The Nefeli Corporation, which is a company specializing in traditional Chinese medicine concepts to skincare, filed a $5 million dollar lawsuit against cosmetics giant Estee Lauder and its affiliate, Origins Natural Resources, Inc. for breach of contract and fraud.

According to the suit, which was filed in the Supreme Court of the State of New York, Dr. Ping Zhang, who is the founder of Nefeli, was contacted by Estee Lauder under the guise that the cosmetics company was interested in incorporating traditional Chinese medicine concepts into its products and entering into a future business relationship with Dr. Zhang and Nefeli.

Things went bad when Dr. Zhang claimed that she and Estee Lauder entered into an agreement back in June of 2005, which would eventually include Origins.  Dr. Zhang was asked to provide confidential information, material, samples and technologies used in her Nefeli skincare products to Estee Launder and it was agreed by both parties that they would not attempt to analyze or reverse engineer any materials or samples which were provided by Dr. Zhang to the company. 

Dr. Zhang alleges that once Estee Lauder received the product samples and confidential information on the application of traditional Chinese medicine to skincare, they breached their contract by illegally analyzing and reverse engineering the product samples and Zhang was promptly dismissed.  Estee Lauder went on to create Origin’s Youthtopia, which Dr. Zhang insists is based on her formula.

Representatives for Estee Lauder have denied the claims.