Assigned for all purposes to: Van Nuys Courthouse East, Judicial Officer: Theresa Traber
Electronically FILED by Superior Court of California, County of Los Angeles on 06/19/2020 01:24 PM Sherri R. Carter, Executive Officer/Clerk of Court, by A. Salcedo,Deputy Clerk
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GOODWIN PROCTER LLP
ATTORNEYS AT LAW
SILICON VALLEY
COMPLAINT
1 Plaintiffs Seed Beauty, LLC ("Seed Beauty") and MM Cosmetics, LLC ("MM
2 Cosmetics" and collectively with Seed Beauty as "Seed" or "Plaintiffs") hereby complain and
3 allege against Defendant KKW Beauty, LLC, f01merly KKW Beauty, Inc., ("KKW" or
4 "Defendant" and collectively with Seed as the "Patties") and DOES 1 through 25 (collectively
6 NATURE OF CLAIMS
7 1. This is a case to prevent inepat·able hatm to Seed arising from the imminent and
8 material threat ofKKW's misappropriation of highly sensitive and confidential trade secret
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13 THE PARTIES
14 2. Plaintiff Seed Beauty, LLC, is a Califomia limited liability company, with its
19 4. Defendat1t KKW Beauty, LLC, f01merly KKW Beauty, Inc., is a Califomia limited
20 liability company, with its principal place of business in Woodland Hills in Los Angeles County,
21 California. Upon inf01mation and belief, KKW Beauty, Inc., a Califomia corporation, convelied
23 5. The tme names and capacities of the Defendants named herein as DOES 1 through
24 25, inclusive, m·e lmknown to Seed at this time. Seed sues these Defendants by such fictitious
25 names. Seed will atnend this Complaint to allege the true names and capacities of the fictitiously
26 named Defendants when Seed ascertains the identity of such Defendants. Seed is inf01med and
27 believes, and thereon alleges, that each and eve1y one of these Defendants is responsible in some
28 manner for the threatened misappropriation of Seed' s trade secrets which will damage and
GooDWlN PROCTER LLP
ATTORN£YSATL AW
SfUo:;:N V ALU!Y 2
COMPLAINT
1 irreparably hatm Seed, and that Seed's inevitable injmy, as alleged herein, will be proximately
4 6. This Comi has subject matter jmisdiction over this action under Article VI,
5 Section 10 of the Califomia Constitution, exercisable 1mder Section 410.10 of the Califomia Code
6 of Civil Procedme. The Comt also has jmisdiction over this action pmsuant to Section 1060 of
8 7. This Comi has personal jurisdiction over Defendant KKW because it resides, and
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13 9. Venue is also proper in this Comt pursuant to Califomia Code of Civil Procedure
14 §§ 395 and 395.5 because the contract was entered into, in pati, in this Com1ty, the comse of
15 conduct complained of herein occmred in Los Angeles County, Califomia, and because
16 Defendat1t transacts business and may be found within Los Angeles County.
17 FACTUAL ALLEGATIONS
21 11. Seed Beauty has a 1mique business model which allows it to incubate new brands
22 and products and swiftly bring them to ma1·ket. For example, Seed Beauty's unique business
23 model enabled it to create, develop , manufacture, store, sell, and distribute products for multiple
24 direct-to-consumer brands all m1der one roof and bring products to market in record speed based
25 entirely on consumer dematld. This business model, combined with the affordable, safe, and
26 high-quality nature of Seed Beauty's products, has skyrocketed young statt-up brands to beauty
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GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:NVALU!Y 3
COMPLAINT
1 12. One of Seed Beauty's most unique competencies is its ve1iical integration
2 capabilities. Seed Beauty employs hundreds of workers in Oxnard, Califomia. These workers
3 manufacture and ship products direct to consumers. As one of the last beauty manufacturers left
4 in the United States, investing and protecting jobs in America, and especially in California, has
6 13. Following the rapid and extraordinruy success of its many brands, several different
7 celebrities expressed interest in prutnering with Seed Beauty to create and/or develop beauty and
8 cosmetics brands using Seed Beauty's unique business model. To date, Seed Beauty has
9 incubated and grown numerous cosmetic lines. Seed Beauty's wildly successful brands include:
13 Kylie Cosmetics products. Since entering into the relationship with Seed Beauty, Kylie
14 Cosmetics dismpted the mru·ket ru1d becrune one of the fastest growing beauty brands in the
15 world. Kylie Cosmetics cunently has over 800+ different product SKUs developed ru1d owned
16 by Seed Beauty. This business deal helped King Kylie enonnously. In 2019, media repmis
17 valued King Kylie at over $ 1 billion after Coty, Inc. ("Coty") pmchased a 51% equity interest for
19 15. Neru·ly one yeru· after Seed Beauty began working on the Kylie Cosmetics brand,
20 Kylie Jenner's older sister, Kim Kardashian, approached Seed Beauty to do the srune with her
21 beauty and cosmetics brand, which was operated through Defendant KKW. And on or around
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rights to develop, manufacture, and distribute KKW Beauty products.
