Hilton Sued by Starwood for Theft of W Trade Secrets
White Plains, NY based Starwood Hotels & Resorts Worldwide Inc. has filed a complaint against Hilton Hotels Corp., alleging theft of trade secrets. Starwood alleges that two former Starwood executives - Ross Klein and Amar Lalvani - who were hired by Hilton, stole extensive information about Starwood’s W Hotel brand, and used it to develop the global lifestyle Denizen brand for Hilton.
Apparently, both were involved in the develpment of Starwood’s lifestyle and luxury brand hotels - which includes the W and the St. Regis. And the lawsuit claims that “Klein and Lalvani took and encouraged other Starwood employees to take with them to Hilton over 100,000 electronic and hard copy files, many containing highly confidential and proprietary Starwood information and trade secrets.”
And also alleges that the executives stole “massive amounts of proprietary and highly confidential Starwood information which 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.”
Ross Klein is head of luxury & lifestyle brands for Hilton, while Amar Lalvani is the head of development for the same. According to his bio on Hilton’s corporate website, Klein joined Hilton in June 2008 as Global Head, Luxury & Lifestyle Brands, and charged with review and strategic development of the group’s luxury portfolio including the Waldorf=Astoria, the Waldorf=Astoria Collection, Conrad Hotels & Resorts and the creation of the then-unnamed Denizen brand. Nine months after he joined, Hilton Hotels Corp. launched the Denizen brand on March 10, 2009.
The bio also highlights his past work at Starwood - “President of Starwood Luxury Brands Group, including W Hotels Worldwide, The Luxury Collection and StRegis Hotels & Resorts. He also oversaw the development and branding of Aloft, a new highdesign, low-cost brand which redefines the select-service category. Ross’ integral involvement with W hotels and infusion of experience-driven marketing helped to transform the brand and highlighted his unique talent and ability to classify and distinguish brands.”
The inference here is that Hilton hired Ross Klein specifically because of his past experience with W. Seems like Klein, aided by other ex-Starwood employees, went a bit too far and took a few shorcuts in trying to create a W clone for Hilton, which has now landed Klein, Lalvani and Hilton Hotels Corp. in big trouble.
The Starwood complaint asks for the court to stop Hilton from going forward with any new developments on Denizen. Whichever way it turns out, it’s not going to be without cost for Hilton.
The Starwood complaint was filed in federal court in New York (Starwood v. Hilton, 09-03862, U.S. District Court, Southern District of New York -White Plains).
Related Links:-
Hilton Is Sued Over Luxury Chain
Hilton Launches Denizen Hotels as Global Lifestyle Brand
Ross Klein bio
Posted on April 17th, 2009 by PLing
Filed under: Hotels
It looks like Starwood doesn’t like it when someone rips them off. Perhaps they now know what it feels like to be ripped off. Starwood and Raintree Vacation collaborated to steal more than $25 million from ordinary people who trusted them and thought they were buying a fractional ownership share of The Los Cabos Villas in Cabo Mexico, until Starwood decided they would just take the money and not build anything. Does that sound fair?
Hi Peter - I don’t really know the full background of the Los Cabos villas, but a brief check showed that the orginal developers hit a money crunch, so Starwood bailed them out and took over, and the project is currently ‘under review.’
That’s a whole different issue, and besides, it’s old news. I’d prefer to stick to the issue at hand - Hilton vs Starwood, and theft of corporate trade secrets.
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