2024 universal registration document

Legal and regulatory risks/Legal disputes
In the ordinary course of its business, in view of its global reach and the increasing complexity of the legal and regulatory environment, the Group may be involved in varying types of legal disputes and may be subject to tax, customs and administrative audits. Certain disputes could have an impact on the Group's financial position and/or reputation. See also the "Non-compliance" risk.	When assessing risks associated with legal disputes, L'Oréal takes into account the specific features of local legal environments, particularly for product liability in the United States, where the risk is exacerbated by the possibility of serial individual legal proceedings or class actions, as well as by the high costs of legal defence, the unpredictability of verdicts handed down by juries, and intense media coverage of certain proceedings and decisions. The main legal risks are reported to General Management and presented to the Audit Committee. The Group is currently involved in legal disputes related to competition law, product liability and taxation. It carefully monitors any disputes in which it may be implicated, and uses all legal means to defend its legitimate interests. For this purpose it relies on the expertise of the Legal Department (at Group, Zone and Country level), the Tax Department, and its external advisers, as well as on input from other corporate support functions at Group, Division and Zone level. L’Oréal has no knowledge of any governmental procedures, legal or arbitration proceedings, pending or threatened, that may have, or have had over the last 12 months, material effects on the financial position or profitability of the Company and/or the Group, other than those described in note 12.2 “Contingent liabilities and significant ongoing disputes" to the consolidated financial statements.

Legal and regulatory risks/Legal disputes

Risk identification

Risk management

In the ordinary course of its business, in view of its global reach and the increasing complexity of the legal and regulatory environment, the Group may be involved in varying types of legal disputes and may be subject to tax, customs and administrative audits. Certain disputes could have an impact on the Group's financial position and/or reputation.

See also the "Non-compliance" risk.

When assessing risks associated with legal disputes, L'Oréal takes into account the specific features of local legal environments, particularly for product liability in the United States, where the risk is exacerbated by the possibility of serial individual legal proceedings or class actions, as well as by the high costs of legal defence, the unpredictability of verdicts handed down by juries, and intense media coverage of certain proceedings and decisions.

The main legal risks are reported to General Management and presented to the Audit Committee.

The Group is currently involved in legal disputes related to competition law, product liability and taxation. It carefully monitors any disputes in which it may be implicated, and uses all legal means to defend its legitimate interests. For this purpose it relies on the expertise of the Legal Department (at Group, Zone and Country level), the Tax Department, and its external advisers, as well as on input from other corporate support functions at Group, Division and Zone level.

L’Oréal has no knowledge of any governmental procedures, legal or arbitration proceedings, pending or threatened, that may have, or have had over the last 12 months, material effects on the financial position or profitability of the Company and/or the Group, other than those described in note 12.2 “Contingent liabilities and significant ongoing disputes" to the consolidated financial statements.

