Makers of Anti-Aging Products Struggle With Anti-Competition
Its an age-old problem: someone starts a company and later sells it, then starts another company and winds up in competition with the one they sold. But isn’t all fair in love, war, and business? Well maybe, maybe not.
The Superior Court of California (Los Angeles County) will have to decide in one such case involving two companies founded by the same man, industry leader Dr. Zein Obagi. ZO Skin Health (ZO), a company founded by Dr. Zein Obagi, has filed a lawsuit in Los Angeles County Superior Court seeking an injunction and other relief against Obagi Medical Products (OMP), another company founded by Dr. Obagi but later sold to outside investors.
The suit claims, among other things, anti-competitive practices by OMP. According to the complaint, OMP contacted a would-be e-commerce distributor that stood ready to distribute a new product line for ZO Skin Health. Apparently, OMP informed the distributor of a non-compete agreement between the parties, thus stopping, at least temporarily, the distribution of the products. Of course, OMP denies any anti-competitive conduct in the matter, and says it will vigorously defend the suit.
The demand for anti-aging skin care solutions has increased over the last decade as baby-boomers have taken advantage of advances in skin care science. In fact, between 2006 and 2008, U.S. sales alone rose 13% to 1.6 billion dollars, and the trend shows no sign of weakening.