Sunday, May 14, 2017

Corporate spying costs billions, can it be stopped?

Hotel giant Hilton wanted to develop an all-new luxury hotel chain called Denizen to satisfy a growing market for high-end accommodations. Its competitor Starwood thought Denizen seemed very similar to its successful W chain. Too similar. And in 2009 Starwood Hotels & Resorts filed a corporate espionage lawsuit against Hilton, claiming two former executives who left to work at Hilton stole, and recruited others to steal, more than 100,000 documents full of sensitive information.
The documents, Starwood said, included trade secrets like a step-by-step guide to creating a new luxury brand from the ground up. Starwood said the name Denizen itself came from a concept Starwood developed for the W chain called the "zen den." In the end, Hilton settled with Starwood for $75 million and had to drop the Denizen brand. Hilton did not admit wrongdoing as part of the settlement, saying in a statement, "Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation."

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