How is CVS sneaking Patrick Ta Beauty into its stores without brand approval?

0:07Abby Wallach: Hi, everyone. Welcome back to the Glossy Beauty Podcast, a show about the business of beauty and wellness. I'm your host, Glossy's West Coast correspondent, Lexi Lebsack. One of the biggest headlines in the beauty industry over the past two weeks has been about a lawsuit filed by makeup brand Patrick Ta Beauty against CVS and a Canadian wholesale consumer goods distributor named Axtrum. Now, we cover Patrick Ta Beauty quite a bit here on the podcast. The makeup brand is one of Sephora's darlings. It is seven years old, independently held, founded by celebrity makeup artist Patrick Ta, and sold exclusively through Sephora, which is why it was very confusing for shoppers to recently find the products sold at CVS for a discounted price.

0:56Abby Wallach: Now, Patrick Ta Beauty is suing CVS over the unauthorized sale of its cosmetics. Of course, we reached out to CVS and Patrick Ta Beauty. Reps from both groups said they couldn't comment at this time, while Axe Grum did not return our request for comment. Still, I want to understand how this happened and what other beauty and wellness brands can learn from these evocative headlines, and so I called on two experts. My first guest is a lawyer, legal analyst, and founder of The Fashion Law, where she unpacks the legal cases impacting the fashion and beauty industries. Please welcome attorney Julie Zerbo.

1:36Abby Wallach: Hi, Julie. Hi, thanks for having me. Next, we have the president of CO Bigelow Chemists, the iconic Greenwich Village apothecary, plus president of Bigelow Trading, which encompasses the CO Bigelow Beauty line and a US wholesale distribution arm that imports brands like Marvis Toothpaste. Welcome back to the podcast, Ian Ginsberg.

2:00Patrick Ta: Thanks. It's great to be here again.

2:02Abby Wallach: Yeah, so nice to see you. I have two powerhouse experts here. I'm excited to get into this. Ian, I really want to start with you for a little bit of industry context here because you know this industry. You run a pharmacy business, a distribution business, a beauty business. Prestige beauty brands have been popping up in places that they're not necessarily supposed to be sold forever, right? Like this is not a new industry. Give us a little bit of context here.

2:28Patrick Ta: So I guess we can call it diversion. So diversion has been around since the beginning of time. I mean, I've been in this business 40 something years. And it was pretty prominent years back, back in the 80s, 90s with professional shampoos, you know, professional hair care and fragrances where you'd see professional hair care, you know, in drug chains, in Target, in CVS, in Walmart, in all these places. And then in those days you'd have, it would come from different places. Some of it came from collectors where people would go door to door to different hair salons and collect it and then accumulate it and sell it to chains.

3:05Patrick Ta: And then you'd have others where the big fragrance companies where, you know, for various reasons, sometimes they're just trying to clear inventory towards the end of the year. Sometimes they're trying to, you know, generate a little cash. Sometimes there's an ingredient change or a package change or, you know, a labeling change or something. And it's a little different now, but in those years, you know, there were lots of buyers that would buy these things. And you would probably say to them, listen, make this disappear, but I don't want to see it here and I don't want to see it there. But it was kind of pretty hard to control that.

3:40Or what we call gray goods, where they would either import from overseas

3:44Patrick Ta: into the US or they would say, I'm going to give you, you know, X million dollars worth of this thing, put it on a boat and get it out of here. And I don't want to see it. But then we'd go on the boat and we'd end up back, you know, and and and then you'd see it in stores, but not in an organized fashion, you'd see like random bottles of things. And we'll talk about later with the whole codes business. And I can talk about the codes, but it was kind of an unwritten thing. So some companies knew about it, some didn't. There were hair salons that would open up. They were like empty shelves that would just have a sink in them and they would have all these brands would go in one door, out the other door.

4:21Patrick Ta: And I could speak from my personal experience that back in the 80s, the reps were in on it too. So, you know, the fragrance companies would ship in a whole load of stuff and the rep would show up and he'd go, don't worry about it. It would disappear. So this has been going on forever on both sides.

