Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 1 of 28 PageID #:1
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`GeLab Cosmetics LLC,
`
`Plaintiff,
`
`CASE NO.
`
`Jury Demand
`
`v.
`
`Zhuhai Aobo Cosmetics Co., Ltd,
`Zhuhai Shengjier Cosmetics Co., Ltd,
`Zhuhai Zhengjia Trading Co., Ltd,
`Pingjun Li,
`Ximei Peng and,
`Benhong Li,
`
`Defendants.
`
`COMPLAINT
`
`Plaintiffs GeLab Cosmetics LLC (“GeLab” or “Plaintiff”) alleges as follows against Defendants
`
`Zhuhai Aobo Cosmetices Co., Ltd(“Aobo”), Zhuhai Shengjier Cosmetics Co., Ltd(“Shengjier”),
`
`Zhuhai Zhengjia Trading Co., Ltd(“Zhengjia”), Pingjun Li(“Pingjun” or “Mr. Li”), Ximei Peng
`
`(“Ximei” and “Ms. Peng”)and Benhong Li(“Benhong” or “Ms. Li”). (collectively, “Defendants”).
`
`INTRODUCTION
`
`1.
`
`This case arises out of Defendants’ long-running scheme to use their privileged access to
`
`GeLab’s top-performing proprietary nail gel and associated confidential information to create knock-
`
`off products in order to compete directly with GeLab in violation of express contractual promises and
`
`other legal obligations. See. Exhibit A.
`
`2.
`
`GeLab is a cosmetic company that develops, designs, manufactures, and markets innovative
`
`nail gel products. GeLab has spent substantial sums and almost 4 years developing its nail gel into
`
`the cutting-edge, distinguished product it is today, implementing a host of key innovations and
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`technologies that distinguish GeLab’s product from other nail gel on the market.
`
`

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`3.
`
`In July 2020, GeLab and Aobo, a cosmetic product manufacture & supplier, signed a
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`Purchase Agreement (“PA”). Among the PA, there are several confidential clauses. In essence, the
`
`agreement created a trial relationship between GeLab and Aobo during which GeLab would provide
`
`its innovative color designs and associated confidential information to Aobo and Aobo would
`
`manufacture the nail gel product per GeLab’s specific requirements.
`
`4.
`
`In exchange for the opportunity to make money being GeLab’s supplier, Aobo agreed to
`
`numerous, clear, material contractual terms restricting its use and disclosure of GeLab’s nail gel
`
`product and associated confidential information. By agreeing to these terms, Aobo promised not to
`
`use or permit anyone else to use GeLab’s proprietary work or information against GeLab’s interests,
`
`including by making a derivative product to compete with GeLab.
`
`5.
`
`Eager
`
`to tap into the nail gel market developed by GeLab,
`
`the shareholder/legal
`
`representative of Aobo, Mr. Pingjun Li, conspiring with his wife, Ximei Peng, and his daughter,
`
`Benhong Li, embarked on an unlawful plot
`
`to surreptitiously take GeLab’s confidential and
`
`proprietary trade secrets, and use those trade secrets to manufacture and sell competing products.
`
`Rather than design their own products to compete fairly in the marketplace, Defendants instead
`
`misappropriated GeLab’s proprietary technologies, critical business strategies and sensitive sales
`
`statistics and other highly valuable confidential GeLab information.
`
`6.
`
`Defendants’ stealing of the GeLab’s trade secret is not limited to the Aobo’s role as GeLab’s
`
`supplier. Defendant Mr. Li actually sent his daughter Ms. Li to GeLab’s company, working as an
`
`non-paid intern. Ms. Li did not disclose to GeLab that she owns a company called Zhuhai Zhengjia
`
`Trading Co., Ltd, one of the Defendant. Defendants not only had access to GeLab’s trade secret
`
`regarding product manufacturing, by working at GeLab, Defendant Ms. Li gained access to GeLab’s
`
`on-line marketing operation.
`
`

