Connect with us

Business

Manufacturer Behind Kylie Cosmetics and KKW Beauty Sues to Keep Coty From Stealing Its Trade Secrets

Published

on

  • Seed Beauty, the company that manufactures Kim Kardashian West and Kylie Jenner’s makeup lines, believes Kylie Cosmetics gave confidential trade secrets to its competitor, Coty Inc, which Jenner sold 51% of her brand to earlier this year.
  • Seed is now suing Kylie Cosmetics and Coty in an effort to stop them from sharing and using those secrets. 
  • The lawsuit comes just days after Seed won a temporary injunction in a similar case against KKW Beauty, which Coty recently acquired 20% of, preventing it from sharing confidential information as well. 
  • KKW Beauty denied claims that it shared information with Coty, and though Coty and Kylie Cosmetics have not responded to the lawsuit yet, they will likely argue that Seed’s allegations are speculative and that the secrets it claims Kylie Cosmetics shared aren’t actually trade secrets.

Kardashian-Jenner’s Strike Deals With Coty Inc.

The company behind Kylie Jenner and Kim Kardashian West’s makeup lines, Seed Beauty, is taking legal action to protect its trade secrets now that both stars have massive deals with Coty Inc. 

Coty Inc. is the beauty conglomerate that owns brands like CoverGirl, Sally Hansen, Rimmel, and others. It has recently made headlines for striking million-dollar deals with the sisters in what some view as an effort to refresh their image and attract a younger audience. For some time now, Coty has been struggling to keep up with its competitors in the industry, so it seems like their new strategy is to link up with more social media-driven brands like Kardashian West and Jenner’s.

Earlier this year, Coty bought 51% of Kylie Cosmetics for $600 million, and just this week, news broke that Kardashian West sold 20% of KKW Beauty to the company for $200 million.

The deals were huge for the sisters, valuing both of their brands at around $1 billion and leaving them each with net worths of $900 million. However, the deals were pretty concerning for Seed Beauty, which partnered with Jenner since her line started in 2016, taking care of logistics, manufacturing, development, storage, and distribution. 

Seed also took on the same responsibilities for KKW Beauty when Kardashian West launched the line in 2017. Now, Seed Beauty is worried that Coty has, and will continue to, get access to the secrets that it believes make Seed a strong force in the beauty industry. 

Seed Beauty Sues After Kylie Cosmetics Allegedly Shares Trade Secrets 

On June 30, Seed Beauty filed a civil lawsuit against Coty and King Kylie, the LLC behind Kylie Cosmetics, to prevent the misappropriation of trade secrets. 

The lawsuit says that because of Coty’s inability to “successfully compete in the new digital cosmetics world through its own innovation,” the company has engaged in a plan “to steal the secret sauce behind Seed,” through its deals with the sisters.

The suit claims, “Coty made a $600 million investment in King Kylie, but it really was a subterfuge to learn Seed’s confidential business methodologies.”

“Any competitor who acquired such information would be given an unfair competitive advantage,” it adds. 

The suit also alleges that Kylie Cosmetics knowingly shared Seed Beauty’s confidential intellectual property and Coty knowingly accepted that information. The complaint is highly redacted, so it doesn’t specify the secrets that Seed wants to keep private, but it could include things like information about product formulations, information about the business’ core operations, and the structure of its partnerships, according to Forbes. 

Seed says it repeatedly asked Kylie Cosmetics not to share certain parts of their partnership agreement over the course of negotiations with Coty, which were rumored to have begun in June of 2019. 

However, according to the suit, Jenner’s team refused to confirm or deny whether or not they had shared information. Seed also says it asked Coty not to ask for, or use, its trade secrets, but Coty similarly refused to assure Seed that it wouldn’t.

Now, Seed Beauty is asking the court to permanently bar Kylie Cosmetics from disclosing it’s trade secrets. It’s also asking that the court force Coty to promise not to use information that it’s already allegedly acquired. On top of that, it wants Coty to be prevented from developing any color cosmetics with Kylie Cosmetics for a period of time that was redacted in the suit.

“This action is to stop Coty’s theft of Seed’s pioneering and proprietary digital-first business model that has revolutionized the cosmetics industry,” the suit says.

Injunction Against KKW Beauty 

But again, the Seed’s concerns don’t just focus solely on Coty’s relationship with Kylie Cosmetic. In expectation of a Coty-KKW deal, Seed filed a similar lawsuit against KKW Beauty, also seeking protection of its trade secrets. 

