ⓘ Featured image: Zoho founder Sridhar Vembu (L), Freshworks co-founder Girish Mathrubootham (R)
India’s software behemoth Zoho Corporation on March 17 filed a lawsuit against Freshworks for ‘Trade Secret Misappropriation’.
The case is on the desk of the US District Court Northern District of California accusing Freshworks for violating the Defense of Trade Secrets Act; the California Uniform Trade Secrets Act; the International Interference with Prospective Economic Relations; Conversion and Unjust Enrichment.
Both privately-held companies headquartered in US with major employee base in Chennai, India. Zoho was started in 1996 by Sridhar Vembu and currently has around 9,800 employees. Freshworks was started by the two former employees of Zoho, Girish Mathrubootham and Shan Krishnasamy in 2001 that currently has around 2,800 employees. Mathrubootham was the VP, Product Management for a product called ManageEngine at Zoho before he founded Freshworks.
The basis to the lawsuit
The lawsuit filed by Zoho against Freshworks claims that:
- Freshworks has built its business through theft and misuse of Zoho’s confidential business information.
- Freshworks secured initial funding by using Zoho’s non-public financial information and engaged in poaching Zoho’s employees since then.
- Freshworks is using Zoho’s confidential customer and competitive marketing information.
- Freshworks plans press releases at the same of Zoho’s product launch dates and pressurises Zoho’s business partners to disclose confidential customer information.
- Girish Mathrubootham initially included Zoho’s confidential revenue figures in investor pitch materials to secure funding, capitalised on his work at Zoho – bragging that his startup would perform like Zoho.