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`7.
`
`During GeLab and Aobo’s cooperation, GeLab trusted Aobo with GeLab’s confidential
`
`information on highly sensitive and proprietary designs, data, statistics and products. Aobo and Mr.
`
`Li was privy to GeLab’s proprietary technical documents, design ideas, product testing data, product
`
`planning, cost management, product packaging, research and development efforts, and marketing
`
`data.
`
`8.
`
`Defendants unlawfully accessed and acquired GeLab’s trade secret information to develop,
`
`improve, test, and supply their own nail gel products sold and to be sold in the United States.
`
`Defendants used the trade secret taken from GeLab to design and test similar products using the same
`
`components supplied by the same supplier for GeLab.
`
`9.
`
`GeLab employs extensive protective measures to safeguard its trade secrets. For instance, the
`
`design idea can only be accessed by authorized personnel; the intended color combination can only
`
`be accessed by authorized personnel; the sales data can only be accessed by store operators using
`
`password; supply chain information is controlled by personnel from Production Material Control
`
`position.
`
`10.
`
`GeLab only realized Defendants’ egregiously conduct when GeLab found that three different
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`Amazon stores were selling nail gel products that were substantially identical as GeLab’s nail gel
`
`products. A side-by-side comparison of the products was enough to prove that Aobo had breached its
`
`contractual promises and legal obligations owed to GeLab in manufacturing nail gel. For example:
`
`a. Defendant Aobo which is owned and controlled by Defendant Pingjun Li, selling nail gel
`
`through Amazon store “ab gel.”
`
`

`

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`Ab gel
`Link
`(Aobo)
`Screenshot
`
`https://www.amazon.com/Polish-Upgrade-Collection-Natural-
`Manicure/dp/B08PJZSTRM/ref=sr_1_3?m=AL2665BWQPPD8&marketplaceID
`=ATVPDKIKX0DER&qid=1661417312&s=merchant-items&sr=1-3&th=1
`
`GeLab
`Link
`Screenshot
`
`https://www.amazon.com/dp/B07W5Z6NG9
`
`

`

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`b. Defendant Shengjier, which is owned and controlled by Defendant Ximei Peng, selling nail
`
`gel through Amazon store “PEWETE.”
`
`PEWETE
`Link
`(Shengjier)
`Screenshot
`
`https://www.amazon.com/PEWETE-Glitter-Sparkle-Valentines-
`Girlfriend/dp/B086WKZ24Q?ref_=ast_sto_dp&th=1
`
`GeLab
`Link
`Screenshot
`
`http://www.amazon.com/dp/B07SZSGRWW?ref=myi_title_dp
`
`

`

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`c. Defendant Zhengjia, which is owned and controlled by Defendant Benhong Li, selling nail
`
`gel through Amazon store “ZUCCIE.”
`
`ZUCCIE
`Link
`(Zhengjia)
`Screenshot
`
`https://www.amazon.com/ZUCCIE-Polish-Glossy-Matte-
`Seasons/dp/B08ZJ3NKKC/ref=sr_1_11?keywords=ZUCCIE&qid=1661410766&sr
`=8-11
`
`GeLab
`Link
`
`https://www.amazon.com/Beetles-Gel-Polish-Kaleidoscope-
`Collection/dp/B083XW78GH/ref=sr_1_4?crid=1VRNYNICRRYVF&keywords=be
`ttles.+gel+nail+polish+spring&qid=1661411476&sprefix=bettles.+gel+nail+polish+
`%2Caps%2C487&sr=8-4
`
`Screenshot
`
`