27 16. Seed Beauty' s business model, and the contracts related to its vru·ious product lines,
28 are maintained as trade secrets by Seed Beauty. Most importantly, the deals between
GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:N V ALU!Y 4
COMPLAINT
1 Seed Beauty and its pru1ners ru·e carefully maintained as trade secrets and ru·e not shru·ed with
2 competitors. The stmcture of those pru1nerships, as well as the economic temlS, are key
3 differentiators under Seed Beauty's business m odel and are important to Seed Beauty's success.
4 In fact, Seed Beauty's success depends in prui on the protection of its trade secrets and other
5 confidential information.
6 17. Because Seed Beauty' s business includes full scale, one-stop-shop creative and
7 logistical development services for ymmg and/or strut-up beauty brands, the details of Seed
8 Beauty's exclusive relationships with its beauty brand pat1ners necessru·ily includes highly
9 sensitive, confidential and trade secret infotmation regarding these relationships (including key
10 negotiated deal tenns) as well as the operation of Seed Beauty and its business model. As such,
11 Seed Beauty's trade secrets include, but are not limited to, non-public proprietruy and confidential
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20 (collectively, "Seed Beauty Trade Secrets").
21 18. The Seed Beauty Trade Secrets ru·e not generally known in the beauty indust1y, and
22 could not be leamed by others, if at all, without considerable expenditure of time, effott, or
23 expenses. And Seed Beauty ensures that its exclusive beauty brand and cosmetic prutners are
25 19. Such confidential trade secrets are highly valuable to Seed Beauty in the course of
26 conducting their business, because Seed Beauty derives economic value from the infotmation not
27 being made public, and any competitor who acquired such infotmation would be given an unfair
28 competitive advru1tage.
GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:N V ALU!Y 5
COMPLAINT
1 20. Specifically, the Seed Beauty Trade Secrets (including specifically
2 to which KKW has access to constitute trade secrets that are
3 essential to Seed Beauty' s competitive position in the beauty and cosmetics industly.
4 21. As a result, Seed Beauty goes to great lengths to ensme that the Seed Beauty Trade
5 Secrets, including specifically
6 are not disclosed t o the public and/or Seed Beauty's competitors who could, if privy to
7 the Seed Beauty Trade Secrets, use this info1mation to hrum Seed Beauty's existing relationships,
8 unfairly compete against Seed Beauty for other exclusive relationships in the beauty and
10 22. Such efforts by Seed Beauty to maintain the confidentiality of the Seed Beauty
11 Trade Secrets, include, but ru·e not limited to: (1) restricting access to the Seed Beauty Trade
12 Secrets, including at least by employing numerous mechanisms for seeming its office, including
13 key card access at the office entrance, additional key card and code access, with further
14 restrictions, at the laborat01y and development sites, and monitoring of the entire premises by
15 secmity persollllel employed by the office complex, (2) ensming that Seed Beauty's computer
16 network and systems are secme, including requiring passwords and other secmity verifications
17 for computer access where the Seed Beauty Trade Secrets may be stored, and limiting access to
18 electronic resomces only to those employees who need to access them within the scope of their
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23 . Additionally, all Seed
24 employees must sign non-disclosme agreements to ensme info1mation, including but not limited
26 As indicated above,
27 I Specifically,
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GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:N V ALU!Y 6
COMPLAINT
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19 24. Seed Beauty's competitive position would be gravely harmed if one of its
20 competitors were to gain access to the Seed Beauty Trade Secrets, as this would allow the
21 competing company to exploit many years' wo1ih of highly valuable knowledge and inf01mation
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GOODWJN PROCTER LLP
AT'T'ORN£YSATLAW
SJU<:XN VALU!Y 7
COMPLAINT
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3 Secrets
4 25. There is a concrete threat that KKW will disclose Seed Beauty Trade Secrets to
5 one of Seed Beauty's largest competitors, Coty, tmless KKW is enjoined from doing so by this
