Sharp Blades in the (IP) Razor Wars

Why is Gillette so aggressive in defending its turf against competitors? 

Because the global razor industry is worth $11 billion and the margins on the razor business are amazingly healthy: ‘better than printing dollar bills’ (according to Ralph Eckhardt in book ‘The Invisible Edge’). 

The business model: give away the razor, (printer / electric toothbrush / coffee maker) own the consumer and print your own money by selling high margin blades (printer cartridges /toothbrush heads / coffee pods) !
These are businesses with very wide margins, technical, but easy-ish to copy especially when the patents expire; so they build up the other barriers to entry, using IP and especially brand loyalty. 

Entrepreneurs. When former Gillette executives left to set up a competitor they were smothered by litigation from their former company, which slowed but did not shut them down. I suspect Gillette wanted to put Shavelogic out of business before it even got started by claiming the execs had stolen trade secrets and confidential information.

Trade Secret Theft? Gillette filed a complaint against Shavelogic and the former Gillette employees, alleging that they misappropriated Gillette trade secrets and engaged in unfair competition, and that the employees breached their non-disclosure agreements with Gillette.

Rough shaved. Shavelogic argued that this was not a new tactic for Gillette, which had previously filed a lawsuit against Harry’s. In addition to denying all of Gillette’s claims, Shavelogic counterclaimed that Gillette intentionally interfered with Shavelogic’s business relations and engaged in unfair trade practices. Gillette’s suit left Shavelogic without the financial resources it needed to build a business—or defend itself in court.

Litigation funding. Thankfully Shavelogic was able to access litigation funding (from Burford Capital) and ultimately Gillette’s claims were dismissed as without merit. Shavelogic emerged several years later arguably stronger than before. 

Founded in 2009, Shavelogic spent more than 10 years securing over 150 global company patents before launching its SL5 shaving system in 2020. Defying competitor convention, the company is challenging the near $11 billion global razor industry with its focus on technology and performance over a price-driven approach.

IP Financing. The 10 years of battles for this entrepreneurial start-up are beginning to pay off: Sept. 17, 2021 Shavelogic announced that it has raised $100 million in growth capital from Jefferies. Aon's Intellectual Property Solutions played an important role in helping to secure key Collateral Protection Insurance to support the financing. "We are excited to help innovation-driven, IP-rich companies like Shavelogic unlock the value of their IP assets, supporting their growth ambitions and minimizing ownership dilution," said Aon's Intellectual Property Solutions CEO Lewis Lee.

The Shavelogic story is about to take off but it has already had a busy 10 years just getting to market. Intellectual property driven and supported, it looks to have a very ‘sharp-cut’ future ahead ! 

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#AON #Burfordcapital #Jefferies #Shavelogic #IPfinance #litigationfunding #tradesecrets #patents #brandloyalty #intellectualproperty #entrepreneur

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