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`11.
`
`Today, Defendants are aggressively marketing nail polish product in direct competition with
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`GeLab, causing substantial damage to GeLab including irreparable harm for which it has no adequate
`
`remedy at law. Defendants did not even attempt to compete fairly. Rather than spend years to
`
`innovate and design their own color combination, it instead took a shortcut by stealing GeLab’s trade
`
`secrets in order to misuse GeLab’s proprietary innovations. Such conduct renders investments in
`
`costly research and development pointless, and harms American businesses and the economy in
`
`critical ways. Unless halted immediately, Defendants’ illegal actions will serve as a roadmap for
`
`other companies who have not invested in their own research and development to steal the trade
`
`secrets of their competitors, and violate the intellectual property rights of the true innovators and
`
`market leaders.
`
`12.
`
`Defendants’ brazen misappropriation and theft of trade secrets leaves GeLab no choice but to
`
`file this lawsuit, seeking immediate injunctive relief and recovery of damages for the harm that has
`
`been caused by Defendants’ illegal conduct.
`
`THE PARTIES
`
`13.
`
`Plaintiff GeLab is a New Jersey limited liability company having its principal place of
`
`business at 255 Old New Brunswick Rd, Piscataway, NJ 08854.
`
`14.
`
`Defendant Zhuhai Aobo Cosmetics Co., Ltd, d/b/a Zhuhai Abgel Cosmetics Co., Ltd, is an
`
`entity incorporated in Zhuhai, China, with the business address: 2nd Floor, Workshop A2, No. 6,
`
`6th Road, Xinqing Technology Industry Park, Doumen District, Zhuhai, Guangdong, 519100,
`
`China.
`
`15.
`
`Defendant Shengjier Cosmetics Co., Ltd, is an entity incorporated in Zhuhai, China, with
`
`the business address: 2nd Floor, Workshop A3, No. 6, 6th Road, Xinqing Technology Industry
`
`Park, Doumen District, Zhuhai, Guangdong, 519100, China.
`
`

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`16.
`
`Defendant Zhengjia Cosmetics Co., Ltd, is an entity incorporated in Zhuhai, China, with
`
`the business address: No. 66 Fengsheng Garden, Nanping 12 Village, Xiangzhou District, Zhuhai,
`
`Guangdong, 519060, China.
`
`17.
`
`Defendant Pingjun Li is the legal representative of Defendant Aobo, the residential address is
`
`unknown. However, Pingjun Li can be contacted through Defendant Aobo’s business address.
`
`18.
`
`Defendant Ximei Peng is the legal representative of Defendant Shengjier, the residential
`
`address is unknown. However, Ximei Peng can be contacted through Defendant Aobo’s business
`
`address.
`
`19.
`
`Defendant Benhong Li is the legal representative of Defendant Zhengjia, the residential
`
`address is unknown. However, Benhong Li can be contacted through Defendant Aobo’s business
`
`address.
`
`Defendant Pingjun Li is Defendant Ximei Peng’s husband, and Defendant Benhong Li’s
`
`20.
`
`father.
`
`JURISDICTION AND VENUE
`
`21.
`
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 2201, 2202, and
`
`the trade secret laws of the United States, 18 U.S.C. §§ 1836 and 1839. This Court also has
`
`supplemental jurisdiction over the asserted state law claims pursuant to 28 U.S.C. § 1367(a)
`
`because the federal and state law claims derive from a common nucleus of operative facts. This
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`Court further has jurisdiction over the asserted state law claims pursuant to 28 U.S.C. § 1332
`
`because there is complete diversity of citizenship among the parties and an amount
`
`in
`
`controversy in excess of $75,000.
`
`22.
`
`This Court has personal jurisdiction over Defendants. Personal jurisdiction exists because
`
`they have sufficient minimum contacts with the Northern District of Illinois as a result of
`
`

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`intentional contacts with this District and Defendants’ illegal acts that have and continue to
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`inflict injury on GeLab in this District.
`
`23.
`
`Venue is proper in this Court pursuant to 28 U.S.C. § 1391, and this Court may properly
`
`exercise personal jurisdiction over Defendants since the Defendant directly targets business
`
`activities toward consumers in the United States, including Illinois, through at least the fully
`
`interactive e-commerce Amazon stores. Specifically, Defendants have targeted sales to Illinois
`
`residents by setting up and operating e-commerce stores that target United States consumers
`
`using Defendants’ Amazon Stores, offer shipping to the United States, including Illinois, accept
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`payment in U.S. dollars and, on information and belief, have sold products using Plaintiff’s trade
`
`secret to residents of Illinois. Defendant is committing tortious acts in Illinois, is engaging in
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`interstate commerce, and has wrongfully caused Plaintiff substantial injury in the State of Illinois.
`
`BACKGROUND
`
`GeLab And Its Top Performing nail gel
`
`GeLab is a cosmetic company that designs, develops, manufactures, and markets
`
`A.
`
`24.
`
`cosmetic products for consumers in United States. GeLab offers a comprehensive portfolio of
`
`products focused on nail gel.
`
`25.
`
`GeLab products have become enormously popular and even iconic, driven by the brand’s
`
`arduous quality standards and innovative design. Among the purchasing public, GeLab products
`
`are instantly recognizable as such. GeLab products has become a global success that resonates
`
`with females worldwide, and they are among the most recognizable in the United States. GeLab
`
`products are distributed and sold to consumers through online marketplace throughout the United
`
`States, including Illinois.
`
`26.
`
`Some of the GeLab’s famous products are:
`
`