6 Com1.
7 26. In 2016, when Seed Beauty entered into an pat1nership with King Kylie,
8 in connection with the development, manufacture, sale, and distribution ofKylie Cosmetics
9 products, Seed Beauty, King Kylie, and Kylie Jenner entered into
10 agreement. That agreement also had numerous material and highly confidential
11 terms.
12 27. In or around Jm1e 2019, mediarep011s suggested that Coty was interested in
13 acquiring the Kylie Cosmetics brand through purchasing an equity interest in King Kylie. At or
14 armmd this time, John Nelson, Seed Beauty' s co-founder and CEO, notified King Kylie that it
15 was prohibited from disclosing Seed Beauty and King Kylie's tmderlying agreement to Coty, a
16 main competitor to Seed Beauty. King Kylie refused to confum or deny whether it had disclosed
18 28. On or around November 18, 2019, Coty issued a press release announcing its
19 intent to acquire the Kylie Cosmetics brand through purchasing a 51% equity interest in King
22 John Nelson again notified King Kylie that it was prohibited from disclosing Seed Beauty and
23 King Kylie 's underlying agreement to Coty, and King Kylie still refused to confmn or deny
25 29. On or around Januaty 6, 2020, Coty announced that the equity transaction between
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GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:N V ALU!Y 8
COMPLAINT
1 and-kylie-jellller-commence-strategic-partnership.1 Following this atmooocement, John Nelson
2 again notified King Kylie that it remained prohibited from disclosing Seed Beauty and King
3 Kylie's underlying agreement to Coty, and King Kylie neither confitmed nor denied whether it
4 had already disclosed the agreement to Coty. Further, Seed Beauty ooderstands that Seed
5 Beauty' s litigation cmmsel asked King Kylie's cmmsel whether Seed Beauty and King Kylie 's
6 ooderlying agreement and/or the te1ms therein had been disclosed to Coty, and King Kylie's
7 cooosel did not provide a clear, yes or no answer in response. As such, it remains ooclear
8 whether Seed Beauty and King Kylie 's ooderlying agreement was or has been fully disclosed to
9 Coty by King Kylie. Seed Beauty requested that Coty not close the transaction ootil this issue
10 was resolved. Coty and King Kylie ignored Seed Beauty's request and closed anyway. Shortly
11 thereafter, Coty alllloooced it was appointing a Coty-selected CEO for King Kylie.
12 30. Now, Seed Beauty has leamed that Coty intends to acquire the KKW Beauty brand
13 through purchasing an equity interest in KKW. On or aroood Jtme 3, 2020, various media outlets
14 reported that Coty is pursuing a collaboration with KKW Beauty regarding beauty products
16 https://www.bloomberg.com/news/ruiicles/2020-06-03/coty-in-talks-with-kim-kru·dashian-after-
17 kylie-jem1er-deal. On inf01mation and belief, the "collaboration" reported in the press is actually
18 a maj ority-stake investment in KKW. Seed Beauty is also infonned and believes that in
19 c01mection with this anticipated transaction, representatives of Coty have requested cettain
20 disclosures from KKW, including but not limited to copies of material commercial agreements.
