When a buyer asks for your most sensitive information during diligence, the NDA feels like protection. Olaplex’s experience with L’Oréal shows how thin that protection can be.
What happened
Olaplex and L’Oréal entered acquisition discussions and signed an NDA. Under it, Olaplex shared confidential information, including what it considered trade secrets. L’Oréal then walked away from the deal and launched competing products in the same category.
Olaplex sued. In 2019 a Delaware jury sided with Olaplex, and the trial court entered a judgment of about $66 million. It looked like a real win.
In 2021, the Federal Circuit reversed the trade secret and breach-of-contract findings. Olaplex hadn’t proven that its information was actually secret: much of the key material was already public in earlier patents and published applications, and what it did claim as secret wasn’t defined with enough precision.
Three lessons
Stage your diligence: Use a clean room or a clean team, including outside consultants, so the most sensitive information never reaches the operating people inside the buyer. Those are the people who would build the competing product.
Don’t count on litigation to make you whole: Proving IP theft after the fact is slow, expensive and uncertain, even when a jury agrees with you.
Define your trade secrets before they leave the building: If you want to protect something, identify it with particularity before you share it, and make sure it is genuinely not public.
When sellers win
Two other cases show the other side, and what winning actually takes.
In TAOS v. Intersil, the companies explored a merger in 2004 under a confidentiality agreement, and Intersil later released sensors using the design TAOS had disclosed. TAOS won on trade secret liability, but the case ran from 2008 until an agreed final judgment of about $51.8 million in 2025. Along the way, the Federal Circuit held that Intersil could use TAOS’s financial information for its own “build versus buy” analysis, because the agreement permitted evaluating the deal. Read your permitted-use clause with that in mind.
In Propel Fuels v. Phillips 66, Phillips 66 ran diligence on Propel in 2017 under an NDA, walked away in 2018 and launched its own competing business. In 2024 a California jury found the misappropriation willful and malicious and awarded $604.9 million. In 2025 the court added $195 million in exemplary damages, an amount it tied to three times the purchase price Phillips 66 had offered. The court noted that Phillips 66 knew it could have used a clean team and didn’t, and Propel’s data was still hard-coded in Phillips’s own financial models.
The difference
What separates a judgment that survives from one that gets reversed is discipline before the information is shared: staging what you disclose, to whom and when, and defining exactly what you’re protecting. A clean team costs far less than a lawsuit.
Ahmed Hasan is the founder and CEO of Venture Bridge Law, a corporate and M&A boutique. This article is general information, not legal advice.