The poster boys of the Software-As-A-Service (SaaS) industry in India are locked in a legal battle. Zoho Corporation has filed a lawsuit against Freshworks (formerly Freshdesk) for ‘Trade Secret Misappropriation’ in the US, reports Hindu Business Line.
Incidentally, Freshworks was founded by Girish Mathrubootham and Shan Krishnasamy, who were former employees of Zoho.
In a lawsuit filed in the US District Court Northern District of California on March 17, Zoho has 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.
As per the report, as the VP of product management for Zoho’s IT Management software ‘ManageEngine’, Girish reportedly was privy to information on tools required for efficient customer support. And incidentally, Freshworks’ first project was a prototype for a customer support tracking and management software.
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.
“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,” the HBL report quotes the lawsuit as saying.
Accordingly, Zoho has 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.