Balmuccino LLC v. Starbucks Corporation

On October 21, 2022, Balmuccino, LLC (“Plaintiff”), represented by Joel B. Ard of ARD Law Group PLLC, filed a contract lawsuit against Starbucks Corporation (“Defendant”), seeking damages with restitution for alleged breach of contract by, amongst other things, releasing coffee-flavored lip balms in 2019 without Plaintiff’s consent and without compensating Plaintiff. This case was filed in the U.S. District Court for the Western District of Washington. 

In the complaint, the plaintiff stated, “Beginning in approximately 2016, Plaintiff, through its managing members, began developing a line of coffee-flavored lip balms.”

The plaintiff further stated, “In late 2017, including a meeting on October 19, 2017, Plaintiff spoke to and met with Defendant’s agents to discuss a joint venture associated with the production of the coffee-flavored lip balms developed by Plaintiff. During these conversations and meetings, it was understood and otherwise implied that if Defendant utilized Plaintiff’s ideas and concepts associated with the coffee-flavored lip balms, that Plaintiff would be duly compensated and given proper credit.”

The plaintiff also stated, “With the disclosed intent of creating a joint venture to manufacture and sell a line of coffee-flavor lip balms, Plaintiff provided to Defendant substantial and secret information associated with this line of coffee-flavored lips balms, including a pitch deck, fully realized prototypes, identification of suppliers and materials, explanations of the results of research and development efforts, trial and error results, marketing ideas, market data, all for the Plaintiff’s product line.”

The plaintiff then alleged, “Rather than use this information for its intended purpose – i.e. to assess the potential joint venture or to actually begin working towards the manufacturing of the coffee-flavored lip balms with just compensation to Plaintiff – Defendant improperly used this information to manufacture its own line of coffee-flavored lip balms in approximately 2019 without compensating Plaintiff.”

Plaintiff further alleged, “Defendant was aware of its obligation to limit the use of Plaintiff’s ideas and work product to only evaluate Plaintiff’s ideas or to otherwise develop those ideas as a joint venture and with just compensation to Plaintiff. The fact that Defendant intentionally used Plaintiff’s ideas and work product to its own pecuniary advantage in developing and distributing for use its own branded lip balms in 2019 constitutes a breach of the confidential relationship between Plaintiff and Defendant.”

Plaintiff also alleged, “In other words, Defendant effectively stole Plaintiff’s product and has begun the manufacturing and sale of that product without compensating Plaintiff. Plaintiff had delivered a fully realized product concept to Defendant in a branded, pocketable lip balm delivery mechanism, along with fully formulated samples that smelled and tasted like the flavors of Defendant’s beverages. Subsequent to that meeting, Defendant improperly misappropriated this confidential information it obtained.”

The plaintiff presented four claims for relief, including alleged breach of implied-in-fact contract, breach of oral contract, breach of confidence, and trade secret misappropriation.

In the prayer for relief, Plaintiff requested an award of general, special, and punitive damages; damages for loss of past, present, and future economic losses; reasonable royalty and/or disgorgement of unjustly earned monies for Defendant’s trade secret misappropriation; and pre- and post-judgment interest.

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