Sridhar Vembu-promoted software as a service (SaaS) major Zoho has filed a case against Freshworks—a Unicorn helmed by Girish Mathrubootham and backed by fund houses such as Sequoia Capital and CapitalG—in a US court, alleging stealing of its trade secrets and willfully converting its confidential and proprietary information to gain advantage in software development and sales.
Zoho in the complaint filed before the United States District Court, Northern District of California, on March 17, 2020, alleges that from its inception by two former Zoho employees, Girish Mathrubootham and Shan Krishnasamy, Freshworks has built its business up on theft and misuse of Zoho’s business information.
Zoho has slapped a complaint of trade secret misappropriation against Freshworks, seeking relief under violation of defense of trade secrets Act and California uniform trade secrets Act, and for international interference with prospective economic relations, conversion and unjust enrichment. Though both Zoho and Freshworks have genesis from Chennai, the companies have global operations headquartered in the US.
According to the complaint, Freshworks secured initial funding through use of Zoho’s non-public financial information and since engaged in a systematic practice of poaching Zoho’s employees besides using Zoho’s confidential and competitive marketing information, planning press releases to coincide with Zoho’s undisclosed product launch dates and pressurising Zoho’s business partners to divulge Zoho confidential customer information.
From 2001 to 2010, both Mathrubootham and Krishnasamy worked with Zoho. In October 2010, both departed Zoho to form Freshworks.