4:42Abby Wallach: Well, I mean, I think the real like interesting part of this whole discussion for me is that this is part of an initiative at CVS called Fresh Beauty Finds, which is basically an off price prestige alternative. So they're sort of competing with the TJ Maxx's of the world. And of course, we know Off Price is full of all kinds of prestige brands. So it's really interesting to me why this story is causing such an uproar. Julie, you covered this for the fashion law. What are the sort of broad strokes here of why Patrick Ta is suing this distributor, NCVS? Everything that Ian said is spot on. I think This is, of course, not new.

5:22Abby Wallach: You know, we've seen lawsuits like this. We've seen claims like this. In this case in particular, Patrick Ta Beauty is essentially alleging trademark infringement and unfair competition against CVS, which is selling the goods at issue. And then Axtrom, like you said, which allegedly supplied CVS with these products. So basically, Patrick Ta is alleging that CBS is offering up these products without its authorization. Axtrum supplied them, the products and promotional materials bearing its trademarks without authorization, and that essentially consumers might be confused. Right. That's the crux of any trademark infringement claims.

6:10Abby Wallach: Patrick Ta is alleging that consumers might see these products in CVS stores and think that the Patrick Ta beauty brand authorized their sale in CVS or has endorsed it in some way when it hasn't. And so at the same time, it goes further and it alleges specifically that the products are not inauthentic. It's not this is not a trademark counterfeiting case. The goods, in theory, are authentic. But Patrick Ta Beauty is alleging that they're materially different, which is a legal term of art, and basically saying they're not the same as the ones you would buy from an authorized Patrick Ta retailer.

6:58Abby Wallach: And here, it's saying that the products are different because of the conditions in which they're sold. If you buy a Patrick Da product from an authorized retailer, you'll get a specific warranty. And you'll get certain consumer or customer service benefits that CVS can't offer as an unauthorized retailer. So it's actually very, it's really interesting. It's much more nuanced than, you know, CVS is selling fake Patrick Ta products. Sure. I mean, I have to admit, when I first saw these headlines, I was like, ooh, fake Patrick Ta products showing up in stores. And it, but they're, I mean, they're authentic.

7:41Abby Wallach: It's very nuanced. Is what we're talking about here a legit argument against CVS? So I'll preface by saying these are Patrick Ta's allegations, right? Like CBS and Axtrom will have an opportunity to file their own response and argue against what Patrick Ta is alleging. However, let's assume that what Patrick Ta is alleging is true. You know, we've seen companies successfully argue that if you sell authentic products in a way that's different than they were initially sold, that that can amount to infringement. You know, it can look like an array of things, right? We've seen cases where brands have argued that products, physical products themselves are altered in a way so that they no longer look exactly like what they initially sold.

8:36Abby Wallach: That's not what's happening here. What's happening here is that Patrick Ta is saying, you know, essentially Sephora offers certain customer service that CVS isn't and that there are warranties. like I said, that CVS cannot offer because it's not an authorized retailer. Those claims have succeeded in other cases before. And so it's unclear to me, though, at this point, what exactly the warranty is, what those consumer benefits, customer service benefits are. But these are legitimate claims in theory. From the case and what we know so far, do we know how CVS got the products from Axtrom? Do we know how Axtrom got the products?

9:20Abby Wallach: We don't. Ian can probably speculate better than I can about how Axtrom got them.

9:27Patrick Ta: From what I can understand, I mean, they, and this is kind of the end result of it, is really like they sold those products to somebody. Like CVS is not the local beauty supply place on, you know, in Santa Monica, right? CVS has worked on this plan to do this program, which I'm not mad at. They're trying to find ways to get people in the door, all that stuff, where they claim it's going to roll out to 2 ,000 stores. They've built displays. Now, Patrick Tom might be claiming that they're knocking off their displays, but to me, they look almost generic, but they'll fight that out in court. So CVS has got a program that they're rolling out 2 ,000 stores in planograms that they've planned for a while.

10:10Patrick Ta: Evidently, they have a supply chain machine locked and loaded to roll this out. So they didn't collect a few pieces here and there. So this amount of goods that you're seeing in CVS was sold to somebody. In this case, I think CVS is, I don't think Patrick Ta's denying they sold it to Ackstrom. And maybe they told Ackstrom, make it disappear. I don't want to see it back here. And maybe Ackstrom sold it to CVS. I have no idea. They'll find out. But like, you know, there's a problem, you know, and I don't know him. He's a brilliant makeup artist, amazing brand. I mean, Sephora loves him. Somebody there sold that stuff to somebody.

