Gavin Collier, JD, is co-founder and principal of Dynamic Blending Specialists, a global cosmetics manufacturing company.
A couple of months ago, celebrity and influencer Kim Kardashian was served with a trademark infringement lawsuit over the use of the name SKKN by Kim. A small New York esthetician studio claims it’s been selling services under a similar brand name—SKKN+—since 2018. However, Kardashian’s team had no way of knowing that a single retail shop was using a similar name because SKKN+ hadn’t filed a trademark yet. (It didn’t even have a website.)
SKKN isn’t the only cosmetics brand dealing with lawsuits in recent months. L’Oreal, Target and Bare Minerals are all battling class action suits with claims surrounding the ingredients they use, like isopropyl cloprostenate and polyfluoroalkyl substances. While some of the chemicals consumers worry about are harmless, if brands fail to disclose ingredients in their products or packaging, they can be held liable for fraud.
Even if these brands come out legally unscathed, the money and time put toward legal fees and the PR battles are real consequences of doing business in a crowded field where brands rely heavily on name and image to sell products.
3 Important Legal Protections For Cosmetics Brands
As both a practicing attorney and a partner in a contract manufacturing facility, I’m constantly amazed at the number of businesses ready to push their products to market without some basic legal protections in place. A little extra effort upfront goes a long way in setting up a cosmetic line for success.
With that in mind, let’s look at several things brands can do to avoid messy confrontations in the courthouse.
1. Contracts and Quality Agreements
Even today, many small and mid-sized companies are jumping into business without binding contracts. However, a signed contract is the only way to guarantee that everyone involved holds up their end of the bargain. Brands should have legal agreements with vendors, designers, manufacturers, formulators, suppliers and anyone else they do business with. If, for some reason, you do end up facing a lawsuit, a contract is your best legal proof of the obligations you and your partners agreed to initially.
It’s the goal of every attorney to mitigate damages, assign liability and define the relationship, responsibilities and obligations of the involved parties. Two primary agreements, in addition to general terms and conditions, are the manufacturing agreement and the quality agreement. The latter in particular assigns responsibility in the event that a process is not followed. Additionally, it contains reporting requirements, insurance requirements and a process to determine liability, given the respective responsibilities assigned to the brand and the manufacturing facility.
If these agreements aren’t in place, you may get to go to court and waste money in litigation because you’re dealing with judges and jurors who likely know absolutely nothing about your industry. It will then be your responsibility to hire enough experts to help them understand the industry so they can make a proper judgment.
Starting a cosmetics line requires a lot of capital up front. You need to research and develop safe products that work. You have to source quality ingredients, create and package the products, design a brand around your niche and then market and distribute it to your audience.
Trademarking your brand is a fairly straightforward, inexpensive process—companies pay a $250 filing fee—that can save millions of dollars in the long run. Thus, it would be crazy not to protect that kind of investment through the proper channels. In the United States, it’s through the Patent and Trademark Office. Through this government entity’s online portal, you fill out an application that asks for the details of your product or trademark. Details may include ingredients, style or other information that makes it unique.
The trademark process is also where you can ensure your brand name and logo aren’t already taken by another business. If you fail to check before purchasing a web domain and printing business cards, for example, you might find yourself with a costly rebrand on your hands. So, while not necessary, for something this important, it makes sense to hire a legal team so every detail is accounted for.
3. Expert Help
Entrepreneurs are often working on a shoestring budget, so it makes sense to cut expenses wherever possible. This can include the kind of external help they pursue. However, not everything is in the business owner’s wheelhouse. After all, they wouldn’t try to work out products’ chemical formulas on their own. Taking on legal and regulatory responsibilities without expert help is just as big of a mistake.
Business owners should surround themselves with people who know the beauty industry inside and out, and then listen when those experts say that some things aren’t advisable. Numerous experts are involved in successfully manufacturing a comestics product. Companies often work with regulatory consultants; attorneys with industry experience; scientists who can verify data and processing requirements; and quality representatives. A good starting point may be reaching out to an FDA regulatory consulting group, as it will have the contacts you need.
In the excitement of starting a new business, legal steps can seem complicated, expensive and unimportant. But entrepreneurs who forget about contracts, gloss over trademark rules and either go without or ignore the counsel of experts on their team may live to regret it. By covering these bases, your cosmetics brand is better set up for legal success.