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24 31. On inf01mation and belief, KKW is represented by the same cooosel that
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While Seed Beauty contends that both this conduct by Coty and
27 King Kylie violated material tetms of the agreement, this complaint
is limited to KKW ' s anticipated wrongful as a Beauty expressly
28 rese1ves any and all rights against King Kylie and Coty with respect to its agreement with King
Kylie or othetwise.
GooDWlN PROCTER LLP
ATTORN£YSATLAW
SfUo:;:N V ALU!Y 9
COMPLAINT
1 32. Because of the previous failmes to provide a clear answer related to the disclosme
3 Coty, Seed Beauty is gravely concemed that KKW will disclose Seed Beauty Trade Secrets to
4 Coty unless KKW is enjoined from doing so by this Com1. Such an unlawful disclosme would
5 cause ineparable hmm to Seed Beauty, including but not limited to by placing its most sensitive
6 and highly confidential trade secret inf01mation in the hands of one of its largest competitors.
4 competitors who could, if privy to the Seed Beauty Trade Secrets, use this infonnation to hann
5 Seed Beauty's existing relationships, tmfairly compete against Seed Beauty for other exclusive
6 relationships in the beauty and cosmetics industty, and/or engage in any other anti-competitive
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38. While KKW is in possession of cettain Seed Beauty Trade Secrets, including
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12 39. In light ofKKW's possession of, and Coty's request for, Seed Beauty Trade
13 Secrets, a serious and imminent threat of misappropriation of the Seed Beauty Trade Secrets by
14 KKW exists at this time, including but not limited to through any intentional (or even inadvettent)
16 Secrets, to Coty.
17 40. As such, ifKKW is not enjoined from doing so, it will misappropriate and use the
18 Seed Beauty Trade Secrets for its own benefit (i.e., receipt of a substantial acquisition payment)
19 and to Seed's detriment (i.e. , providing Seed Beauty Trade Secrets to Seed's main competitor, at
20 a minimum).
21 41. Seed seeks preliminruy and petmanent injtmctive relief to recover and protect its
22 confidential, proprietruy, and tt·ade secret infonnation and to protect its other legitimate business
23 interests. Seed's business operates in a competitive mru·ket and will suffer ineparable hrum
25 42. Seed has no adequate remedy at law for the present and threatened futme injmies
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2 on Seed's confidential and proprietmy trade secret infonnation and better understand Seed's
3 unique business model and pminership structure. Seed, therefore, is entitled to preliminmy and
4 petmanent injunctive relief prohibiting KKW from any misuse or disclosme of the Seed Beauty
5 Trade Secrets, and inf01mation derived therefrom, to compel KKW to retum all materials
6 incmporating, disclosing, or derived from Seed Beauty Trade Secrets, and/or to prevent KKW
9 Declaratory Relief
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15 44. An actual controversy exists between the pmties within the meaning of Califomia
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20 and, to date, KKW has not sought pemlission from Seed to disclose this
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22 As such, this Comt has the authority to issue a declm·atOiy judgment conceming
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GooDWlN PROCTER LLP
ATTORN£YSATLAW
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COMPLAINT
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5 and permanent injunction enjoining KKW from. among other activity. disclosing Seed's
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6 Confidential Information,
7 and/or otlter Seed Beauty Trade Secrets, to Coty or any other similarly-situated third
g party;
18 contract; and
19 H. Such other and further relief as this Court may deem just and proper.
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4 I am the Co-Founder and Chief Executive Officer of Plaintiff Seed Beauty, LLC, which is
6 I have read the foregoing Verified Complaint for (1) Violation of California Uniform
7 Trade Secrete Act, Cal. Civ. Code§ 3426 et seq.; and (2) Declaration of Rights Under a
9 The same is true of my own knowledge, except to those matters which are therein stated
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12 I declare under penalty of perjury under the laws of the State of California that the
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GOODWIN PROCTER LLP
ATIORNh"YSATLAW
511 !CON VAIII-:"'Y
VERIFICATION OF COMPLAINT