10:50Patrick Ta: And so in my opinion, you know, if I were him, I probably would have, I would have done two things. One, either buy it back, you know, go to CBS and buy it back or just keep your mouth shut and let it go away and make sure that doesn't happen again. Go on. Go on. You know, he's got an amazing social platform like just just, you know, somebody screwed up internally. Right. And so, all right. You find the hole, fix the hole and then go on your social media platform and say, hey, to your audience of loyal people, love you. So listen, you know, we screwed up. Somebody sold some stuff. I don't know how it got there.

11:26Patrick Ta: It might have gone from truck to truck. Maybe it's not good. Maybe it's not. You know what I mean? Some, you know, create a narrative and say, you know what, we really apologize, but we love a partner. You know, I don't know. Maybe, you know, I don't know why he wants to. You know, CVS is one of the largest companies in the world. Four hundred billion dollar company. I mean, he's going to, you know, it's they spent his market cap for lunch today. So I don't know what he's doing. I don't know why he did this. He's only perpetuating this story for what? I don't know what he has to gain.

11:59Abby Wallach: I think you say two interesting things there, Ian. One, I don't get the sense, I have to revisit the complaint, but I don't get the sense that Patrick Toss sold to Axstrom because I don't think there's a breach of contract claim in the complaint. I could be wrong. But the lack of a breach of contract claim makes me think that they got them from somewhere else. Because if Axtrom turned around and sold these products to CVS, Patrick Ta would have a pretty easy breach of contract claim, assuming that Patrick Ta's contracts say only Sephora can sell our products, right? Right. Sephora gets a huge benefit from being able to say you can only get Patrick Ta products here.

12:50Abby Wallach: Yeah, it's an exclusive. And so I find it hard. I just find it hard to believe that that Patrick Ta was in any way affiliated.

12:58Patrick Ta: And maybe it wasn't to Ekstrom, but but it's not for hard for him to figure out where that amount of product showed came over, whether it didn't go to Ekstrom or somewhere else. But like, you know, look down your list. I used to talk to the hair care companies. We've never bought it. I don't buy anything on the secondary market. I never have. But I have a lot of friends in the business who are always struggling to find a version. And I yell at them all the time. And I go, and it's not of this kind of scale of inventory. But I'll say to them, look at the traffic we have in the center of New York City, who we are.

13:34Patrick Ta: Look at what volume we buy from you. And then go look at all your other customers. and whoever's close to us on that list, that's your guy. I kid with them all the time. I don't care if he was the best man at your wedding. That's the guy. It's not that hard to find. They're hiding in plain sight. So whether he sold it to Axstrom, those goods ended up from somewhere. I don't know what his distribution looks like. But you're right. I'm surprised he's not suing Axstrom. So maybe he is. He is. Yeah, he is.

14:09Abby Wallach: Axtrum's also named as a defendant. But I think that what you what you said is interesting about the volume and the quantity. Right. If this was it's not that common for us to see brands suing TJ Maxx or Marshall's. Right. Because the the the volume is is so hit or miss. Right. It's it's not they don't get massive quantities of the same or similar products. I think, like you said, what's different here potentially is that this is such a large push by CVS that it might make sense for Patrick Ta to take action. But at the same time, you touched on, without naming it, an interesting legal phenomenon called the Streisand effect, where when you draw attention to this and as a result of filing a complaint, and now consumers that might not otherwise have known about this now know about this.

15:09Abby Wallach: I mean, my own, the fashion laws, Instagram comments were flooded with, with comments like which CVS I haven't seen this at CVS. And so I think that's why a lot of these, you know, we've seen cases, we have seen cases like this, but it's fewer than the cases that we haven't seen that could be filed. I feel like a lot of these situations are handled behind the scenes, letters between councils and not put out there for sites like mine and others to find out about and write about and have consumers become so interested.

15:51Patrick Ta: by the way you uh i was looking at the davidoff case which they lost right years ago but just to give some context on it when when the professional shampoo stuff was out of control the professional hair care stuff was out of control they would try to track lot numbers right um and and this is in the case of collectors so not when they you know what they would say you know john paul mitchell used to do ads years ago um these ads on tv he'd go i do not want you to buy your products anywhere from an author and, you know, he would run these ads. But in the case of the companies not doing diversion under the table and people collecting, they couldn't really figure out how to track it, you know, in those days.

