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The startup universe is unpredictable. Things rarely ever stay the same for long here. One moment everything seems fine, the other a startup finds itself in the middle of a dispute and/or a legal battle. It has become a norm for most startups to have run ins, either with competitors, investors, governments or amongst themselves. Seems like these busy bees can’t go on without stirring things up from time to time as more of such tussles are expected to follow.

Whatever be the reason, the fact remains that these mostly lead to unnecessary legal hassles which might hamper their progress. But, in doing so, they also serve as lessons for budding startups as to what not to do. So, read on as we list some interesting startup tussles that not only satisfy your entertainment quota (because who doesn’t enjoy a good fight?) but also serve as lessons to not follow in their stead.

The most talked about startup legal disputes -

1. Ola-Uber

The Ola-Uber battle raged when Uber sued Ola alleging that Ola used fake customer accounts to book and cancel Uber rides using numbers that do not exist.

In its petition, Uber claimed that the fake booking and cancellation resulted in cancellation expenses being borne by them. It also affected their driver pool resulting in many of them leaving, they said.
All the while, the accused continued to deny all such claims.

“Such fights are obvious thing for startups and we are going to see it more in coming time with proliferation of startup culture,”said Abhay Shankar, Lead-Partner (India)- Dispute Resolution at Kaden Boriss.

Apparently, Uber isn’t the only competitor miffed by Ola over the whole fake booking technique. Jugnoo, an auto-rickshaw hailing app has made the same allegations against Ola. Jugnoo released a blog underlining the same titled, ‘Ooh la la!’ providing the details of the basis of their allegations.

You can read the whole stories of these disputes here at –
Why legal battles among Indian tech startups are here to stay: deciphering the Ola-Uber legal battle
Who’s crying, ‘wolf?’ Ola, Uber or now Jugnoo?

2. OYO-ZO

This legal battle raged before the delhi High Court late in 2015 when the owner of OYO-rooms, Oravel Stays Pvt. Ltd. filed a complaint against Zostel’s ZO rooms for copyright theft. They claim that few of their employees revealed sensitive company information to ZO rooms after quitting Oravel to join Zostel.

Zostel of course denied all allegations and said it was a scam to kill competition by the plaintiff. This legal mess was only somewhat cleaned later when OYO acquired ZO in 2016.

You can read about the messy details of the matter here.

But, OYO rooms has not always been on the accusing side. A copyright controversy raged last year when competitor Stayzilla alleged that OYO used their brand name and trademark in their Google Adwords advertisement.

You can follow the twitter battle here.

3. Freshmenu-Innerchef

Dispute arose as Gurgaon-based InnerChef accused Bangalore-based FreshMenu of using their name in FreshMenu’s search ads without permission.

InnerChef pulled in Google Adwords by sending them a mail regarding FreshMenu’s deceit. This matter was further elongated on twitter following which FreshMenu apologized on the same platform and took down their advertisement immediately.

You can follow the story of how the entire dispute panned out here.

4. Uber v/s Karnataka government

Legal battle raged between San–Franciscan cab aggregator Uber and the Karnataka government over issuance of license. While Ola’s application for license was accepted, Uber’s application for the same wasn’t. Further, the rejection of license was followed by impounding of cabs and charging heavy fines by the government.

This licensing struggle in Karnataka is nothing new, as earlier a challan was filed against Uber in Delhi District Court for illegal operation. The Court ordered Uber CEO and India Head to appear before it.

You can read all about Uber’s struggle with Indian government here.

5. OYO-Noesis

OYO rooms owner Oravel just can’t stay out of trouble. Following the above controversies, another raged in April this year when Noesis Capital Advisors, a hospitality advisory firm filed a petition against Oravel for non-payment of dues.

They claim that the startup failed to pay despite using their services in their initial stages. OYO replied in a statement stating that Noesis breached contract and thus is not entitled to any payment. As many other accusatory startup battles this too remains vague and messy but must surely be a cause of some unwarranted headache for the budget room provider.

You can follow the whole story of the dispute here.

6. Houzify-Houzz

Things got messy on an international level for Bengaluru-based home-décor startup, Houzify received a legal notice alleging copyright infringement due to similar sounding brand name from Palo-Alto based décor company Houzz.

Matters were further brought to a head when social networking giant Facebook decided to meddle in favouring the Palo-Alto based company. Facebook removed Houzify’s business page without warning or consultation resulting in the loss of marketing platform for the latter.

Houzify in its defense said that the words ‘house’ and ‘-ify’ that made up their brand name are generic terms open to use by everyone.

You can read a detailed account of the dispute along with people’s opinion here.

7. Flipkart v/s Flipkart discounts

Bangalore-based e-commerce firm Flipkart filed a copyright and trademark infringement case against copycat firm ‘FlipkartDiscounts’. The accused provides several listings on its site and re-directs customers to various e-commerce platforms.

The court ruled in favor of Flipkart ordering the aggressor to stop providing links to these e-commerce portals.

A Flipkart spokesperson stated, “The court has granted an injunction against the website from operating under the current name and transfer the same to any third party.”

This type of copyright and trademark clashes are seen in abundance these days as most of these brand names are made up of generic terms that are easily copied with little variance by ambitious up and comers. The next point enlists a few such cases.

You can read more about this dispute here.

8. BookMyShow, Naukri.com, etc similar name copyright issue

Many major startups are complaining about smaller competitors copying their brand names. This is when these new entrants have names that sound similar to the already existing big brands in the sector.

This has become a matter of concern for many such big brands and they are not retaliating against this sneaky copyright and trademark infringement by these newbie startups. Some examples of such similar sounding brand names are – BookMyShow-Bookmyoffer, Groffr-Grofers, Naukri.com-Naukrie.com, Shaadi.com-Secondshaadi.com, etc.

This is a time-wasting dispute that often results in no action as these are generic terms and thus open to public use.

There was a similar dispute last year where Snapdeal was copied by a Pakistani ecommerce store Snapdeal.pk, which copied everything from the design to the very logo. These types of copyright thefts are bound to occur in the future and cause unnecessary legal tussles in the startup world.

Read more about copyright and trademark disputes here.

9. Qikpod founders dispute

Qikpod, funded by Ravi Gururaj, saw fallout between founders Ravi and Neeraj Ray over ownership issues. Neeraj filed an injunction suit accusing Ravi of not giving him the promised equity.

Following the filing of the suit, a Bangalore civil court ordered the startup to refrain from launching their new product until the suit was resolved. But this order was overpowered by a stay by the High Court of Karnataka, allowing Qikpod to work on delivering their product to their clients while the proceedings are under way.

Read the whole story here.

Conclusion

There unnecessary and unwarranted legal hassles can prove very detrimental to your startup growth. You may sometimes accidentally be the one who causes the trouble or you may be the one facing them, in both scenarios, solid advice and a clear action plan is of most importance.

Getting a lawyer onboard would be your only step once you are in trouble, getting a lawyer onboard earlier though, would save you all the trouble.