Kim Kardashian's KKW Beauty is one of the most successful beauty lines in Hollywood. However, each business is always prone to troubles, and she is not exempted from it.
On June 19, Seed Beauty, Kim's partner for her beauty line, filed a lawsuit against KKW Beauty as they seek protection of their trade secrets.
A few days later, they won a court order temporarily impeding Kim from sharing their trade secrets. The said injunction came after the "Keeping Up With The Kardashians" star sold a stake to Seed Beauty's rival company, Coty Inc.
Coty had been in talks with Kim for a possible collaboration months after winning a $600 million deal with Kylie Cosmetics, Kylie Jenner's line.
Seed Beauty previously established a partnership with Kylie, as they typically partner with celebrities to create brands and manufactures their products.
As stated in the document, Seed Beauty alleged that Coty would gain "an unfair competitive advantage" from access to Oxnard, California-based Seed's "most sensitive and highly confidential information."
Furthermore, they believe that Coty is just using the deal with Kim to obtain their highly confidential trade information, including the direct-to-consumer business model they developed.
"We are pleased that the court recognized the threat posed to Seed, and we will take further action as needed to protect our rights and business agreements," Seed said in a statement through its lawyer.
The court granted Seed Beauty temporary order on June 26, and it will last until August 21.
This forbids the KKW Beauty owner from divulging any Seed-KKW relationship details, 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."
Coty Won Over Seed?
Despite the warning Coty Inc. and Kim received, the two secured a deal, with the former buying 20 percent of Kim's makeup brand KKW Holdings LLC for $200 million.
According to Forbes' estimates, KKW Beauty now reached the $1 billion mark, pushing Kim Kardashian's net worth to $900 million.
"Kim is a true modern-day global icon," Coty chairman and CEO Peter Harf said in a statement. "This influence, combined with Coty's leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands."
For what it's worth, Coty has been trying to get back on track after struggling in recent years.
According to a report by TMZ in November, Coty's stock value plummeted to $11.53 per share following their stake purchase on Kylie Cosmetics. It was their lowest for the month of November, which they saw as a bad sign considering their recent acquisition.
In the same month last year, CNBC's report stated that Coty Inc. could not really afford to make substantial acquisitions. Thus, valuing Kylie Cosmetics at $1.2 billion may have affected the company's stock trading.
Only time will tell whether Coty will experience a huge drop in their shares again once they fully secure their collaboration with Kim.