Even the food & beverage industry has trade secret challenges!
Starbucks was sued last year for breach of implied contract and trade secret theft over coffee-flavored lip gloss.
Members of the Balmuccino company met with Starbucks’ head of product development Mesh Gelman to pitch their lip gloss product. Balmuccino asked that their NDA be signed, but Gelman deflected and didn’t sign. Balmuccino gave lots of information about the lip gloss, including information about material suppliers. Gelman kept a copy of the pitch deck, too.
Starbucks approached the same material suppliers to make their own lip gloss using the same Balmuccino recipes, but completely bypassing Balmuccino.
The lawsuit was originally filed in California, but dismissed for lack of jurisdiction. It was refiled in Washington last October. It’s still pending, so we’ll see how it plays out.
Many lessons here, including: get at least an NDA in writing, and don’t share every tiny detail during your first meeting.
SEE UPDATE: Procedure is Everything, Substance is nothing