Zoho Corporation PVT. LTD v. Freshworks, Inc.

Background

Zoho alleges that Freshworks obtained confidential and proprietary data from Zoho’s customer relationship management database and used it to solicit customers. Zoho’s claims include violations of the Defend Trade Secrets Act, the California Uniform Trade Secrets Act, and the Computer Fraud and Abuse Act.

Zoho moved for issuance of letters of request for international judicial assistance to obtain non-party discovery from Think Technology Services and ThinkUp Consultancy Services LLP, which the order identifies as entities in Mumbai, India. Zoho sought depositions and documents concerning the circumstances in which Freshworks allegedly transmitted Zoho data to the resellers, what data they used, how they used it, any resulting business benefit, remediation efforts, and preservation of relevant documents.

Zoho pointed to inconsistencies between Freshworks’ interrogatory answers and its document production. Among other things, Zoho identified additional emails, photographs, leads, and marketing activity that it said were not reflected in Freshworks’ earlier answers. Zoho argued that the resellers could provide firsthand information about the sharing and use of the data.

Freshworks stated that it had no objection in principle to the letters but argued that the motion should be denied because Zoho had not pursued the discovery diligently and because the requested information duplicated Freshworks’ production or could be obtained directly from Freshworks. Freshworks also argued that Zoho filed the motion to create a basis for extending the fact-discovery period.

Legal standard

The court explained that Federal Rule of Civil Procedure 28(b)(1)(B) allows parties to take depositions in a foreign country after a federal court issues a letter of request. The court also applied Rule 26(b), which permits discovery of nonprivileged information relevant to a claim or defense when the discovery appears reasonably calculated to lead to admissible evidence.

The court noted that the United States and India are parties to the Hague Evidence Convention. Under that convention, a discovery request may be sent from a United States court to India’s designated central authorities, including the Ministry of Law and Justice and the high courts in India’s states and union territories.

Court’s analysis

The court found that Zoho met its burden under the generally liberal standard for issuing letters of request. Both resellers were identified in Freshworks’ discovery responses, and the discovery produced to date indicated that they received information from Zoho’s database to solicit business for Freshworks. The court concluded that the resellers likely possessed relevant information about Freshworks’ use and sharing of Zoho’s data, related marketing and sales activity, and remediation efforts.

The court rejected Freshworks’ diligence argument. It acknowledged that Freshworks had identified the resellers in earlier disclosures and discovery responses, but it credited Zoho’s explanation that Zoho initially tried to obtain discovery directly from Freshworks and later found inconsistencies in Freshworks’ responses and production. The court also considered Zoho’s account that additional information was disclosed in March 2021, that Zoho engaged Indian counsel in early April 2021, and that approximately two months of delay resulted from Covid-related lockdowns in India. The court stated that the record did not show a lack of diligence by Zoho.

The court also rejected Freshworks’ argument that the discovery would be duplicative. It noted that Zoho sought depositions as well as documents, and that depositions could allow Zoho to question witnesses with direct knowledge and test statements made by Freshworks and its former employee. The court further stated that there was no guarantee the third parties lacked relevant information and that a third party did not need to possess unique information to be deposed.

Disposition

The court GRANTED Zoho’s motion for issuance of letters. It adopted the Letters of Request attached as exhibits to the declaration of Ryan J. Marton and directed the clerk to file the executed letters as attachments to the order. The order authorized the requested process for seeking discovery; it did not decide the merits of Zoho’s underlying claims.