16:33Patrick Ta: And lot numbers weren't good enough because when you do a lot, a lot could end up in a lot of places. But they used to put like UV codes on bottles. I remember that. Yeah, they used to put UV codes on the bottle because this way, when they were trying to figure out where the holes were, they could find the stuff in TJ Maxx or CVS or whatever, and they would be able to track it back. I think the Davidoff case, what they were doing was they were wiping the codes off. So I think they won based on the fact that they couldn't track the lot because that was, I get it. I get, and that's how they lost, right?

17:07Patrick Ta: Am I wrong?

17:08Abby Wallach: Wait, remind us what that case is.

17:11Patrick Ta: Oh, so Cool Water was like, it was Cool Water. It was like one of the hottest fragrances next to like Polo. And so there was a big problem with diverted cool water showing up in, I guess, in CBS. And I guess Davidoff probably wasn't diverting it. It was being collected in, you know, God knows where. It could have come from department stores all over the place. And they were trying to find the hole. So when CBS was buying the product through whoever they were buying it from, they were wiping the lot number off so that Davidoff couldn't track who, you know, where it came from. And so when the case went to court, I guess, they won the case by saying, because we can't trace the lot, we can't warranty the product because we don't know when it was made or who was, you know.

17:55Patrick Ta: And, you know, kudos to them. They won on that one.

17:58Abby Wallach: Yeah, they did. And it's a heavily cited case at this point in the Second Circuit. It went up to an appeals court in New York. And the court upheld an injunction against CVS, basically prohibiting CVS from selling these altered products because CVS or whoever CVS was getting these products from was removing these quality control codes that were on Davidoff products. And I think it's important to say in the context of that case, in the context of the secondary market generally, it's not inherently problematic from a legal perspective to resell products that were put on the market by the original brand owner, whether that be Davidoff, whether that be Patrick Ta Beauty.

18:51Abby Wallach: There is a robust doctrine in trademark law that says trademark holders can't go after resellers for selling authentic products that were put on the market by the original trademark holder. And to be the annoying lawyer on the podcast, there are exceptions to that.

19:14Abby Wallach: It's called the first sale doctrine, and there are exceptions. There's the material differences exception, which is what we're talking about in the Patrick Ta beauty case, but that was also relevant in the Davidoff case as well. And like I said, that the material differences can be physical differences. There can be, you know, Davidoff argued in the CVS case that the product packaging was actually damaged because they were removing these codes from the products. It also argued that CVS was getting in the way of its legitimate quality control attempts by removing those codes. But then in this case, that material differences exception can go as far as, you know, differences in warranties, which we've seen successfully argued in other cases, and also differences in the conditions in which these products are sold.

20:15Abby Wallach: So unless one of those exceptions apply, it's generally above board from a trademark perspective to resell products. That's not to say that there aren't other potential claims. You know, there might be contract claims or claims when it comes to potentially breaching distributor agreements or something like that.

20:37Patrick Ta: Now, they didn't knock off the displays. They just made kind of generic displays, right, with generic photographs.

20:42Abby Wallach: Yeah, which gives rise to other trademark claims as well. You know, you can't. And even that's nuanced, right? Because sometimes you need to be able to use another brand's trademark in order to describe or display what you're selling. That doesn't go as far as necessarily creating new displays. You know, we've seen this issue come up in some of the luxury brand versus resale site cases where the luxury brands are saying, well, you don't need to use our name that much. You don't need to use our logos that prominently in order to alert consumers that you're selling a Chanel bag. But this area of the market and this area of the law is so interesting because there are a lot of nuances that come with selling other companies' products.

21:36Abby Wallach: and brands in the, and you can attest to this, Ian, brands in the prestige market, in the premium market, and certainly in the luxury market, are steadfast in their efforts to try to, we can use the word control if we want, the conditions protect, protect the conditions in which their products are sold. And I think that there's some legitimacy to that, certainly. But there are shades of gray in how far companies are trying to go in some situations, I think.

22:12Patrick Ta: Yeah, I just keep going back to the fact that CVS is talking about this program for a while. They have, you know, they've set up a supply chain engine to feed this beast. And so these are large amounts of goods that don't just disappear. You know, Patrick's House business isn't that big that he doesn't he didn't know where this stuff showed up. you know, and that it came from. But, and I'm sure Sephora is pretty angry. So, you know, maybe that's why he's, maybe that's why he's screaming like crazy. Sephora is probably, you know, really upset. And he's exclusive. He's their darling, as you said.

