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Starwood accuses Hilton of theft of trade secrets

17 April 2009 by
Starwood accuses Hilton of theft of trade secrets

Starwood Hotels & Resorts has filed a lawsuit against Hilton accusing its rival of theft of trade secrets and demanding the company stops the promotion and roll out of new boutique brand Denizen.

In a move that has sent shockwaves through the hotel industry, Starwood, which operates design-led brand W Hotels, has filed the lawsuit against Hilton Hotels Corporation and two individual executives who were poached from Starwood last summer to create and launch Denizen.

The lawsuit alleges that Ross Klein, global head of luxury & lifestyle brands for Hilton Hotels Corporation, and Amar Lalvani "stole massive amounts of proprietary and highly confidential Starwood information", according to The Times.

It alleges that this information "was used to expedite Hilton's entry into the lifestyle hotel market, reposition its luxury brands and substantially reduce its costs and risks of doing so".

The lawsuit adds that confidential information on the W brand was used in the development of the Denizen brand, which was launched by Hilton in March.

Kenneth Siegel, Starwood's chief administrative officer and general counsel, said Starwood had been left with no option but court.

"The wholesale looting of proprietary Starwood information, including a step-by-step playbook for creating a lifestyle luxury hotel brand, unfairly enabled Hilton to launch a new brand in only nine months instead of the usual three to five years," he said.

A spokeswoman for Hilton said: "Hilton Hotels Corporation is aware that a lawsuit has been filed, but we have not yet seen a copy. We will respond appropriately in due course."

View Starwood's 91-page writ against Hilton >>

Denizen brand marks Hilton move into boutique hotels >>

Hilton to launch new boutique brand in the UK >>

Giorgio Armani at centre of hotel legal battle >>

Starwood to launch 10 W hotels in 10 years >>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.

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