Obagi Medical Products (OMP) says it will vigorously defend a lawsuit filed by a competitor alleging that the company has engaged in anti-competitive practices and other wrongful conduct. Beverly Hills based ZO Skin Health, a company founded by Dr. Zein Obagi, filed the lawsuit in Los Angeles County Superior Court seeking an injunction and damages against Obagi Medical. Specifically, the suit alleges that Obagi Medical interfered with the distribution of a new line of anti-aging products developed by ZO.
According to reports, OMP (a company also founded by Dr. Obagi but later sold to outside investors), contacted a would-be e-commerce distributor that was ready to do business with ZO, alleging that it had a valid non-compete agreement with the former owner. The suit alleges that this action interfered with the distribution of the new product line. Regarding the non-compete, ZO maintains that, unlike OMP’s products which are physician prescribed, its new line of anti-aging products are marketed directly to the consumer, thereby avoiding the restrictions of the non-compete agreement. ZO also believes that the non-compete clause is void and unenforceable under California law.
As the demand for anti-aging skin care products has increased over the last decade, so has the competition within that market. Between 2006 and 2008, U.S. sales alone rose 13% to 1.6 billion dollars, and the trend shows no sign of weakening as baby-boomers take advantage of advances in skin care science to address the effects of aging on their appearance. As a person gets older, the process of skin-cell-rejuvenation is slowed. But there’s more to it than the passage of time. Skin health is also affected by a number of other variables, including the environment (sun, wind, pollution), lifestyle (diet and exercise) and genetics. Topical aesthetic and therapeutic skin health systems are specifically designed to address all of these effects, and their growing popularity will only lead to more competition in the marketplace.