Gillette is suing Dollar Shave Club, a startup peer, over alleged use of its patented technology. The move comes amid a growing battle for the US online shaving market which has flourished in recent times.
Procter & Gamble, the company which owns Gillette, accused the startup of violating its intellectual property and said the lawsuit was filed due to "unauthorised use of patented technology, which is prohibited by law, and is intended to protect Gillette's significant investment in razor technology".
P&G added that it was not only seeking damages but also an injunction to restrain the California headquartered startup from selling any products that encroach on its patented technology.
Deborah Majoras, chief legal officer at P&G, said: "Our patents help protect the many technical advancements we've made through the years — and when it becomes necessary, we take action to protect these important assets." In response, Dollar Shave Club said it was looking into the matter.
Gillette has been the market leader for many decades and has introduced several technologies aimed at a better shave, with an eye on higher sales and price realisation. However, according to Euromonitor data, since 2009, its market share has dropped 4.3 percentage points to 68.2% in the US.
One of the reasons for the decline is its slow pace in catching up with "shave clubs", an online subscription model that delivers razors and accessories at the customer's doorstep. Though it sells its razors online, on marketplaces such as Amazon, it started its own "shave club" portal only this summer.
This is where its rival startup has an edge. According to Slice, which tracks online shopping, Dollar Shave Club has 54% of the online shaving market which is more than double Gillette's 21%.
Apart from Dollar, Gillette has to deal with many such "shave clubs" such as Harry's Razor Blades for a slice of the online pie. However, the overall sales of razors online continue to be a fraction of offline retail sales.