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`https://www.amazon.com/stores/beetlesGelPolish/page/F1248520-F4CF-431E-AF83-
`
`7960D1FAD030?ref_=ast_bln
`
`27.
`
`GeLab invested substantial sums over almost five years in researching, designing,
`
`developing, and testing GeLab nail gel before pushing the product into the market. GeLab has
`
`continued to invest its time and money in its nail gel, dedicating its specialists at any given time
`
`to making improvements to nail gel’s quality, design, and function.
`
`28.
`
`GeLab owns several trade secret. One of GeLab’s trade secret is its unique way to choose
`
`color. After intense research and analysis, GeLab will create a “concept” of color that is unique
`
`to the market. Then GeLab, with the help of its manufacture, will decide the exact color or colors
`
`of its product. Another GeLab’s trade secret is its supply chains, which provide GeLab a reliable
`
`and competitive advantage compared to its competitors. GeLab’s sales data is also a vital trade
`
`

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`secret. GeLab can allocate production capacity to best-selling products, reduce the production
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`capacity of unsalable products, thereby reducing operating expenses and avoiding waste.
`
`29.
`
`The market has rewarded GeLab’s hard work and innovations. To date, GeLab has sold
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`over nearly 20 Millions nail gels, making GeLab top-performing nail gel on the market.
`
`B.
`
`30.
`
`GeLab Appoints Aobo To Serve As Its Manufacture
`
`In July 2020, GeLab and Aobo signed a Purchase Agreement. In this PA, Section 7
`
`stipulated Parties’ confidentiality obligations (“Confidentiality Clause”). The purpose of this
`
`Section 7 was to facilitate the parties’ business arrangement by ensuring the protection of each
`
`party’s confidential information, including trade secrets, disclosed within the relationship. The
`
`Confidentiality Clause put numerous rules in place limiting the parties’ use and dissemination of
`
`such information. For example, the clause provided that GeLab’s confidential information could
`
`be used only with the written permission of GeLab.
`
`31.
`
`By signing the Purchase Agreement, Aobo promised and agreed:
`
`a.
`
`In order to ensure the sustainable development of both parties, Aobo must ensure that
`
`the price of GeLab's products has sustainable market competitiveness.
`
`b. All products provided by Aobo to GeLab are brand new, technologically advanced and
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`of good quality, which shall conform to relevant national and industrial quality
`
`standards, with stable and reliable performance and complete quantity.
`
`c. Both parties confirm that all documents, data, materials or other information obtained
`
`from the other party due to this contract, whether technical or commercial, shall be
`
`treated as confidential
`
`information and kept confidential
`
`indefinitely. The above
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`confidential information can only be used for the specific purpose of this contract,
`
`otherwise the disclosing party shall compensate the other party for all losses arising
`
`

