As predicted, the trade secrets battle between Olaplex, Inc. and L’Oreal continues – and L’Oreal has scored a fresh victory.  On May 6, 2021, the Federal Circuit Court of Appeals overturned a $66 million judgment against L’Oreal and ordered a new trial – but only on one of Olaplex’s patent claims.  The panel stated that Olaplex had entirely failed to show that its information was eligible for trade-secret protection, and that no reasonable jury could find otherwise.

At trial on its trade secret claims, Olaplex claimed that L’Oreal USA and its affiliates (including Matrix and Redken) had misappropriated trade secrets related to a less damaging method of bleaching hair contained in an unpublished patent application, financial information provided to L’Oreal subject to a non-disclosure agreement, and data about product “testing and know how” and “trials and errors.” The jury found that L’Oreal had misappropriated these trade secrets for more than $22 million in damages.

However, on appeal, the panel concluded that Olaplex had failed to provide specific proof that L’Oreal had “misappropriated anything secret.” For example, the hair-coloring method in question – using maleic acid during bleaching – wasn’t secret because the information was already publicly available in earlier patents and published patent applications.  Further, the court faulted Olaplex for only categorizing the purported trade secrets “at a high level of generality,” which, it said, was not enough to show misappropriation.

The panel reversed the trial court’s denial of L’Oreal’s request for judgment as a matter of law on the trade secret claims, thus granting a verdict in L’Oreal’s favor on Olaplex’s trade secret claims in their entirety, but remanded part of Olaplex’s patent infringement claims for a new trial in Delaware federal court.  We anticipate, however, that the Federal Circuit’s decision will not be the end of the appeal saga regarding Olaplex’s trade secrets.

The case is Olaplex Inc. v. L’Oreal USA Inc., U.S. Court of Appeals for the Federal Circuit, No. 20-1382.

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Photo of Jillian Ambrose Jillian Ambrose

Jillian Ambrose is a Labor & Employment Group associate in Crowell & Moring’s Washington, D.C. office. Prior to joining the firm, Jillian served as a law clerk to Judge Anthony Epstein and then to Judge Steven M. Wellner, both of the D.C. Superior…

Jillian Ambrose is a Labor & Employment Group associate in Crowell & Moring’s Washington, D.C. office. Prior to joining the firm, Jillian served as a law clerk to Judge Anthony Epstein and then to Judge Steven M. Wellner, both of the D.C. Superior Court. Before law school, Jillian was an analyst in the human capital practice of an international consulting firm, where she provided management consulting services to a portfolio of federal agency clients.

Jillian’s practice focuses on litigation of individual and class actions arising in all areas of labor and employment law. She provides counseling to clients on a variety of employment issues, including non-competition/non-solicitation agreements and contract disputes. She also assists clients with affirmative action compliance, preparing affirmative action plans, analyzing compensation practices, and providing counseling in connection with Office of Federal Contract Compliance Programs audits. Jillian has substantial experience in representing employers in wage & hour litigation and in conducting audits and compliance review of employer wage & hour policies and procedures.

Photo of Christine B. Hawes Christine B. Hawes

Christine B. Hawes is a counsel in Crowell & Moring’s Labor & Employment Group. Christine’s practice focuses on litigation of individual and class actions arising in all areas of labor and employment law, including:

  • Wage-and-hour laws, including the Fair Labor Standards Act, the

Christine B. Hawes is a counsel in Crowell & Moring’s Labor & Employment Group. Christine’s practice focuses on litigation of individual and class actions arising in all areas of labor and employment law, including:

  • Wage-and-hour laws, including the Fair Labor Standards Act, the Service Contract Act, and state and local laws
  • Title VII and state anti-discrimination laws
  • Americans with Disabilities Act
  • Family and Medical Leave Act and related state statutes
  • Federal and state whistleblower statutes, including the False Claims Act
  • Alleged wrongful termination
  • Non-competition agreements and other employee contracts
  • Misappropriation of trade secrets claims

Christine also provides counseling to clients on a wide variety of employment issues, including personnel policies, non-competition/non-solicitation agreements, employee discipline, contract disputes, and alleged retaliation under the False Claims Act, Title VII, the FLSA, and state whistleblower statutes. Christine frequently advises clients on and conducts internal investigations that frequently address employment, ethics, and compliance issues.  Additionally, Christine assists clients with affirmative action compliance, preparing affirmative action plans, analyzing compensation practices, and providing counseling in connection with Office of Federal Contract Compliance Programs audits.