22:52Patrick Ta: And so they're probably really angry, but he could put it. I don't know if I was, I mean, I'm not advising him in what do I know, but I would have advised him to just offer to buy it back or just leave it alone, go on your social media, no harm done, just shout from the rafters that this was a problem, but the goods are okay. And if you want, you know, whatever, if you bought it and you want to replace it, I don't know, you know, something, you could have spun that a million different ways where you could have come out a hero rather than take on a$400 billion beast.

23:20Abby Wallach: Yeah. With, with, and also what's interesting about CBS, right, is they have sophisticated legal counsel that apparent that, that cleared this, right. In theory, that saw the promotional materials that CBS had out, that Patrick Ta, by the way, wants back and wants destroyed as part of what they're asking for. They want these materials out. They want the products out of CBS stores and they want these promotional materials out of CBS stores. But, you know, counsel at CBS, in theory, cleared all of this. So it's not it's not necessarily as straightforward as Patrick Ta's allegations. And it rarely is.

23:59Abby Wallach: Right. The other thing that's interesting is Sephora might have come knocking on Patrick Ta's door and said, but what about this term in our contract that says we're the only ones that get to sell your product? So I think that there might have been some of that, too. I mean, if LVMH owned Sephora's attorneys came knocking on my door, I'd be nervous. Yes, I would also be very nervous.

24:26Patrick Ta: Yeah.

24:26Abby Wallach: Yeah.

24:27Patrick Ta: As CVS came knocking on your door, you'd be nervous too.

24:30Abby Wallach: CVS, Joe. Yeah.

24:32Patrick Ta: Yeah. All right. Yeah. Yeah. Yeah.

24:35Abby Wallach: So I think the big thing that we're sort of like sort of honing around here is that most likely this is not a stolen truck. Most likely this is not just missing products. Most likely Patrick Ta Beauty sold these products. They diverted their products. And then maybe they just didn't know they were going to go into such a high profile store. Is that probably what happened here?

24:57Patrick Ta: They could have. I mean, again, we don't know. They could have sold it to somebody and said, make it disappear. And I don't want it back in the U.S. And it ended up back here. Yeah, in the U.S. or somewhere. You don't know. But again, you know, this kind of stuff, again, diversion, as I said, whether it's legitimately companies selling stuff happens every day. You know, one of the things we should talk about is why would companies sell stuff? And they all do. Why would why would companies sell stuff to TJ Maxx or to off or to do all these things? You know, why do they do it? And I said that before to clear inventory for cash for a million reasons.

25:33Patrick Ta: But why wouldn't they just throw it in the garbage? Right. And steamroll it then and then run the or for fear of running the risk of it ending up back in circulation. And that's a waste issue because the optics of that are pretty bad, too.

25:47Abby Wallach: So I was going to say you want worse headlines than CBS selling your product. to have a consumer watchdog or someone find out that you're destroying products. Correct. That is, I mean, people are still talking about how Burberry did that. Yes, that's the first thing that popped in my mind. Exactly. Honestly, to be a fly on the wall in the aftermath of that. But also there is increasingly legislation that doesn't allow for certain products to be destroyed, mostly in the EU.

26:18Patrick Ta: People going through the dumpsters behind CVS, Bath & Body Works, the department stores, wherever.

26:23Abby Wallach: Sure, sure.

26:24Patrick Ta: And pulling stuff out.

26:25Abby Wallach: I mean, I will say I've reported quite a bit on TJX and just their massive growth in this market. I mean, top player at this point. They're making so much money. And I walk through the beauty section there as a reporter and as a consumer sometimes. And they've got everything. They've got all of the Sephora brands in the TJ Maxx. And they're small quantities. and so ian it's is it just very lucrative is that why this is happening for the brands well

26:52Patrick Ta: no i mean when they have to it's tj max's they they so the way it works with tj max you can tell them you could i only want to sell it here you can tell them i only want to sell it in europe you can dictate where it goes but they also the beauty of the beauty of tj max is that if they take you know whatever they buy they sprinkle it across all the stores So if you sell them a large amount, they're not going to put it all in New York and L.A. They're going to sprinkle four pieces for you. And so, you know, I don't want to speak for every company. And I'm a small company, so I don't really have enough debt to sell.

