Hilton Worldwide has accepted a ban on launching a lifestyle hotel brand, as part of a settlement with rival hotel company Starwood Hotels and Resorts over claims of industrial espionage.
In a statement, Hilton confirmed it had consented to an injunction that includes “certain business restrictions” for a period of two years, but said additional terms of the settlement were to be confidential.
Christopher J. Nassetta, Hilton Worldwide’s CEO, said: "Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation.”
He added that Hilton is committed to “fair, ethical and robust competition in the marketplace”.
Hilton attempted to launch its first lifestyle brand Denizen Hotels in March 2009, saying the name would be seen in key cities throughout the globe.
The following month, Starwood launched a lawsuit against Hilton, accusing the hotel company and two of its top executives (Ross Klein and Amar Lalvani) of stealing documents relating to Starwood's boutique brand W.
Both Klein and Lalvani, who were the key figures behind the development of Denizen, had previously worked for Starwood on the development of W hotels.
According to Reuters, under the terms of the settlement that are filed publicly with the courts, Hilton is banned for two years from hiring any Starwood employee for its luxury and lifestyle brand group, which includes Waldorf Astoria, Conrad and Astoria, as well as any new brands that are created.
Hilton is also banned from buying or franchising any Starwood Lifestyle Brand hotel that Starwood operates, and from launching a brand similar to Denizen.
In a statement, Starwood said the settlement requires Hilton to be "subject to an injunction to be supervised by monitors appointed by the federal district court to assure that the conduct that occurred does not occur again.
Frits van Paasschen, Starwood's CEO, said: “Starwood is proud of its leadership position in creating lifestyle brands that connect with consumers, drive loyalty and are highly profitable for our owners.
"Given the facts, we had no choice but to stand up and protect our brands on behalf of our investors, associates, owners and customers. This settlement reinforces this protection and restores a level playing field for fair competition."
www.starwoodhotels.com www.hiltonworldwide.com
In a statement, Starwood said the settlement requires Hilton to be subject to an injunction to be supervised by monitors appointed by the federal district court to assure that the conduct that occurred does not occur again.
Frits van Paasschen, Starwood's CEO, said: “Starwood is proud of its leadership position in creating lifestyle brands that connect with consumers, drive loyalty and are highly profitable for our owners.
"Given the facts, we had no choice but to stand up and protect our brands on behalf of our investors, associates, owners and customers. This settlement reinforces this protection and restores a level playing field for fair competition."