Facts

Zoho Corporation is a California corporation with its principal place of business located in Pleasanton, CA. It is a wholly-owned subsidiary of Zoho Corporation Pvt. Ltd., which is an Indian corporation engaged in the marketing and selling of web-based business software and information technology tools. Freshworks, Inc is a Delaware corporation with its headquarters located in San Mateo, CA. Freshworks was founded by two former Zoho employees. As part of its business, Zoho maintained a customer relationship management database, which housed confidential information including customers' purchasing history, email addresses, and product preferences. All of this information was gathered over Zoho's two-decade history of doing business. In 2020, Zoho discovered that its CRM database had been illegally accessed, and the Freshworks Regional Head, Mallikarjun "Arjun" Ravikumar, had contacted Zoho customers using information that was only obtainable from Zoho's CRM. Based on this discovery, Zoho filed suit against Freshworks for trade secret misappropriation.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that Defendant had misappropriated its trade secrets by having its employee illegally access the CRM database; that Defendant had a history of misusing Plaintiff's trade secrets; that Defendant violated the California Uniform Trade Secrets Act; and that Defendant had violated the Computer Fraud and Abuse Act.

DEFENDANT'S CONTENTIONS: Defendant contended that it had not accessed Plaintiff's database; that it had not directed any employee or agent to access the database; and that Plaintiff's claims were untimely.

Result

Following the filing of the lawsuit, Freshworks determined that a now-former Freshworks sales employee, using his spouse's computer without her knowledge, wrongfully accessed and used Zoho confidential information relating to sales leads. Freshworks has taken steps to remediate any harm caused and agreed to take steps to make sure that nothing like this happens again. Freshworks and Zoho settled the litigation, and Zoho dismissed the lawsuit.