Starbucks beats trade

Nov 09, 2023

Customers pass by the logo of an American coffee company Starbucks inside a coffee shop in Rio de Janeiro, Brazil August 15, 2018. REUTERS/Pilar Olivares

(Reuters) - Starbucks (SBUX.O) has defeated a lawsuit by a company whose leaders include a relative of TV doctor Mehmet Oz that accused the coffee chain of stealing its trade secrets to create "S'mores Frappuccino" lip gloss.

U.S. District Judge John Chun in Seattle said on Wednesday that Balmuccino LLC waited too long to sue over the allegations, marking the second time a court has dismissed the case on procedural grounds.

Balmuccino attorney Eduardo Martorell said in a statement on Thursday that the company will appeal the ruling and refile the case in New York. He said Balmuccino "won't stop fighting until the courts allow it to be heard on the merits rather than allowing Starbucks to avoid having to answer for its actions based on procedural technicalities."

Representatives for Starbucks did not immediately respond to a request for comment on the decision on Thursday.

Balmuccino said it began developing a line of coffee-flavored lip balms in 2016. The company's lawsuit said its representatives met with Starbucks' head of product development in 2017 about a potential partnership.

The complaint said the meeting was set up by Starbucks CEO Howard Schultz and former Republican U.S. Senate candidate Mehmet Oz, whose sister-in-law is one of Balmuccino's managing members.

According to the lawsuit, Balmuccino gave Starbucks prototypes of its lip balms, supplier details and other confidential information at the meeting.

Starbucks in 2019 launched its "S'mores Frappuccino Sip Kit," a series of coffee-scented lipsticks and glosses celebrating the return of its drink of the same name.

Balmuccino sued Starbucks in California state court later that year. It filed a new complaint in Seattle federal court last October after the California court said it lacked jurisdiction over the coffee chain.

Chun said on Wednesday that Balmuccino failed to bring the lawsuit within Washington state law's three-year statute of limitations period, which began at the latest when the company learned of Starbucks' launch in April 2019.

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: Pallavi Wahi, Christopher Wyant and Shelby Stoner of K&L Gates

Read more:

Starbucks sued again over Frappucino lip-gloss trade secrets

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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