Club Factory Banned From Exploiting Snapdeal’s Trade Secrets, Contacting Their Clients

Disputes among e-commerce and consumer internet companies over sharing crucial information via their employees has been going on for a long time. 

A local court in Gurugram has forbidden Club Factory from sharing, divulging and using its rival Snapdeal’s trade secrets, financial data and confidential information.

In an order passed by Civil Judge Suyasha Jawa on February 11, Club Factory and one of its employees who is a former Snapdeal employee have been barred from using Snapdeal’s trade secrets in approaching, contacting, soliciting, enticing and inducing common clients, customers and business.

Read on to find out more…

What is the Fuss All About?

Gurugram-based company Snapdeal in its plea had alleged that its employee joined its competitor Club Factory and “in collusion” with each other, they had been seeking to entice clients and business partners of Snapdeal. Snapdeal also alleged that it was deliberately done to cause financial loss as well as loss of goodwill and reputation the company holds.

The court gave an ideal decision in favour of business ethics and also said that ex-employees shouldn’t leak or misuse information of confidential nature or disclose it to a competitor of his/her ex-employer.

The next hearing is scheduled on March 21, until then Club Factory is free to do its regular business, said the court in the order.

Fishy Chinese Business!

In the past, the China-based company, Club Factory had been accused of listing fake products on its platform and validating them as ‘CF verified’.

Lately the Indian government had also banned e-commerce packages disguised as gifts by the Chinese e-commerce companies like Club Factory, Shein and AliExpress. The government had already asked India Post, courier firms and customs to keep an eye on such shipments from China.

A while back, Zo Rooms and OYO had filed cases against each other alleging breach of trust, cheating, and misinterpretation of data. Meesho, a social commerce platform, had also served legal notice to nine ex-employees for joining its competitor GlowRoad.