In a recently filed lawsuit, a small California company called Olaplex alleges it is living every startup’s worst nightmare. Olaplex says it revealed its intellectual property to an industry giant interested in acquiring it, but then talks fell through and the larger rival launched suspiciously similar products. While it remains to be seen if Olaplex’s claims have merit, intellectual property lawyers say the case highlights some of the risks associated with mergers and acquisitions.
Olaplex brought a patent infringement case on Nov. 22 against cosmetics giant L’OrÉal USA Inc. Olaplex alleges that L’OrÉal approached it in 2015 to discuss a possible acquisition. L’OrÉal was given access to confidential information, including a then-unpublished patent application related to hair bleaching, the lawsuit says. But when the acquisition fell apart, L’OrÉal “took and copied Olaplex’s technology without authorization,” according to the complaint Olaplex filed in U.S. District Court in Los Angeles.
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