Goodwin Insights September 20, 2022

3 Reasons Beauty Cos. Should Consider Pursuing Patents

Intellectual property protection is more important than ever in the beauty industry as the market for cosmetics becomes more crowded and competitive.

Some cosmetic companies have used patents as a key tool to protect their market position. Beauty giant L'Oréal SA, which has a long history of obtaining patents to protect its beauty products, reported that it obtained 517 patents in 2021 alone.[1]

Over the past several years, a growing number of beauty companies, big and small, have sought patent protection to help build their intellectual property portfolios.

As the beauty industry evolves and competition continues to rise, beauty brands should consider patents as a tool to help protect their brands and stand out among the competition.

Patents Provide Strong Protection Against Copycats

Counterfeiting — copycat or dupe products that replicate popular or cult beauty products for a fraction of the price — is a major concern in the beauty industry and has skyrocketed in recent years.

Social media has further increased the market for copycat products and the ability for copycat brands to reach consumers, as accounts devoted solely to finding and promoting beauty copycats amass millions of followers and influencers have begun to promote dupes to the detriment of brand-name products.

Copycat products can be developed by copying a product's ingredients as listed on the label or through reverse engineering. However, if the copied brand does not have a patent covering its product or formulation, companies may succeed in producing and selling copycat products without any liability to the brand-name company.

Trade secret law, often relied upon in the beauty industry, does not provide full protection against copycat products. Specifically, if a product can be reverse-engineered or a copycat product can otherwise be developed based on information made public through marketing, the brand company may not be able to claim trade secret protection over its product.[2]

Many companies have learned this lesson the hard way.

For example, Olaplex filed suit against L'Oréal alleging misappropriation of Olaplex's trade secrets, including "using maleic acid during bleaching," after L'Oréal launched a competing product.[3]

In the 2021 Olaplex v. L'Oréal USA, Inc. decision, the U.S. Court of Appeals for the Federal Circuit found that the use of maleic acid during bleaching did not constitute a trade secret because the information was readily ascertainable through other sources at the time of the alleged misappropriation.[4]

Unlike trade secret protection, patents can provide beauty brands with strong protection against copycat products. Cosmetic companies can seek to patent various elements of their products, including anything from the formulation to the use of a specific ingredient to the method of using a cosmetic product.

For example, beauty giant Mary Kay has a patent portfolio including a patented "method for reducing a presence of sebum on skin, reducing an appearance of shiny skin and reducing an appearance of the size of skin pores,"[5] which the company says covers its Clear Proof Deep-Cleansing Charcoal Mask.[6]

Similarly, Laneige, a Korean skin-care brand, through its parent company, Amorepacific, patented a "method for removing keratinous skin material,"[7] which Laneige claims is used in its Water Sleeping Mask.[8]

Once a company is issued a utility patent covering its beauty product or features thereof, the brand is afforded 20 years of protection from the date of filing.

The company may then circumvent copycats by enforcing its exclusive right to produce and market the patented product. For example, Drunk Elephant LLC's C-Firma Day Serum has been touted by consumers as a more affordable alternative to SkinCeuticals cult product, CE Ferulic serum.[9]

After the product gained massive popularity, L'Oréal, which owns SkinCeuticals, filed a lawsuit in the U.S. District Court for the Western District of Texas, alleging that Drunk Elephant's product infringed L'Oréal's patents directed to a ferulic acid serum.[10] The parties eventually settled the 2018 lawsuit, L'Oréal USA Creative Inc. v. Drunk Elephant LLC, outside of court.

While patents can provide stronger enforcement rights than trade secrets, patents do come with a few trade-offs that cosmetic companies should consider prior to patenting their beauty products.

For instance, to obtain a patent, the inventor must publicly disclose many details about the invention in the application. Although beauty brands are already required to publicly disclose ingredients, patents may require a more detailed disclosure, such as the amount of each ingredient or the steps to produce a certain formulation.