Seed filed the lawsuit on June 19, likely after learning from its experience with her sister’s deal. KKW Beauty then filed an opposition to the lawsuit, claiming that Seed’s legal action was an “attempt to stifle the success of the Kardashian-Jenner family.” It also argued that KKW Beauty did not share any trade secrets with Coty and requested that the court compel arbitration.

KKW Beauty lawsuit reads, “The purported harm to Seed is entirely speculative, unfounded, and already complete,”

“By contrast, KKW stands to suffer comparatively more significant harm if the Court were to enter the amorphous injunction proposed by Seed.”

Ultimately, the court granted the temporary order, which lasts until August 21. That order prevents the brand from sharing details about its partnership with Seed, including “the terms of those agreements, information about license use, marketing obligations, product launch and distribution, revenue sharing, intellectual property ownership, specifications, ingredients, formulas, plans and other information about Seed products.”

Still, that court order didn’t stop Kardashian West and Coty from striking a deal, which was formally announced on June 29, and this legal situation is far from over.

It’s likely that Coty and Kylie Cosmetics will both argue that Seed’s allegations are speculative and that the secrets it claims Kylie Cosmetics shared aren’t actually trade secrets.

Still, the legal battles may be worth it in Seed Beauty’s eyes, as it has built itself quite a good reputation in the industry. According to the lawsuit, Seed goes to great lengths to protect its trade secrets by doing things like limiting access to areas of its factory, requiring all employees to sign non-disclosure agreements, and having security monitor the property.

In the Beauty space, Seed is well known for its speed and efficiency thanks to what it calls its “unique business model,” which makes it capable of turning an idea into a product within weeks. The company is not only known for working with the Kardashian-Jenner’s but is also massively successful for its own line, Colourpop Cosmetics, as well as its partnership with YouTuber Tati Westbrook for her new cosmetics line.

So it’s not surprising to see Seed go to great lengths to keep its secrets to success out of its competitor’s hands.

Coty and Kylie Cosmetics have not yet formally responded to the lawsuit or issued a public comment. The first court hearing is scheduled for October, according to Insider.

See what others are saying: (Forbes) (Business Insider) (The Fashion Law

Business

FDA Recalls 11,000 Ice Cream Containers and Sportsmix Pet Food Products

Published

on

  • Over 11,000 cartons of Weis Markets ice cream were recalled after a customer discovered an “intact piece of metal equipment” inside a 48-ounce container of the brand’s Cookies and Cream flavor. 
  • The FDA also expanded a recall of Sportsmix pet food over concerns that the products may contain potentially fatal levels of aflatoxins.
  • So far, more than 70 dogs have died and more than 80 pets have become sick after eating Sportsmix food. The agency recommends taking your pet to a veterinarian if they have eaten the recalled products, even if they aren’t showing symptoms.

Metal Pieces in Weis Ice Cream Cause Massive Recall

The Food and Drug Administration announced two major product recalls this week following serious consumer complaints.

The first came Sunday when the agency revealed that over 11,000 cartons of Weis Market ice cream were recalled. “The products may be contaminated with extraneous material, specifically metal filling equipment parts,” the FDA’s statement explained.

At least one customer discovered an “intact piece of metal equipment” inside a 48-ounce container of the brand’s Cookies and Cream flavor.

Those containers were available in 197 Weis Market grocery stores, but they have already been pulled from shelves. The products have a sell-by date of October 21, 2020, and customers who purchased the product can return it for a full refund.

Along with removing 10,869 units of the Cookies and Cream containers, the brand also recalled 502 3-gallon bulk containers of Klein’s Vanilla Dairy Ice Cream.

Those bulk containers were not for retail sale, but were instead sold to one retail establishment in New York and have since been removed.

Sportsmix Recall Follows 70 Pet Deaths, 80 Illnesses

The second major recall came Tuesday when the FDA expanded a recall of Sportmix dog food.

According to the agency, the product may contain potentially fatal levels of aflatoxins – toxins produced by the Aspergillus flavus mold, which can grow on corn and other grains used as ingredients in pet food.

As of Tuesday, more than 70 pets have died and more than 80 have gotten sick after eating Sportsmix pet food. Not all the cases have been officially confirmed as aflatoxin poisoning at this time. This count also may not reflect the total number of pets affected.

