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Updated: Delhi HC issues stay order against Zostel for alleged copyright theft from OYO Rooms


Update: OYO Rooms told MediaNama: What has happened to us is very disappointing at many levels and compelled us to act to protect our company and the wider ecosystem. Since the matter is sub-judice, it is not possible to comment further.

Earlier: The Delhi High Court has issued a stay order against online hostel aggregation platform Zostel, based on an alleged copyright material theft complaint filed by rival Oravel Stays Pvt Ltd, which runs branded budget hotel rooms marketplace OYO Rooms, reports The Economic Times.

The report mentions that OYO Rooms has alleged that Zostel’s recently launched hyperlocal hotel rooms booking platform Zo Rooms is based on data copied from them. Apparently, OYO Rooms produced emails and CCTV footage to claim that some of its employees stole proprietary software from the company, and left to join Zostel.

The ET report mentions that Justice Indermeet Kaur, in her order, said that “access to confidential information such as documents for operations and central reservation systems software by external parties especially Defendant (Zostel) can impact revenue of Plaintiff (Oravel).” The copy of the court order is not yet available on the Delhi HC portal. We’ll update once the order is uploaded on the site. The next hearing of the case is scheduled for September 2, 2015.

It’s worth noting that Zostel co-founder Paavan Nanda told the publication that no illegality has been committed by them, and that they’ve the evidence to show that the case is false.

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We’ve reached out to Nanda and OYO Rooms founder & CEO Ritesh Agarwal, and will update once we hear back.

In June last year, Oravel had shut down its short stay accommodation booking site Oravel.com, and shifted focus to OYO Rooms. A few months earlier, it had raised an undisclosed amount of funding from Lightspeed Venture Partners and DSG Consumers Partners. Last month, the company raised a further Rs 150 crore from Greenoaks Capital and existing investors. On the other hand, Zostel had secured Rs 5 crore funding from Malaysia-based angel investor Presha Paragash in May last year.

Stayzilla-OYO Rooms trademark infringement: Interestingly, last month, Stayzilla and OYO Rooms had a nice Twitter slugfest on trademark infringement. OYO Rooms had used Stayzilla’s trademark and brand name for Google Adwords copy, which was a trademark violation as well as against Google’s advertising policy. However, the companies sorted out the issues – and had some fun along the way – on Twitter, without ever crossing the line.

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