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`therefrom. Aobo must ensure that
`
`it will not disclose GeLab's business secrets
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`(including but not limited to the specifications, color combinations, packaging and
`
`typesetting, sales, demand and other contents of all products of GeLab). If Aobo
`
`discloses, GeLab reserves the unlimited right of accountability to Aobo.
`
`d. Aobo and its affiliated enterprises that have access to this confidential information and
`
`their respective shareholders, directors, supervisors, employees, agents, contractors and
`
`consultants shall abide by this confidentiality clause, and shall not disclose the
`
`confidential information under this agreement or use it for any purpose outside the
`
`scope of this agreement without the written permission of GeLab. If the personnel
`
`involved in the project violate the agreement, Aobo shall bear joint and several
`
`liabilities.
`
`e. Aobo or its affiliated enterprises contacting the confidential
`
`information and their
`
`respective directors, officers, employees, agents, contractors and consultants shall not
`
`apply for or instigate a third party to apply for patents, designs, industrial designs,
`
`trademarks, copyrights and other intellectual property rights related to the confidential
`
`information under this Agreement in any form.
`
`f. Aobo shall not transfer, duplicate, copy, disclose, publish or transfer all or any part of
`
`the documents and other materials (including all copies of such documents and materials)
`
`containing any confidential information of GeLab to any third party.
`
`g. Unless otherwise expressly agreed in this Agreement or agreed by GeLab in writing,
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`Aobo shall strictly keep confidential the confidential information and shall not directly
`
`or indirectly cause, permit or allow to disclose, publish, transfer, misappropriate or
`
`disclose the confidential information to any person or entity.
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`

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`h. All confidential information and relevant intellectual property information under this
`
`Agreement are owned by GeLab or legally authorized to be used. Without GeLab's
`
`written consent, Aobo shall not use such information in any form beyond the scope of
`
`this Agreement or authorize it to be used by a third party.
`
`i.
`
`The disclosure of secrets by either party's staff or the employing institution shall be
`
`deemed as the disclosure of secrets by that party, and shall bear corresponding liabilities
`
`for breach of contract and compensation. No matter whether this contract is invalid,
`
`rescinded or terminated,
`
`the confidentiality obligations under this clause shall not
`
`become invalid.
`
`GeLab Made Bulk Purchase From Aobo As Its Manufacture And Supplier Under
`C.
`The Purchase Agreement.
`
`32. With the parties’ Agreement in place and GeLab’s rights and interest secured, GeLab
`
`began delivering confidential information to Aobo. GeLab fully performed all of its obligations
`
`under the Agreements and supported Aobo’s efforts to meet production requirement, including
`
`by making timely delivery of
`
`raw materials, by providing Aobo with ancillary equipment, by
`
`training Aobo personnel on how to tint nail gel color.
`
`33.
`
`GeLab provided Aobo with highly-sensitive confidential information, including trade
`
`secrets, during this time. As just one example, GeLab provided Aobo with confidential
`
`marketing information it had put together over many years showing the most popular products
`
`among customers. Early in its marketing and sale of nail gel, GeLab manufactured nail gel in
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`many degrees or shades of color because it did not know which degrees or shades would prove
`
`most in demand. Only over time was GeLab able to compile data on color in order to direct its
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`manufacturing decisions to a narrow degrees or shades that proved the most popular. Developing
`
`this confidential data required a significant investment on GeLab’s part but gave GeLab an
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`

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`advantage in the market. By receiving this confidential
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`information from GeLab as its
`
`manufacture, Aobo now has that advantage as well without having to do any of the work GeLab
`
`performed.
`
`34.
`
`Serving as GeLab’s manufacture also gave Aobo confidential access to color design
`
`procedures involving the development of nail gel color. By observing GeLab’s procedures up
`
`close--which is a privilege that only GeLab’s duly authorized personnel are given--Aobo’s
`
`employees were able to learn how a new set of nail gel is designed and developed in practice,
`
`again giving Aobo a market advantage it would not have had absent its privileged position as
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`GeLab’s sales representative.
`
`35.
`
`GeLab believed at
`
`the time that a long-term relationship with Aobo would prove
`
`mutually-beneficial as Aobo purportedly intended.
`
`D.
`
`36.
`
`GeLab Discovers Defendants’ Scheme To Sabotage And Compete With GeLab
`
`GeLab gradually discovered three Amazon stores that sold nail gel products that almost
`
`identical to GeLab’s nail gel.
`
`37.
`
`The three Amazon stores are Ab gel, which is controlled by Aobo, PEWETE, which is
`
`controlled by Shenjier, and ZUCCIE, which is controlled by Zhengjia.
`
`38.
`
`As discussed before in paragraph 9, a side-by-side comparison shows that Aobo,
`
`Shengjier, and Zhengjia’s products are substantially identical to GeLab’s products--the products
`
`that Aobo had been manufacturing for GeLab for over a year. Aobo, Shengjier and Zhengjia
`
`plainly used GeLab’s confidential information, including trade secrets, to create these stores-in
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`blatant violation of Aobo’s contractual promises to GeLab-as it captures the color choices that
`
`GeLab’s chemists spent years to make.
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`