For now, the FDA is asking pet owners and veterinary professionals to stop using the impacted Sportsmix products that have an expiration date on or before July 9, 2022, and have “05” in the date or lot code.

More detailed information about the recalled products can be found on the FDA’s announcement page.

Pets experiencing aflatoxin poisoning may have symptoms like sluggishness, loss of appetite, vomiting, jaundice, and/or diarrhea. In some cases, this toxicity can cause long-term liver issues without showing any symptoms. Because of this, pet owners are being advised to take their animals to a veterinarian if they have eaten the recalled products, even if they aren’t showing symptoms.

There is currently no evidence that pet owners who have handled the affected food are at risk of aflatoxin poisoning. Still, the FDA recommends that wash your hands after handling pet food.

See what others are saying: (CNN) (USA TODAY) (PEOPLE)

Continue Reading

Business

Signal and Telegram Downloads Surge After WhatsApp Announces It Will Share Data With Facebook

Published

on

  • Downloads for Signal and Telegram have skyrocketed in the last week, with the encrypted messaging apps boasting 7.5 million and 9 million new followers, respectively.
  • The growth comes after WhatsApp said it will require almost all users to share personal data with its parent company Facebook.
  • It also comes after Parler’s shutdown and bans against President Trump from Twitter and Facebook, which prompted his supporters to turn specifically to Telegram.

Telegram and Signal See Big Boost

Downloads for the encrypted messaging apps Signal and Telegram have surged in the last week after WhatsApp announced that it will start forcing all users outside the E.U. and U.K. to share personal data with Facebook.

Last week, WhatsApp, which is owned by Facebook, told users that they must allow Facebook and its subsidiaries to collect their phone numbers, locations, and the phone numbers of their contacts, among other things.

Anyone who does not agree to the new terms by Feb. 8 will lose access to the messaging app. The move prompted many to call for people to delete WhatsApp and start using other services like Signal or Telegram.

Now, it appears those calls to use other encrypted messaging apps have been heard. According to data from app analytics firm Sensor Tower, Signal saw 7.5 million installs globally through the App Store and Google Play from Jan. 6 to Jan. 10 alone, marking a 4,200% increase from the previous week.

Meanwhile, Telegram saw even more downloads. During the same time, it gained 9 million users, up 91% from the previous week. It was also the most downloaded app in the U.S.

WhatsApp responded to the exodus by attempting to clarify its new policy in a statement Monday.

“We want to be clear that the policy update does not affect the privacy of your messages with friends or family in any way,” the company said. “Instead, this update includes changes related to messaging a business on WhatsApp, which is optional, and provides further transparency about how we collect and use data.”

Other Causes of App Growth

Notably, some of the spikes in the Telegram downloads, specifically, also come from many supporters of President Donald Trump flocking to alternative platforms after Parler was shut down and Trump was banned from Twitter and Facebook.

Far-right chat room membership on the platform has increased significantly in recent days, NBC News reported. Conversations in pre-existing chatrooms where white supremacist content has already been shared for months has also increased since the pro-Trump insurrection at the U.S. Capitol last week.

According to the outlet, many of the president’s supporters have moved their operations to the app in large part because it has very lax community guidelines. Companies like Facebook and Twitter have recently cracked down on groups and users sharing incendiary content, known conspiracy theories, and attempting to organize events that could lead to violence.

There have been several documented instances of Trump supporters now using Telegram channels to discuss planned events and urge acts of direct violence. Per NBC, in one channel named “fascist,” users have called on others to “shoot politicians” and “encourage armed struggle.” A post explaining how to radicalize Trump supporters to become neo-Nazis also made rounds on the “fascist” channel, among others. 

Membership one channel frequently used by members of the Proud Boys has grown by more than 10,000 in recent days, seeming to directly attract users from Parler.

“Now that they forced us off the main platforms it doesn’t mean we go away, it just means we are going to go to places they don’t see,” a user posted in the chatroom, according to NBC.

See what others are saying: (NBC News) (Business Insider) (CNBC)

Continue Reading

Business

Pornhub Removes All Unverified User Uploads, Taking Down Most of Its Videos

Published

on

  • Pornhub is now removing all videos that were not uploaded by verified users.
  • Before the massive purge, the site hosted around 13.5 million videos. As of Monday morning, there were only 2.9 million videos left. 
  • The move is part of a series of sweeping changes the company made days after The New York Times published a shocking op-ed detailing numerous instances of abuse on the site, including nonconsensual uploads of underage girls.
  • Following the article, numerous businesses cut ties with the company, including Mastercard and Visa, which both announced Thursday that they will not process any payments on the site.

