Estee Lauder sued over alleged tech theft
Estee Lauder (EL.N) faces a lawsuit from beauty tech startup Nomi Beauty. The startup claims the cosmetics giant stole technology that helped it track customer preferences and boost sales in hotels. Nomi says this move effectively put it out of business.
The complaint was filed Friday night in Manhattan federal court. Nomi alleges that Estee Lauder has generated billions in new revenue using technology it abandoned under contracts in 2018 and 2020.
Nomi’s “secret sauce.”
Nomi, short for “know me,” developed tools to help Estee Lauder brands like Clinique and MAC increase revenue from luxury hotel duty-free shops and in-room purchases.
Instead of honoring contracts or purchasing Nomi outright, Nomi says Estee Lauder cut off its hotel partners from products while launching similar programs in China, Costa Rica, Malaysia, the UK, and the U.S. These programs allegedly use the same trade secrets Nomi shared for years.
Damages sought
Nomi is seeking compensatory, punitive, and triple damages. Matthew Schwartz, Nomi’s lawyer, said: “Nomi’s stolen innovations brought Estee Lauder into the information age, and Estee Lauder continues to profit from them wildly.”
Estee Lauder has not commented. Both companies are based in New York.
Background
Since last February, Estee Lauder has pursued a “Beauty Reimagined” strategy. This includes new prestige product launches, streamlining the supply chain, and up to 7,000 job cuts to boost sales.
