I have been tracking this case (Starwood vs. Hilton Hotels), as it has some really practical things to remember for every software or SAAS company regarding protecting their confidential and trade secret information (especially when some of your employees go to a competitor). As it was settled in December 2010, I can now (from the perspective of a software copyright attorney), give you some useful insights and takeaways.
Background: Without going through the long details, 2 top level employees of Starwood who worked on developing the W brand of hotels went to work for Starwood’s competitor (Hilton Hotels), and apparently took with them 100,000 documents. Hilton was planning on creating a similar boutique hotel brand to the Starwood W Hotels, and probably thought that hiring these Starwood employees would help them grow into the new market for boutique hotels. Well long story short, Hilton now cannot (by court order) develop–for 2 years–a competitive boutique hotel chain, must have federal monitors supervise their strategic decision marking, and (according to the NY Times) must pay Starwood $75 million (all of this before they even started competing with Starwood). All I can say is WOW. This is unprecedented, and simply started from hiring 2 Starwood employees.
Ok, so what do you need to know about protecting your confidential and trade secret information (at least from the perspective of a company that could lose its key employees to a competitor).
1) ‘Identify’ and ‘Mark’ Your Confidential and Trade Secret Information…