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L’Oreal Ordered To Pay Startup For Swiping Trade Secrets

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The beauty world got a bit ugly, as a Delaware jury told L'Oreal they have to make up with California startup Olaplex, to the tune of $91.3 million. Beauty Complex Yesterday, a federal jury in Wilmington, Delaware, told L’Oreal to pay Olaplex “for stealing its trade secrets, breaching a contract and infringing two patents” in regards to a three-step system that protects hair during bleaching treatments. L’Oreal plans to appeal the verdict. Garage Days Olaplex is an online beauty store founded in a garage by two chemists that employs less than 30 people. One of its most popular products is an acid that strengthen and reconnect hair’s protein bonds during the bleaching process, which can sometimes be rough on the hair. Olaplex alleged that L’Oreal, which had previously tried to hire the two scientists who developed the process away after noting the product’s online buzz, stole the secrets of this process in 2015, when the company was in talks to buy the startup, thus violating a legally-binding confidentially agreement. L’Oreal denied this, claiming it developed a similar product independently. (Accusations from start-ups that big companies steal their ideas are hardly new.) Patent Pending In June, a U.S. District judge Joseph Bataillon ruled that L’Oreal had infringed on Olaplex’s patents, noting the company had done “actual monetary harm.” Today, L’Oreal’s stock dropped slightly. -Michael Tedder Photo: Benoit Tessier / REUTERS