Ex-employer threatening legal action over “similar SaaS product” — how serious is this?

[User_7dda8d3a]

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User_7dda8d3a
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April 27, 2026 at 7:09 pm

I’m a co-founder of a SaaS product (CRM space), and I’m trying to understand how serious my situation is and what I should do next.

About 2 years ago, a colleague and I left our jobs at a SaaS company. We decided to build our own product in the same space. Naturally, we had learned a lot while working there, so our product was inspired by similar workflows and concepts, but it’s built from scratch, with a completely different tech stack.

Important context:

* This is a CRM product — many tools in this space share similar features and workflows.
* We did not copy code or use any internal company resources.
* We spent ~2 years building this ourselves.

Recently, one of their clients discovered our product and shared it internally. That same day, we suddenly got ~50 signups from their organization.

Later that day, I got a call from their HR saying they found out about our product and wanted us to take it down or face legal action.

We’re early-stage so to avoid conflict, we temporarily took down our domain and started moving users elsewhere.

After that, they scheduled calls with us (HR + engineering + product team). Their claims:

* We “copied” their product
* Two people couldn’t have built this without insider help
* Someone must have shared code internally

To defend ourselves, we made a mistake (in hindsight), we offered them access to our codebase to prove it’s different. They took ~2 weeks to review it although they said it’d only take them 2 days.

In the follow-up call few days ago, instead of discussing code similarities, they demanded:

1. A formal apology letter
2. All revenue we’ve made so far
3. Proof that we’ve shut down the product (including client emails and confirmations)

They also mentioned things like cybercrime complaints and FIRs but didn’t cite any specific legal clauses.

From our perspective:

* Codebase is completely different
* Only similarity is in product workflows (which are common in CRM tools anyway)
* No proprietary code or data was used

Now I’m unsure how serious this is and how to respond.

**Questions:**

* Am I actually at legal risk here?
* Can similarity in product workflows be grounds for action?
* Did giving them code access put me in a worse position?
* Should I engage further, ignore them, or get a lawyer immediately?

Any advice from founders or people familiar with Indian startup/legal situations would really help.

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