Pornhub Purges Videos

Pornhub removed the vast majority of its existing videos Monday, just hours after the company announced that it would take down all existing videos uploaded by non-verified users.

According to reports, before the new move was announced Sunday night, Pornhub hosted about 13.5 million videos, according to the number displayed on the site’s search bar. As of writing, that search bar shows just over 2.9 million videos. 

The decision comes less than a week after the company announced it would only allow video uploads from content partners and members of its Model program.

At the time, Pornhub claimed it made the decision following an independent review launched in April to eliminate illegal content. However, many speculated that it was actually in large part due to an op-ed published in The New York Times just days before. That piece, among other things, found that the site had been hosting videos of young girls uploaded without their consent, including some content where minors were raped or assaulted.

The article prompted a wave of backlash against Pornhub and calls for other businesses to cut ties with the company. On Thursday, both Visa and Mastercard announced that they would stop processing all payments on the site.

“Our investigation over the past several days has confirmed violations of our standards prohibiting unlawful content on their site,” Mastercard said in a statement.

Less than an hour later, Visa tweeted that it would also be suspending payments while it completed its own investigation.

Pornhub Claims It’s Being Targeted

However, in its blogpost announcing the most recent decision, Pornhub claimed that it was being unfairly targeted.

Specifically, the company noted that Facebook’s own transparency report found 84 million instances of child sexual abuse content over the last three years. By contrast, a report by the third-party Internet Watch Foundation found 118 similar instances on Pornhub in the same time period.

Notably, the author of The Times report, Nicholas Krisof, specifically said the Internet Watch Foundation’s findings represented a massive undercount, and that he was able to find hundreds of these kinds of videos on Pornhub in just half an hour.

Still, the site used the disputed numbers to point a finger at others.

“It is clear that Pornhub is being targeted not because of our policies and how we compare to our peers, but because we are an adult content platform,” the statement continued.

“Every piece of Pornhub content is from verified uploaders, a requirement that platforms like Facebook, Instagram, TikTok, YouTube, Snapchat and Twitter have yet to institute,” the company added. 

However, Pornhub’s implication that it is somehow more responsible because it only let verified users post content is a highly impractical comparison. First of all, Pornhub is a platform created exclusively for porn, content the social media companies the company name-checked explicitly prohibit.

Second of all, and the vast majority of people who use those platforms are not verified, and it would be impossible for a company like Facebook or YouTube to limit content to only verified users without entirely undermining their own purposes.

Verification Concerns

Even beyond that, there are also still questions about Pornhub’s verification process. According to their site, all someone needs to do to become verified is to simply have a Pornhub account with an avatar and then upload a selfie of themselves holding a piece of paper with their username and Pornhub.com written on it.

While the company did tell reporters the process would be made more thorough sometime next year, they did not provide any specific details, prompting questions about exhaustive the verification process will ultimately be.

That question is highly important because, at least per its current policies, the verification process makes it so users are eligible to monetize their videos as part of the ModelHub program.

If the new verification process is still weak or has loopholes, people could easily slip through the cracks and continue to profit. However, on the other side, there are also big concerns among sex-workers that if the process is too limited, they will be able to make money on the platform.

That concern has already been exacerbated by some of the other actions taken since The Times article was published. For example, after Mastercard and Visa made their announcements, numerous sex workers and activists condemned the decision, saying it would seriously hurt how porn performers collect income —  not just on Pornbub, but on other platforms as well. 

“By targeting Pornhub and successfully destroying the ability for independent creators to monetize their content, they have made it easier to remove payment options from smaller platforms too,” model Avalon Fey told Motherboard last week. “This has nothing to do with helping abused victims, and everything to do with hurting online adult entertainers to stop them from creating and sharing adult content.”  

Other performers also expressed similar concerns that the move could spillover to smaller platforms. 

“I am watching to see if my OnlyFans will be their next target and sincerely hoping not,” amateur performer Dylan Thomas also told the outlet.

“Sex workers are scared by this change, despite not having uploaded any illegal content,” Fey continued, “because we have seen these patterns before and have had sites and payment processors permanently and unexpectedly shut down.”

See what others are saying: (Motherboard) (The Verge) (Bloomberg)

Continue Reading