27:26Patrick Ta: But every company does it. Sure. They're all selling to TJ Maxx. They're selling to Ross. They're selling to third-party sellers that are going overseas to the Middle East, to Africa, to Asia, like all over. So this has gone on. This goes on every day for all kinds of reasons. So because, again, you don't want to, you know, years ago they used to just steamroll it. Now they now they now they don't. You know, of course, they don't want to do that. And you don't want it back in circulation. So you have to trust who you're working with. There are there are off price sites where there are, you know, gated sites where people can go on and buy.

27:55Patrick Ta: You know, you also worry about collectors going on there and buying and then reselling it on eBay. And, you know, I have that problem all the time. We're buying it. People, you know, if you go on eBay or Amazon, I looked on Amazon just for fun. and this Patrick Todd stuff up there, but that's probably people, you know, those are individuals who buy a couple of pieces with a coupon and are making$2 on a unit. I mean, that you can't, you know, it's kind of whack-a-mole. It's just, we all deal with it. I told you the other day, I had a truck stolen. I know. Tell us that story, Ian,

28:25Abby Wallach: because that's a crazy story.

28:28Patrick Ta: We have our own warehouse and then we use a secondary warehouse and it's not far away and you use these systems for what they call LTL, less than truckload freight. where they go into these computers and they put out for bid, you're going to move stuff from point A to point B. And the communication was hijacked. So someone, a trucker picked up my documents, went to the warehouse and picked up a truckload of stuff, 15 pallets. But the more I talk about it, the more I hear that this is going on a lot.

28:57Abby Wallach: Wow. And where do you think those pallets of your merchandise are going to end up?

29:00Patrick Ta: I'm waiting to see. Wow. It'll show up. It'll show up somewhere. Now, I don't think, you know, well, CVS, but I don't know if those guys will buy, you know, stuff that could be stolen. You know, I'm not worried about that. They're probably going to, who knows what, I'll probably find it on eBay. Yeah, fair, fair. But I don't think CVS, TJ Maxx, they're very careful about, they don't want to be in a lawsuit over buying stolen goods, that's for sure.

29:31Abby Wallach: For sure. I think one of the important things to call it here for all of our listeners is that TJX, which is TJ Maxx and Marshalls, they're doing everything very, very discreet. They do not talk to press. They don't like the press. They don't put their products out there in ads. It's a small smattering of products in stores. You can't even really see the stuff online. It's very complicated on their site to get to it and unveil the price. It's very discreet. I mean, CVS is going the opposite way here, and they really want to talk about this new off-price strategy. So I'm assuming that's where Patrick Ta got in trouble here.

30:06Abby Wallach: They just picked the wrong off-price diverter. But I don't know, because I wonder, why does a Sephora exclusive brand even have a distributor?

30:15Patrick Ta: Well, they probably don't, Dave. I think we both agree. They sold – that was sold to somebody, or I don't think Sephora sold it.

30:22Abby Wallach: No, no, no, no. Goodness now.

30:25Patrick Ta: I don't know what their international business looks like.

30:28Abby Wallach: Sure. You know, it could have gone, maybe they have a warehouse in Asia.

30:33Patrick Ta: I don't know. You know what I mean? They know.

30:36Abby Wallach: Yeah. They know. Okay. So what are the big, Julie and Ian, what are the big takeaways here? What should prestige brands or I guess maybe any brands here who are, you know, tempted by off-price, tempted by this new CVS off-price section, want to protect the IP of their brands, you know, what should we take away? from this whole splashy news cycle? For me, I think one of the more intriguing elements is that this comes against a background of evolving legislation. I think it's getting harder and harder and harder for brands to destroy goods, make them disappear in that sense. And so I think that means that brands will be looking at their distribution agreements closely.

31:23Abby Wallach: I think that they, in some senses, need solutions. You know, I think that brands might need to be creative if they can no longer destroy products, what they can do with them. That might have been what happened here. And it didn't go quite as Patrick Taub-Beauty might have wanted. But I think that this is not the first time we've seen a case like this. And I really don't think it's going to be the last one by any means.

