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Zoho files fresh complaint against Freshworks for allegedly accessing its database

Saransh Pandey

Intern
  • December 01, 2020
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    The two startups in India have been involved in a legal battle for a long time, and in March, Zoho Corp filed a lawsuit against Freshworks for ‘Trade Secret Misappropriation’, also in the US.

Chennai-based SaaS startup Zoho has filed another complaint against its rival Freshworks in a US district court. According to reports, Zoho accused Freshworks of accessing its database on purpose without authorisation and obtaining information through one of Freshworks’ employees. The company has also reportedly asked for a formal discovery process, a formal process of exchanging information into how much unauthorised access Freshworks has allegedly had, and to investigate if more employees have done something similar.  

The two startups in India have been involved in a legal battle for a long time, and in March, Zoho Corp filed a lawsuit against Freshworks for ‘Trade Secret Misappropriation’, also in the US. The founders of Freshworks, Girish Mathrubootham, and Shan Krishnasamy, are former employees of Zoho. At the time, it had accused Freshworks of building its business by stealing and misusing Zoho’s financial information, and of poaching employees.  

Four months later, in August, Freshworks filed a plea for the complaint to be dismissed, stating that Zoho’s petition lacked "specificity and particularity" about the allegations. It had said that Zoho had grounds for its allegation that Freshworks employee Arjun Ravikumar accessed the database many times, but the case can be limited to that of a single employee. 

In October, the US district court in the Northern District of California denied the motion to dismiss the complaint and said that Zoho has “clearly met the standard for pleading trade secret misappropriation.” Freshworks used the trade secret, which involved the actions of one Freshworks employee, Arjun Ravikumar.  

It also added that some of Freshworks’ arguments about allegations don’t deal specifically with allegations about Ravikumar’s unauthorised use of CRM data would not state a claim of misappropriation of trade secrets don’t stand on their own.  The order stated that Freshworks seems to be attempting to limit the scope of discovery. Reportedly, at the time, Zoho was directed to file a fresh complaint, and Freshworks would get time till December 7 to respond.  

In its current complaint, Arjun Ravikumar reportedly admitted under oath that he got access to Zoho’s CRM and uploaded spreadsheets to Freshworks’ CRM, which included 4,000 leads taken from Zoho’s CRM, according to fresh reports. 

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