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Hilton and Starwood settle trade secrets lawsuit

Hilton and Starwood settle trade secrets lawsuit

Hotel chain Hilton Worldwide has agreed to a series of business restrictions in an out of court settlement with Starwood Hotels in a dispute over trade secrets.

The terms of the restrictions – which will remain in place – are to be kept confidential.

“Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation,” Hilton chief executive Christopher Nassetta said in a statement.

The suit relates to the defection of two senior executives from Starwood to Hilton

In April 2009 Ross Klein and Amar Lalvani moved to Hilton, taking hundreds of thousands of electronic documents with them.

The two subsequently developed a new Hilton hotel line called Denizen, using confidential information from Starwood, the suit said.

Terms of Settlement

Under the terms of the settlement an independent monitor is to be appointed to ensure that Hilton does not use Starwood information set out under the agreement.

It also forbids Hilton from buying or franchising any Starwood Lifestyle Brand hotel that Starwood operates.

Furthermore, Hilton is also barred from hiring any Starwood employee for its Hilton Luxury & Lifestyle Brands Group.

That group includes Waldorf Astoria Hotels & Resorts, Waldorf Astoria Collection, and Conrad Hotels & Resorts, as well as Denizen.

Additionally, it forbids Hilton from launching a brand similar to Denizen.

In June Hilton – which is owned by Blackstone Group - lost its bid to dismiss the case and have all the Starwood claims settled through arbitration.