31:57Patrick Ta: Yeah, I mean, you have to just, you know, everybody has these issues of whether it's, you know, overstock, short date, this, that package change, label change. You just have to be very, very, you know, mindful over, you know, it's easier now to have control over it than it was 30, 40 years ago, as I said. But you have to be mindful over there are places you can go. Probably not. But you have to be really strict over who you're working with, where it's going to go. Be very strict, specific over where it can be sold, where it can't be sold. There is, you know, I say this to my kids all the time.

32:36Patrick Ta: There's 300 million people who live in the United States, 350, and there's 7 billion who don't. There's a big world out there. And so if it's labeled properly, probably there's other markets it can go. Well, there's a, there's, you know, for, because they're selling it cheap. So, you know, it can go to places where there's, you know, they don't have access to, you know, there's, there's other markets you can go to. You just have to be really, you just have to make sure, you know, to keep, keep the, keep the chain pretty tight. It's funny. I don't, I don't know if you know, in the drug industry, because we're also in the drug business, they instituted these dossier things years ago because of all the diversion in, in, in drugs and pharmaceuticals, which, which need to be, you know, whether if it's a refrigerated item, it has to be.

33:17Patrick Ta: So a lot of drugs have, have pedigrees now. So there's, it shows the chain of command because things are resold and sold, but there's a pedigree that follows it. Now, I don't suggest they do that for beauty, but you just, I think brands this, you know, they're always going to have to do this kind of stuff, but they have to be very, very, very, you know, strict and mindful and follow that, you know, follow it and make sure that whoever you're working with is following what you're asking to do. But, you know, we can all agree, can't go in the garbage.

33:47Abby Wallach: Brands also need to be sensitive to or mindful of the larger narrative too, right? Because this story has taken on a life of its own. Social media has absolutely blown it up. And so, you know, So council is obviously thinking about the optics increasingly often when they're writing cease and desist letters, when they're writing the language and complaints and being mindful of the fact that this this will go further than, you know, lawsuits used to or, you know, CNDs used to. I don't know if Patrick Ta Beauty was, I don't know if they thought through how big this story would become and how much a legal filing could drive demand for the products that they're trying to have removed from the market, right?

34:45Patrick Ta: Well, we know this helped CVS. I hope maybe it helped Patrick Taille also at the Sephora side. But he did CVS a huge favor. Like he did their marketing forum for the next month.

34:57Abby Wallach: He kind of did. I didn't even think about that, but it's such a great call.

35:01Patrick Ta: Yeah. There's all these videos of people, you know, scoping it, whether it's Patrick Taille, because they're mentioning other brands too. But he's, you know, it's done a hell of a lot. And listen, CVS is, you know, listen, they're not struggling$400 billion, but the retail stores are struggling. And so it's making people go explore. So if it gets them in the door, it's better than any celebrity brand.

35:25Abby Wallach: I mean, the whole off-price section at CVS is not a stupid idea. I think it's one of the smarter ideas that they've had. They have to right-size those stores. They have to get people in for a real reason, and it's not buying toilet paper. So it's a pretty clever idea.

35:41Patrick Ta: Although I tried to, ahead of this thing, I was, this weekend, I said, let me go find one. Oh, could you? But I could, yeah, I couldn't, well, if you go online, it doesn't really say. Some of them have more like organized sections. Other ones, they say they're kind of, this product is sprinkled around and I wasn't going to spend the whole day driving from CVS to CVS. But, but it was hard to find.

36:02Abby Wallach: I have to go to CVS later. I'm going to look. Just what Patrick Ta Beauty wanted, right? All of us out there looking.

36:09Patrick Ta: but evidently there's a lot of stuff. I mean, you know, the professional hair brands have been there forever. Fragrances have been there forever, but this is, you know, the whole, the makeup and skincare thing. That's a, that's a new, that's new. Yeah.

36:21Abby Wallach: Well, Julie, Ian, thank you both for lending your time here. Great conversation. I loved both of your hot takes. So much insight for our business listeners. Thank you so much for coming on the pod.

36:32Patrick Ta: No, it's not going to be involved. Thank you.

36:34Abby Wallach: Thank you. So interesting.

36:40Abby Wallach: And thank you for listening to this episode of the Glossy Beauty Podcast. If you enjoyed it, please leave us a rating and a review on Apple Podcasts, Spotify, or wherever you're listening. And for even more coverage on the beauty industry and more, please visit glossy.co slash beauty.

37:09you