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`39.
`
`GeLab investigated the situation further, uncovering additional troubling evidence that
`
`Aobo had engaged in a long-running bad-faith campaign, in concert with Shengjier and Zhengjia.
`
`The three companies are closely related, because they are controlled by the same family. They
`
`are all connected to Aobo.
`
`40.
`
`GeLab hired professional company to design its product packaging. The Defendants,
`
`without the consent of GeLab, blatantly plagiarized GeLab’s packaging design.
`
`

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`41.
`
`Not only GeLab’s product packaging became the subject of Defendants’
`
`illegal
`
`plagiarism, Defendants also copied GeLab’s commercial ideas:
`
`

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`42.
`
`To sabotage GeLab’s business further, Aobo used expired raw material to manufacture
`
`GeLab’s nail gel, knowing it will cause GeLab product quality problems. GeLab only knew about
`
`Aobo’s illegal conducts after Chinese government authority issued administrative punishment against
`
`Aobo and fined it 270,000 RMB ($37,912 USD) for its violation.
`
`E.
`
`43.
`
`Defendants Ignore GeLab’s Demand To Cease And Desist.
`
`As of the filing of this Complaint, Defendants are aggressively marketing their nail gel in
`
`direct competition with GeLab. GeLab has demanded that Defendants immediately cease
`
`marketing and selling their nail gel, provide GeLab with all work product associated with
`
`Defendants, and withdraw or refrain from making any products unlawfully derived from
`
`GeLab’s products. Defendants refused to comply.
`
`COUNT I
`DEFEND TRADE SECRETS ACT(18 U.S.C.§1836 et seq.)
`(Against Aobo)
`
`44.
`
`Plaintiff hereby re-alleges and incorporates by reference the allegations set forth in the
`
`preceding paragraphs.
`
`45.
`
`GeLab provided Aobo, in its capacity as a manufacture with confidential and proprietary
`
`information constituting trade secrets including, but not limited to, product pricing lists, highly-
`
`sensitive marketing data, customer’s feedback, know-how and best color-chose practices
`
`developed by GeLab through extensive research and development and the host of fundamental
`
`method underlying GeLab’s design.
`
`46.
`
`47.
`
`GeLab’s trade secrets relate to products that are used in interstate and foreign commerce.
`
`GeLab used reasonable efforts to maintain the confidentiality of these trade secrets,
`
`including by requiring Aobo to sign agreements including confidentiality provisions on the use
`
`and disclosure of GeLab’s confidential information, including trade secrets.
`
`

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`48.
`
`GeLab would not have provided its confidential information, including trade secrets, to
`
`Aobo unless Aobo was engaged to act as GeLab’s manufacture and agreed to the numerous,
`
`clear, material contractual provisions designed to keep GeLab’s confidential information secret.
`
`49.
`
`GeLab derives independent economic value from maintaining the secrecy of its trade
`
`secrets because they are not available through public sources or generally known, and are not
`
`readily ascertainable through proper means by competitors.
`
`50.
`
`Aobo agreed to abide by express contractual provisions designed to keep GeLab’s
`
`confidential information, including trade secrets, confidential.
`
`51.
`
`Aobo knew, or had reason to know, that it had a duty to keep secret and limit the use of
`
`GeLab’s trade secrets, including fiduciary duties.
`
`52.
`
`Aobo breached its duty to maintain the secrecy of and abused its access to GeLab’s trade
`
`secrets, including by disclosing them to its affiliated companies Shengjier and Zhengjia.
`
`53.
`
`Aobo has used and will use GeLab’s trade secrets in developing and marketing the nail
`
`gel products.
`
`54.
`
`55.
`
`Aobo could not have developed the line of nail gel without using GeLab’s trade secrets.
`
`As a direct, proximate result of Aobo’s misconduct, GeLab has been injured and suffered
`
`damages in an amount to be proven at trial.
`
`56.
`
`As a direct, proximate result of Aobo’s misconduct, Aobo has been or will be unjustly
`
`enriched.
`
`57.
`
`Because of Aobo’s misappropriation and use of GeLab’s trade secrets, GeLab faces
`
`irreparable injury. Unless enjoined, Aobo will continue to misappropriate and use GeLab’s trade
`
`secrets.
`
`58.
`
`Aobo’s misconduct is willful and malicious.
`
`

