The socialite attended a hearing in New York on Monday (April 30) as the two parties argued over an agreement which never came to fruition.
Hilton agreed a five-year deal with Le Bonitas to create a line of briefs, pyjamas and swimwear. However, the project failed for unknown reasons.
The 31-year-old is trying to claim money from Le Bonitas, but the firm is also seeking a financial settlement from her in a counter-claim.
The star showed up to federal court, where lawyers argued key issues for each side. However, a judge refused to rule in favour of either party and encouraged them to settle out of court.
A source told TMZ that Hilton attended the hearing because she wants the court to know how important the case is to her and her personal brand.
Hilton is suing for more than $1.5 million (£924,352) - the amount she was supposed to earn in royalties, while Le Bonitas is claiming for more than $200,000 (£123,247).
In the event that Hilton and Le Bonitas are unable to settle out of court, the case will be heard by a jury later in the year.