Four months after one of India’s major Software-As-A-Service (SaaS) companies Zoho filed a complaint against rival Freshworks for trade secret misappropriation in the US, the latter has filed a plea a US court for it to be dismissed, stating that Zoho’s petition lacked "specificity and particularity" about the allegations, according to the Economic Times.
Freshworks was founded by Girish Mathrubootham and Shan Krishnasamy, who were former employees of Zoho. Zoho alleged that Freshworks stole confidential customer data.
In a lawsuit filed in the US District Court Northern District of California on March 17, Zoho reportedly accused Freshworks of building its business by stealing and misusing Zoho’s financial information that was not public. It also accuses the company of poaching Zoho’s employees.
A report stated that Girish, who at Zoho was the VP of product management for their IT management software was privy to the information, and a similar tool was the first project of Freshworks.
Girish then allegedly used Zoho’s confidential revenue and pricing figures while making investor pitches to raise initial funding for Freshworks, while also suggesting that Freshworks would be like Zoho.
According to the ET report, Freshworks in a response alleged that Zoho was expanding on one alleged incident into a case of trade secret misappropriation.
Zoho’s original lawsuit reportedly said: “It is using Zoho’s confidential customer and competitive marketing information, planning press releases to coincide with Zoho’s undisclosed product launch dates, and pressuring Zoho’s business partners to divulge confidential customer information.”
Zoho accused Freshworks of violating the Defense of Trade Secrets Act; the California Uniform Trade Secrets Act; the Intentional Interference with Prospective Economic Relations; Conversion and Unjust Enrichment.
Zoho was founded in 1996 by Sridhar Vembu and Tony Thomas as SaaS company. Though headquartered out of the US, the company has most of its operations out of Chennai.
Meanwhile, Freshworks was founded in 2001, then called Freshdesk, also as a SaaS company. It also has most of its operations in Chennai.