When An Acquisition Goes All Hairy Due To Trade Secrets Theft

Another case of big vs small: ‘ we want to acquire you, oh hang on now we know what you do we don’t any more’!

In 2015, startup Olaplex invented and patented breakthrough hair technology, which protected hair from chemical treatments.

L’Oréal were interested and Olaplex shared confidential data under an NDA during acquisition talks.

When the deal collapsed L’Oreal launched their own competing product.

Olaplex sued for trade secret misappropriation, patent infringement, and breach of NDA.

In 2019, a jury awarded Olaplex $91.3M. But in 2021, this was overturned, as it was ruled Olaplex hadn’t sufficiently proven its trade secrets!

Lessons:

Document everything: Date stamp disclosures and maintain clear records.

Use robust NDAs as part of your defence but do not rely on them alone.

Consider third-party notarisation or immutable date stamping tools.

Trade secrets are valuable but fragile IP. Protecting them requires more than legal paperwork, it demands operational discipline, digital traceability and a good strategy.

Would you trust your trade secrets in an M&A negotiation?