`

`Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 19 of 28 PageID #:19
`
`59.
`
`60.
`
`GeLab is entitled to exemplary damages.
`
`GeLab is entitled to attorneys’ fees.
`
`COUNT II
`ILLINOIS TRADE SECRETS ACT (765 Ill. Comp. Stat. 1065/1 et seq.)
`(Against Aobo)
`
`61.
`
`Plaintiff hereby re-alleges and incorporates by reference the allegations set forth in the
`
`preceding paragraphs.
`
`62.
`
`GeLab provided Aobo, in its capacity as a manufacture with confidential and proprietary
`
`information constituting trade secrets including, but not limited to, product pricing lists, highly-
`
`sensitive marketing data, customer’s feedback, know-how and best color-chose practices
`
`developed by GeLab through extensive research and development and the host of fundamental
`
`method underlying GeLab’s design.
`
`63.
`
`GeLab used reasonable efforts to maintain the confidentiality of these trade secrets,
`
`including by requiring Aobo to sign agreements including confidentiality provisions on the use
`
`and disclosure of GeLab’s confidential information, including trade secrets.
`
`64.
`
`GeLab would not have provided its confidential information, including trade secrets, to
`
`Aobo unless Aobo was engaged to act as GeLab’s manufacture and agreed to the numerous,
`
`clear, material contractual provisions designed to keep GeLab’s confidential information secret.
`
`65.
`
`GeLab derives independent economic value from maintaining the secrecy of its trade
`
`secrets because they are not available through public sources or generally known, and are not
`
`readily ascertainable through proper means by competitors.
`
`66.
`
`Aobo agreed to abide by express contractual provisions designed to keep GeLab’s
`
`confidential information, including trade secrets, confidential.
`
`67.
`
`Aobo knew, or had reason to know, that it had a duty to keep secret and limit the use of
`
`GeLab’s trade secrets, including fiduciary duties.
`
`

`

`Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 20 of 28 PageID #:20
`
`68.
`
`Aobo breached its duty to maintain the secrecy of and abused its access to GeLab’s trade
`
`secrets, including by disclosing them to its affiliated companies Shengjier and Zhengjia.
`
`69.
`
`Aobo has used and will use GeLab’s trade secrets in developing and marketing the nail
`
`gel products.
`
`70.
`
`71.
`
`Aobo could not have developed the line of nail gel without using GeLab’s trade secrets.
`
`As a direct, proximate result of Aobo’s misconduct, GeLab has been injured and suffered
`
`damages in an amount to be proven at trial.
`
`72.
`
`As a direct, proximate result of Aobo’s misconduct, Aobo has been or will be unjustly
`
`enriched.
`
`73.
`
`Because of Aobo’s misappropriation and use of GeLab’s trade secrets, GeLab faces
`
`irreparable injury. Unless enjoined, Aobo will continue to misappropriate and use GeLab’s trade
`
`secrets.
`
`74.
`
`75.
`
`76.
`
`Aobo’s misconduct is willful and malicious.
`
`GeLab is entitled to exemplary damages.
`
`GeLab is entitled to attorneys’ fees.
`
`COUNT III
`CONSTRUCTIVE FRAUD
`(Against Aobo)
`
`77.
`
`Plaintiff hereby re-alleges and incorporates by reference the allegations set forth in the
`
`preceding paragraphs.
`
`78.
`
`79.
`
`Aobo owed GeLab fiduciary duties, including the duty of loyalty.
`
`Aobo owed GeLab fiduciary duties to protect its property rights, including its right to
`
`exclude others.
`
`80.
`
`Aobo breached its fiduciary duties by using or disclosing GeLab’s proprietary
`
`confidential information to develop gel nail and compete with GeLab.
`
`