It is also important for beauty brands to consider the expense that comes with obtaining and enforcing patent rights. As a result, brands may want to focus on patenting only the novel features of their products that are most likely to be copied.

Public disclosure of a formula or product also creates the possibility that a competitor may design around a patent, for instance by swapping out certain ingredients in a claimed formulation, to attempt to avoid infringing the patent.

Beauty Brands Can Stand Out by Patenting Their Packaging

Distinctive and attractive product packaging and design is essential to a successful beauty brand. Social media has allowed a vast number of indie and up-and-coming beauty brands to reach new consumers and gain popularity. With the rise in options for consumers, brands have turned to unique packaging as a way to stand out.

To avoid competitors' attempts to capitalize on an established brand's customer base by mimicking the brand's packaging, various cosmetic brands have looked beyond trademark or copyright protection and are patenting their packaging.

One way to do this is by filing an application for a design patent, which affords the patent owner 15 years of protection from the date the patent is granted.

Mary Kay Inc. is one brand that has taken this approach and has a number of design patents covering the packaging of a variety of its product lines, such as its Cityscape perfume and cologne,[11] its Lash Love mascara,[12] and its Mary Kay compact.[13]

Other brands have also begun to patent their packaging, such as ELF Beauty Inc., which has several pending design patent applications, including a design for its Halo Glow Liquid Filter.[14]

Further, with the fashion and beauty industries' increased focus on sustainability of late, a number of brands are seeking to make a name for themselves in the sustainability space by patenting their sustainable or biodegradable packaging.

For example, South Korean skin-care brand, GDK Cosmetics Co., was recently issued a utility patent for its "cosmetic mask kit packed in biodegradable packing material."[15]

Similarly, Unilever PLC has an international patent application on "post-consumer resin packaging."[16] Companies solely focused on developing packaging for beauty products, such as APC Packaging, have also jumped on the sustainable packaging patent trend, filing a series of patent applications directed to:

  • A dropper "composed entirely of recyclable material having the same recycle code";[17]
  • A "replaceable jar package ... with the recycle code of '5' which can be made at varying levels of post-consumer recycled polypropylene";[18] and
  • A "reusable bottle package ... with the recycle code of '5' which can be made at varying levels of post-consumer recycled polypropylene."[19]

By patenting sustainable packaging, brands may be able to keep copycats from mimicking the look of the brand and could also secure a firm space in the sustainable beauty market.

Technology and Beauty Combine to Create an Influx of Patented At-Home Beauty Devices

At-home beauty treatments have seen increased popularity over the past few years, particularly in light of the COVID-19 pandemic.[20] Now more than ever consumers are purchasing cosmetic products online for use at home and skipping in-person services.[21]

Patents filed by cosmetic companies in recent years reflect this shift. L'Oréal filed a number of patent applications directed toward various new beauty devices, including an application for a device to provide customers with a "personalized skincare recommendation"[22] and "[a] skin care device having [an] energy regenerating end effector."[23]

Other big beauty brands have followed suit, as Coty Inc. recently filed a patent for its new "device for personalizing fragrance."[24]

Smaller beauty companies have also taken advantage of patents to protect their cosmetic devices and secure investments. One example is Droplette Inc., which markets an at-home facial diffuser, designed to deliver skin care ingredients deep into the skin and marketed as being more effective than topical skin care.

Droplette received a patent with claims directed to "a fluid delivery device" in 2017.[25] With this patent, Droplette was able to raise capital[26] and was recently named by Glamour as one of the best beauty innovators of 2022.[27]

Conclusion

Patents have been and will continue to be a strong tool for beauty companies to protect their intellectual property. Going forward, the beauty industry may see an increase in patent enforcement actions to combat the massive copycat market.

Additionally, cosmetic companies may use design patents to further protect the look and feel of their brands. Finally, as the industry continues to converge with the technology sector to bring innovative at-home beauty products to market, beauty brands should consider patenting beauty devices and other products to preserve their niche in the market.


