Trade Secrets: Hilton Looking at Criminal Charges?

More news on the Hilton case I wrote about in Ying and Yang of Protecting Trade Secrets. This comes from The Wall Street Journal Law Blog.

In Trade Secrets Flap, Might Criminal Charges Be Heading Hilton’s Way?

The latest big case involving allegations of corporate espionage involves Hilton Hotels and Starwood Hotels. We first heard about it last week, when Starwood, which runs the W line of hotels, among others, filed suit against Hilton and two former Starwood executives, alleging that the executives, who ultimately went to work for Hilton, smuggled more than 100,000 documents and electronic files out of Starwood — and that Hilton used the information to create a new luxury hotel brand, called Denizen.

he news out today: Hilton said it recently received a federal grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York asking for documents relating to the situation. Click here for the story, from the WSJ’s Tamara Audi.

Hilton said Tuesday it is temporarily suspending development of Denizen as a precautionary move. The brand has not opened yet, but Hilton was actively pursuing contracts and development deals and planned to open the first Denizen in 2010.

Hilton has also placed two high-ranking employees named in Starwood’s suit, Ross Klein and Amar Lalvani, on paid administrative leave “pending Hilton’s review of the situation,” according to a statement. The hotel company has also placed its luxury and lifestyle development team—many of them former Starwood employees—on paid administrative leave.