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Alticor Defends Artistry Line
ADA — Alticor has found itself in the midst of what could be an extremely costly patent lawsuit concerning its use of alpha-hydroxy acid (AHA) skin care technology by its best-selling Artistry cosmetics line.
On Nov. 10, the $6.4 billion Ada-based direct sale giant filed suit in U.S. District Court in Grand Rapids for declaratory relief against TriStrata Technology Inc. (TTI) and its parent company, The NeoStrata Co. Inc.
TTI first contacted Alticor with an August 2003 letter from legal counsel Mayer, Brown, Rowe & Maw identifying five TTI patents allegedly infringed upon by Artistry's use of AHA in products such as its Alpha Hydroxy Serum Plus, AHA Body Refiner Moisturiser and Moisture Rich Refreshing Toner.
"Based upon Alticor Incorporated's clear interest in using alpha hydroxy acid technology, …" the letter stated, "TTI anticipates that Alticor may be interested in discussing the possibility of a license agreement under TTI's patents."
The founders of The NeoStrata Co., Eugene Van Scott and Ruey Yu, are largely credited with discovering AHA in the early 1970s as researchers at Temple University's Skin & Cancer Hospital. They noticed that certain substances in edible fruits and vegetables, when applied to the skin, promoted the generation of new skin cells to replace the outermost skin layer — reducing skin lines and wrinkles.
The NeoStrata Co. and its subsidiary, TTI, are the worldwide patent holders of the technology, which is today worth hundreds of millions of dollars and incorporated into 40 percent of skin-care products worldwide, according to McGovern Capital, which runs the NeoStrata licensing program.
The company has more than 40 licensees, including cosmetic icons L'Oreal, Chanel,
The victory for TTI was the highlight of the next letter to Alticor, written two years later on
Instead of waiting to join the ranks of TTI's ongoing litigation, Alticor filed its complaint last month.
"They threatened to sue and didn't act on that threat for several months," said James Sobieraj of Brinks Hofer Gilson & Lione, the
Sobieraj noted that Alticor has been making AHA products for more than a decade. Some Artistry offerings predate the patents, the oldest of which was in 1992.
TTI has filed a motion to dismiss Alticor's complaint, and has also filed a corresponding patent infringement suit, along with a motion to move the entire case to
"They perceive that to be a more favorable forum," Sobieraj said.
For TTI, it very well may be. Recently, the company has faced off in
Sobieraj believes Alticor has grounds to keep the lawsuit in
The potential financial impact of an adverse decision is unknown. However, Artistry is one of Alticor's leading revenue streams, and according to a 2003 study of global retail sales by Euromonitor International, is among the world's top five prestige brands of facial skin care and color cosmetics.