This article was originally published by Law360.

[1] See L'Oréal, 2021 Annual Report – The Essentials, at 2, available at: https://www.loreal-finance.com/system/files/2022-03/LOREAL_2021_Annual_Report.pdf.
[2] See, e.g., Russo v. Ballard Medical Prods., 550 F.3d 1004, 1012 (10th Cir. 2008) ("Trade secret laws, after all, provide far weaker protection than patent law in critical respects. . . . [T]rade secret laws do nothing to foreclose others from discovering the trade secret holder's idea (either independently or by means of reverse engineering) and exploiting it for profit publicly." (citing Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 478-78 (1974))).
[3] Olaplex v. L'Oréal USA, Inc., 855 Fed. App'x 701, 706-07 (Fed. Cir. 2021).
[4] Id. at 708.
[5] U.S. Patent No. 10,251,832 (issued Apr. 9, 2019).
[6] See Patents, MARYKAY, available at: https://www.marykay.com/en-us/about-mary-kay/our-product-promise/patents.
[7] U.S. Patent 9,675,650 at Abstract (issued Jun. 13, 2017).
[8] See Water Sleeping Mask, Laneige, available at: https://us.laneige.com/products/water-sleeping-mask.
[9] C. Wischhover, Beauty junkies love cheap dupes of expensive products, Vox, available at: https://www.vox.com/the-goods/2018/11/16/18098503/loreal-drunk-elephant-skinceuticals-lawsuit.
[10] L'Oréal USA Creative, Inc. v. Drunk Elephant, LLC, 1:18-cv-00982, Dkt. No. 1 (W.D. Tex. Nov. 14, 2018).
[11] U.S. Patent No. D741,723 (issued Oct. 27, 2015); see Patents, MaryKay, available at: https://www.marykay.com/en-us/about-mary-kay/our-product-promise/patents.
[12] U.S. Patent No. D616,608 (issued May 25, 2010); see Patents, MaryKay, available at: https://www.marykay.com/en-us/about-mary-kay/our-product-promise/patents.
[13] U.S. Patent No. D555,288 (issued Nov. 13, 2007); see Patents, MaryKay, available at: https://www.marykay.com/en-us/about-mary-kay/our-product-promise/patents.
[14] Patents, e.l.f.com, available at https://www.elfcosmetics.com/patents/.
[15] U.S. Patent No. 11,000,456 (issued May 11, 2021).
[16] WO 2021151797 (issued May 8, 2021).
[17] U.S. Patent No. 11,148,131 at Abstract (issued Oct. 19, 2021).
[18] U.S. Patent No. 10,829,271 at 4:62-64 (issued Nov. 10, 2020).
[19] U.S. Patent No. 10,781,033 at 6:19-22 (issued Sept. 22, 2020).
[20] See B. Fulton, At-home beauty tech sees a lockdown boom, Vogue Business available at: https://www.voguebusiness.com/technology/at-home-beauty-tech-sees-a-lockdown-boom.
[21] See id.
[22] U.S. Patent Publication No. 2022/0249012 at Abstract (published Aug. 11, 2022).
[23] U.S. Patent No. 11,413,212 at Abstract (issued Aug. 16, 2022).
[24] U.S. Patent No. 10,835,017 (issued Nov. 17, 2020).
[25] U.S. Patent No. 9,700,686 (issued July 11, 2017).
[26] M. Haider, How Two MIT Grads Created A Painless Mist To Repair And Rejuvenate Skin Without Needles Or Creams, Forbes, available at: https://www.forbes.com/sites/monicahaider/2020/10/29/how-two-mit-grads-created-a-painless-mist-to-repair-and-rejuvenate-skin-without-needles-or-creams/?sh=60427deb8a44.
[27] A. Escalante, The Best Beauty Innovators of 2022, Glamour, available at: https://www.glamour.com/gallery/best-beauty-innovators-of-2022.