Coffee giant accused of lip balm theft in trade secrets suit
The lawsuit involves a coffee-flavoured lip balm | Starbucks accused of swiping confidential information revealed during a pitch.
Starbucks is facing a lawsuit over the alleged misappropriation of trade secrets relating to coffee-flavoured lip balms.
Balmuccino filed the complaint at the US District Court for the Western District of Washington on October 21.
The global coffee company stands accused of using information developed by the California-based company to create its own Starbucks-branded liquid lipsticks/glosses called ‘ The S’mores Frappucino Sip Kit’.
Disclosure of confidential information
The plaintiff alleges it shared “a pitch deck along with fully realised prototypes” for Balmuccino’s coffee-flavoured lip balms with Starbucks’ then-head of product development and senior vice president, Mesh Gelman, during a meeting held in 2017.
Mehmet Cengiz Öz, a Turkish-American celebrity and Republican Senate candidate brokered the meeting to determine whether the companies could embark on a joint venture.
Oz, sister-in-law of Samantha Lemole, a Balmuccino managing member, had put Lemole in contact with Starbucks chief executive Howard Schultz, who suggested Lemole reach out directly to Gelman. Gelman left the company two-weeks after the meeting, according to the filing.
According to the filing, Balmuccino’s co-founder Meredith Scott Lynn, lead chemist and product manufacturer, Vince Spinnato, and branding director, Faith Miller, as well as Lemole, allegedly disclosed confidential information during the meeting.
The complaint held that this information related to the company's “concepts and products, the creation of lip balms, the different flavour possibilities” as well as “details of the entire process, including the names and locations of the material suppliers and manufacturers that had been involved during the near two-year development process”.
‘Discovery’ of launch
Following the meeting, Gelman allegedly declined to sign a non-disclosure agreement, and retained the pitch deck.
In 2018, Balmuccino claims that it discovered that Starbucks had reached out to one of its suppliers to request prototype coffee-flavoured ‘Starbucks-branded lip balm and lip balm cases’, allegedly using specifications “identical” to the ones given during the 2017 meeting. In 2019, Starbucks launched its ‘ S’mores’ lipsticks/glosses.
The suit accuses Starbucks of breach of implied-in-fact contract, breach of oral contract, breach of confidence and trade secret misappropriation.
The plaintiff seeks a jury trial, and seeks general, special and punitive damages, as well as damages for loss of past, present and future economic losses, “royalty and/or disgorgement of unjustly earned monies”, pre- and post-judgment interest and costs.
Starbucks and the legal representatives of Balmuccino did not immediately return a request for comment.
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