A US district court jury in Delaware has ordered French cosmetics giant L’Oréal to pay $91 million for stealing the formula for Olaplex’s Bond Multiplier, a favorite of celebrities like Khloé Kardashian and Taylor Swift because it protects hair from damage during bleaching and color treatments.
Following a trial held earlier this month, the jury found L’Oréal guilty of trade-secret theft, patent infringement, and breach of contract. It ordered L’Oréal to pay Olaplex—a start-up based on the research of two University of California, Santa Barbara (UCSB) chemists—more than $22 million for each of the first two offenses, and close to $47 million for the third offense.
In a press statement, L’Oréal vowed to appeal the decision and said it expects “to prevail on all counts.” The cosmetic firm added that it is contesting Olaplex’s patents before the United States Patent & Trademark Office and the federal appeals court and expects “future rulings to invalidate” the Olaplex patents. L’Oréal also asserted that its own hair treatment technology, in products such as Redken pH-Bonder and Matrix Bond Ultim8, “was developed independently by L’Oréal research teams.”
UCSB chemistry professor Craig Hawker, who developed the technology for Olaplex along with former student Eric Pressly, tells C&EN that the case is one of a big firm bullying a start-up. “L’Oréal picked on the wrong people,” he says. Since Olaplex’s product was successful early on, the small firm, unlike many start-ups that struggle to gain traction, had the means to take the fight with L’Oréal to court, he explains.
The two scientists developed the Olaplex hair repair technology in Pressly's garage. The first ingredient they discovered was bis-aminopropyl diglycol dimaleate. According to Olaplex, it keeps bleaching and coloring agents from breaking disulfide bonds in the hair.
But the lawsuit focused on patents the two scientists developed covering alternative hair protectors including maleic acid. Hawker says they patented alternatives as a way to guard their original formulation from competitors who might come up with workarounds.
Hawker credits the 11 years he spent as a researcher at IBM Research - Almaden for the business smarts to protect the patent he and Pressly first developed. “It’s good to be an academic who has experience with corporate culture,” he says.
But Hawker also says “I would rather have collaborated with L'Oréal as we started to do rather than waste all this time” in legal wrangling. L’Oréal negotiated to buy Olaplex in 2015, according to Olaplex’s 2016 complaint against L’Oréal. As talks advanced, L’Oréal signed a confidentiality agreement giving it access to Olaplex’s proprietary information.
But negotiations fell apart. Soon thereafter, L’Oréal created knockoffs hoping to recreate Olaplex’s success, says the complaint. Hawker says that L’Oréal’s behavior “is not acceptable for a company touting respect for research and innovation.”
In its statement, L’Oréal countered that its “business is guided by an unwavering code of ethics, which respects and invites fair competition, as we believe it drives everyone in the industry to develop better products and services to give our customers the choice they desire and deserve.”
L’Oréal’s statement also points out that the jury verdict only applies to the US market. However Olaplex has already tangoed with L’Oréal in another market. In June 2018, Olaplex won a ruling from a British court that determined L’Oréal had violated an Olaplex hair treatment patent. At the time, L’Oréal appealed that ruling and Olaplex sought an injunction barring sales of L’Oréal’s competing product.