Hilton loses bid to dismiss trade secret lawsuit

Judge claims Starwood has presented enough evidence to pursue the case

Starwood sued Hilton in 2009, accusing Klein and Lalvani of working on a new Hilton brand called Denizen.
Starwood sued Hilton in 2009, accusing Klein and Lalvani of working on a new Hilton brand called Denizen.

Hilton Worldwide has failed in its bid to dismiss a lawsuit by rival hotel operator Starwood Hotels & Resorts Worldwide that accused it and two former Starwood executives of stealing trade secrets, according to a report by Reuters.

A U.S. district judge on Wednesday ruled that Starwood had “presented sufficient evidence” to allow the case against Hilton to go forward.

Starwood claimed the executives, Ross Klein and Amar Lalvani, responsible for the development of its luxury hotels before jumping to Hilton in 2008, accessed the company’s computer systems without authorisation and stole hundreds of thousands of confidential documents.

"The amended complaint alleges specific facts to demonstrate that both Klein and Lalvani's access of Starwood's computer systems and transmission of electronic files to home addresses (and ultimately to Hilton) continued after they had accepted employment by Hilton for Hilton's benefit," Robinson wrote in a 19-page opinion.

Hilton had sought to dismiss the case on jurisdictional grounds, but the judge retained jurisdiction on two of the claims.

"Today's decision by the Court is a procedural ruling that has no impact on the ultimate outcome of the case or what the plaintiff must prove if the case goes to trial," Hilton said in a statement. "The ruling merely allows the case to move forward to the next phase."

Starwood sued Hilton in 2009, accusing Klein and Lalvani of working on a new Hilton brand called Denizen, using confidential Starwood information.

 

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