It goes on forever – but here’s the introduction
Before Kylie Jenner’s namesake cosmetics brand got its start, and long before Kim Kardashian began offering up beauty products of her own under the soon-to-be-rebranded KKW name, the eldest three sisters in the reality television family embarked on a beauty venture. Together with licensing company Boldface Licensing + Branding, Kourtney, Kim, and Khloe Kardashian launched Khroma Beauty in 2012, only to become embroiled in a number of lawsuits over the name, ultimately, culminating in a rebrand to Kardashian Beauty.
In exchange for “an advance of $1 million plus an 8 to 10 percent royalty on the wholesale price of products (sales royalty) or, alternatively, guaranteed minimum royalty payments for various contract periods and an optional renewal period for a total of $5,206,900,” the Kardashians granted Boldface the right to use their “trademarks, images, and likenesses for the development, manufacture, production, distribution, advertisement, promotion and sale of specified cosmetic products” under the Kardashian Beauty moniker. While Kardashian Beauty has been defunct for years, the Kardashian sisters have, nonetheless, been embroiled in a legal battle over it since March 2016 when their amusingly-named corporate entities Kimsaprincess Inc., 2Die4Kourt and Khlomoney Inc. were named in a lawsuit filed by Hillair Capital Management.
In the complaint that it filed in the spring of 2016, Hillair Capital – the company that purchased the Kardashian Beauty assets and assumed the rights to the licensing deal from Boldface in 2014, after Boldface (which sued the sisters in a separate case) ran into financial trouble – set out claims of breach of contract, breach of the implied covenant of good faith and fair dealing, promissory fraud and declaratory relief, and argued that, among other things, the famous sisters failed to live up to their end of the contract, which required them to serve as the faces of the brand and promote it for the duration of the 5-year-long licensing deal that they entered into with Boldface.
Seeking $180 million in damages, Hillair asserted that almost immediately after it “agreed to put up millions of dollars to help the Kardashians salvage their struggling Kardashian Beauty makeup line” by buying out Boldface, the sisters simply stopped living up to their end of the bargain. “Almost immediately” after the ink on the deal was dry, Hillair claimed that Kourtney, Kim, and Khloe “stopped marketing, promoting and supporting the line, and began courting new potential investors to buy out Hillair’s stake.”
Lawyers for the Kardashians denied the allegations set out by Hillair, calling the suit “an obvious attempt to create leverage by hedge fund operators, who took over the Kardashians’ cosmetics brand.” More than that, they also successfully sought to usher Hillair’s case into arbitration, as the licensing agreement and “the mutual releases signed by the parties just prior to the time [that Hillair] acquired Boldface’s assets” all contained arbitration clauses. In connection with their push for arbitration, the Kardashians sought damages in connection with Hillair and its holding company Haven’s alleged failure to pay them millions of dollars in royalties and to indemnify them for the cost of legal counsel in a separate trademark infringement case related to the Kardashian Khroma name.
Read full article https://www.thefashionlaw.com/the-kardashians-land-11-5-million-win-in-long-running-lawsuit-over-their-defunct-brand-kardashian-beauty/
