Starbucks sued again over Frappucino lip-gloss trade secrets

A worker puts away patio furniture at a Starbucks Corp drive-through location closes down this afternoon for anti-bias training as the coffee chain closed all 8,000 of their company-owned cafes in the U.S. including this location in Oceanside, California
A worker puts away patio furniture at a Starbucks Corp drive-through, California, U,S. May 29, 2018. REUTERS/Mike Blake
  • Starbucks' S'Mores Frappucino allegedly copied from California company
  • Lawsuit cites meeting arranged by Senate candidate Dr. Mehmet Oz

(Reuters) - Starbucks Corp stole a Los Angeles company's confidential information about plans for a coffee-flavored lip balm to create its S'Mores Frappucino lip-gloss kit, according to a lawsuit filed in Seattle federal court.

Balmuccino LLC claims the coffee giant misused its trade secrets after a meeting set up by Starbucks CEO Howard Schultz and current Pennsylvania U.S. Senate candidate Mehmet Oz, whose sister-in-law is one of Balmuccino's managing members.

A version of the Friday lawsuit was originally filed in California state court in 2019. The court dismissed the case in 2020 after finding it lacked jurisdiction.

"We firmly believe these claims to be without merit, and we look forward to presenting our case in court," a spokesperson for Starbucks said Tuesday.

An attorney for Balmuccino declined to comment.

The lawsuit said Balmuccino employees met with Starbucks' head of product development Mesh Gelman in 2017 about a potential partnership. Balmuccino said it gave Gelman prototypes of its lip balms, supplier information, fresearch results and other confidential details.

According to the complaint, Starbucks reached out to one of Balmuccino's suppliers in 2018 to request prototypes for its own lip balms using the same specifications Balmuccino gave Gelman. Starbucks launched its limited-edition "S'Mores Frappucino Sip Kit" of four coffee-flavored lip glosses to celebrate the return of the drink to its menu in 2019.

Starbucks held a sweepstakes with prizes including the lip-gloss kit that year. The drink was reportedly discontinued in 2021.

Balmuccino accused Starbucks of misappropriating its trade secrets and breaching an implied non-disclosure agreement. It asked the court for an unspecified amount of money damages.

The case is Balmuccino LLC v. Starbucks Corp, U.S. District Court for the Western District of Washington, No. 2:22-cv-01501.

For Balmuccino: Eduardo Martorell of Martorell Law; and Joel Ard of Ard Law Group

For Starbucks: attorney information not available

(NOTE: This story has been updated with additional details about Starbucks' lip-gloss promotion.)

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets, for Reuters Legal. He has previously written for Bloomberg Law and Thomson Reuters Practical Law and practiced as an attorney. Contact: 12029385713