Skin care guru Zein Obagi, M.D., served the company he founded, Obagi Medical Products Inc., with an unfair competition lawsuit last week alleging it had interfered with the sale of his new product line.
This story first appeared in the January 13, 2010 issue of WWD. Subscribe Today.
Obagi sold a controlling stake in OMP to outside investors in 1997. According to a complaint filed Jan. 7 in Los Angeles County Superior Court by Obagi’s new venture, ZO Skin Health Inc., the doctor recently developed a nonprescription line of products. OMP declined to pursue the new products so ZO marketed and distributed the direct-to-consumer line itself. It is now carried by Nordstrom and the Vdara Hotel and Spa, among other outlets, according to the complaint.
In the suit, Obagi accuses his former company of attempting to stop the development of his new line by feigning interest in it then declining to follow through.
“Upon information and belief, and as its subsequent actions show, OMP never had any intention of actually working with ZO but instead played a continuous game of bait, switch and delay,” ZO’s attorneys wrote.
He also alleged that late last year, he met with a Japanese firm that intended to buy ZO, but that OMP killed the deal by threatening to sue for violation of a noncompete clause.
OMP said it was reviewing the complaint and “intends to vigorously defend itself against these claims.”
ZO said in court documents that it had initiated arbitration proceedings against OMP. In its civil action, the company is seeking unspecified damages and legal fees.