiality provisions. In addition to the compensation of economic losses for Olaplex during the lawsuit, L’Oreal Group will pay up to more than USD 112 million plus litigation fees. After the verdict was announced, a spokesman for L’Oreal Group said that the company was “disappointed” with the trial results and planned to appeal.

September 10, 2019

Source: Beijing Business Today

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