Legal and regulatory risks/Intellectual property: trademarks, designs & models, domain names, patents
The brands, particularly the 37 major international brands, designs, models, domain names and patents filed are strategic intangible assets for the Group. Given the image and reputation of the Group around the world and given the large number of patents (694 in 2024) and trademarks filed by L’Oréal, third parties could: dispute the validity of L’Oréal’s intellectual property rights, or attempt to enforce their intellectual property rights against the products marketed by L’Oréal; or infringe on L’Oréal’s intellectual property rights, reproduce or imitate the Group’s packaging and products in order to benefit illegitimately from the name or associated technologies and thereby make undue profits from the efforts and investments made by the Group. Given the competitive context in which a growing number of patents and trademarks are filed, and in which some intellectual property rights result from acquisitions or are developed by third parties ("open development"), the free use of a technology or full availability of a brand before any launch cannot, therefore, be completely secured by L’Oréal. The proliferation of content generated using Artificial Intelligence (AI) is giving rise to a number of risks in terms of intellectual property, including uncertainty as to the ownership of rights to works and the possibility of benefitting from copyright protection, as well as a higher risk of infringement of third-party rights.	Special care is given to the protection of trademarks, designs, models and domain names belonging to the Group. This responsibility is entrusted to a special unit of the Legal Department. The department oversees the worldwide protection, management and defence of intellectual property rights via searches for prior rights, monitoring of registration and renewal procedures, the implementation of monitoring services and the launching of appropriate legal action against counterfeiters (legal proceedings, customs operations, etc.). In order to protect the Group against the risk of appropriation of a molecule, a formula, packaging, an application system or an application by another company, L’Oréal has set up the International Industrial Property Department, a specific structure which is part of the Research & Innovation Department. This department is responsible for filing, obtaining and defending the Group’s patents worldwide. In addition, it conducts studies on the free use of Group products with regard to third-party patents and monitors the legality of competitors’ products with regard to the Group’s patents. The Group is also an active member of organisations which have set themselves the goal of combating counterfeiting and promoting best commercial practices. This is the case of the UNIFAB (Union des Fabricants), the APRAM (Association des Praticiens du Droit des Marques et des Modèles), and the AIM. In order to mitigate and manage these risks, L'Oréal trains its employees and raises their awareness through measures such as providing guidelines on the creation and distribution of AI- generated content. The Group has an ongoing legal and regulatory watch system in place for monitoring intellectual property risks.

Legal and regulatory risks/Intellectual property: trademarks, designs & models, domain names, patents

Risk identification

Risk management

The brands, particularly the 37 major international brands, designs, models, domain names and patents filed are strategic intangible assets for the Group.

Given the image and reputation of the Group around the world and given the large number of patents (694 in 2024) and trademarks filed by L’Oréal, third parties could:

dispute the validity of L’Oréal’s intellectual property rights, or attempt to enforce their intellectual property rights against the products marketed by L’Oréal; or
infringe on L’Oréal’s intellectual property rights, reproduce or imitate the Group’s packaging and products in order to benefit illegitimately from the name or associated technologies and thereby make undue profits from the efforts and investments made by the Group.

Given the competitive context in which a growing number of patents and trademarks are filed, and in which some intellectual property rights result from acquisitions or are developed by third parties ("open development"), the free use of a technology or full availability of a brand before any launch cannot, therefore, be completely secured by L’Oréal.

The proliferation of content generated using Artificial Intelligence (AI) is giving rise to a number of risks in terms of intellectual property, including uncertainty as to the ownership of rights to works and the possibility of benefitting from copyright protection, as well as a higher risk of infringement of third-party rights.

Special care is given to the protection of trademarks, designs, models and domain names belonging to the Group. This responsibility is entrusted to a special unit of the Legal Department. The department oversees the worldwide protection, management and defence of intellectual property rights via searches for prior rights, monitoring of registration and renewal procedures, the implementation of monitoring services and the launching of appropriate legal action against counterfeiters (legal proceedings, customs operations, etc.).

In order to protect the Group against the risk of appropriation of a molecule, a formula, packaging, an application system or an application by another company, L’Oréal has set up the International Industrial Property Department, a specific structure which is part of the Research & Innovation Department.

This department is responsible for filing, obtaining and defending the Group’s patents worldwide. In addition, it conducts studies on the free use of Group products with regard to third-party patents and monitors the legality of competitors’ products with regard to the Group’s patents.

The Group is also an active member of organisations which have set themselves the goal of combating counterfeiting and promoting best commercial practices. This is the case of the UNIFAB (Union des Fabricants), the APRAM (Association des Praticiens du Droit des Marques et des Modèles), and the AIM.

In order to mitigate and manage these risks, L'Oréal trains its employees and raises their awareness through measures such as providing guidelines on the creation and distribution of AI- generated content. The Group has an ongoing legal and regulatory watch system in place for monitoring intellectual property risks.

2024 universal registration document

3. Risk factors and management