`

`Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 21 of 28 PageID #:21
`
`81.
`
`Aobo breached its fiduciary duties by knowingly use expired raw materials to
`
`manufacture defective products.
`
`82.
`
`Aobo breached its fiduciary duties by knowingly copy GeLab’s package design and
`
`commercial ideas.
`
`83.
`
`84.
`
`Aobo’s breaches of its fiduciary duties give rise to a presumption of fraud.
`
`Aobo’s breaches of its fiduciary duties were done knowingly and were calculated to
`
`deceive GeLab.
`
`85.
`
`Aobo accepted the fruits of its fraud and breaches, including by leveraging its use and
`
`disclosure of GeLab’s proprietary confidential
`
`information to develop and obtain market
`
`advantage on an accelerated timetable.
`
`86.
`
`87.
`
`Aobo’s breaches of its fiduciary duties constituted constructive fraud against GeLab.
`
`Aobo’s constructive fraud has caused GeLab to suffer damages in an amount to be
`
`proven at trial.
`
`88.
`
`GeLab is entitled to punitive damages on account of Aobo’s constructive fraud.
`
`COUNT IV
`FRAUDULENT CONCEALMENT
`(Against Aobo)
`
`89.
`
`Plaintiff hereby re-alleges and incorporates by reference the allegations set forth in the
`
`preceding paragraphs.
`
`90.
`
`Aobo concealed from GeLab the material fact that it was using GeLab’s proprietary
`
`confidential information for the purpose of developing its and its affiliates’ own product line.
`
`91.
`
`Aobo concealed from GeLab the material fact that it was disclosing GeLab’s proprietary
`
`confidential information to third parties, including Zhengjia and Shengjier.
`
`

`

`Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 22 of 28 PageID #:22
`
`92.
`
`Aobo concealed from GeLab the material fact that it was also manufacturing nail gel for
`
`third parties, including Zhengjia and Shengjier. Aobo could not and will not “ensure that the
`
`price of GeLab's products has sustainable market competitiveness.”
`
`93.
`
`At the time Aobo concealed these material facts, it was acting as GeLab’s fiduciary and
`
`trustee and had a duty to speak the truth to GeLab regarding material facts.
`
`94.
`
`Aobo concealed these material facts with the intent to induce a false belief in GeLab that
`
`Aobo was not using or disclosing GeLab’s proprietary confidential information in any way to
`
`compete with GeLab or harm its interests.
`
`95.
`
`Aobo concealed these material facts also with the intent to induce a false belief in GeLab
`
`that Aobo will ensure that the price of GeLab’s products has sustainable market competitiveness.
`
`96.
`
`GeLab could not have discovered the truth regarding Aobo’s concealed material facts
`
`through a reasonable inquiry or inspection.
`
`97.
`
`GeLab justifiably relied on Aobo’s silence as a representation that Aobo was not using or
`
`disclosing GeLab’s proprietary confidential information in order to compete with GeLab or harm
`
`its interests, consistent with its duties to GeLab as its fiduciary and trustee.
`
`98.
`
`GeLab also justifiably relied on Aobo’s silence as a representation that Aobo was using
`
`quality raw materials and providing GeLab products that have sustainable competitive price,
`
`consistent with its duties to GeLab as its fiduciary and trustee.
`
`99.
`
`Had GeLab been aware that Aobo was using or disclosing its proprietary confidential
`
`information in order to develop its and its affiliates’ own product line and compete with GeLab,
`
`GeLab would not have continued to allow Aobo to possess its information and would have
`
`demanded their immediate return.
`
`

`

`Case: 1:22-cv-05475 Document #: 1 Filed: 10/06/22 Page 23 of 28 PageID #:23
`
`100. Had GeLab been aware that Aobo was developing its and its affiliates’ own product line
`
`and compete with GeLab, GeLab would not have continued to work with Aobo as GeLab’s
`
`supplier and manufacture.
`
`101. GeLab’s reliance on A