It is very rare that a corporate espionage story makes the news and even less likely that I’d care at all. But a lawsuit filed yesterday did catch my attention. Starwood has filed suit against Hilton alleging corporate espionage and theft of trade secrets, all over Hilton’s plans to launch their new Denizen brand. The guy responsible for the new brand, Ross Klein, used to work at Starwood and now he works at Hilton. And when he left his old job he walked out the door with 8 boxes of papers, apparently contracts and market research, among other things.
I would be pretty pissed, too, if I were Starwood. After all, they’ve enjoyed a relative monopoly on the luxury/style segment with their W brand over the past many years. But does that mean it is corporate espionage that resulted in a competitor starting up a similar brand? Continental has made a huge name for itself by offering tons of transatlantic air service on 757s, planes often considered too small to serve the market. But they now offer service to twenty-something cities in Europe from their hub in Newark, mostly on 757s. And they get a LOT of business on those flights. And then the guy responsible for that plan went to work for Delta. The following summer Delta added a ton of flights to similar destinations in Europe. Corporate espionage? Or just a guy who knows what he is doing moving to a new company?
Ultimately this is likely going to come down to a boring trial with lots of testimony about the files that were taken and very little about the actual details of the brand. But that doesn’t mean it won’t be fun to watch.
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