The U.S. Supreme Court has handed down a dramatic decision that may shake up the landscape of trade secret litigation. On Monday, the high court declined to intervene in a fierce battle between two nail polish companies, GeLab Cosmetics and Zhuhai Aobo Cosmetics. The ruling effectively allows the Seventh Circuit’s decision to stand, halting GeLab’s trade secrets case against its rival while an ownership dispute over the business is resolved in New Jersey state court.
A Legal Tangle Stretched Across Courts
At the heart of this dispute lies a nail gel formula — not just any beauty product, but a top-performing proprietary blend that could change the game in the cosmetics industry. GeLab, a company founded in 2016 by Xingwang Chen and Shijian Li, filed a federal lawsuit in Illinois in 2022, accusing China-based Zhuhai Aobo Cosmetics and its affiliates of masterminding a scheme to steal its coveted trade secrets. But a separate legal drama was already unfolding in New Jersey state court, one that involves a crucial question: who truly owns the company?
