A fast-growing wellness technology company has been hit with a major lawsuit worth $100 million. The claim comes from the original creator of the company’s core source code, who says the firm used his work without proper credit, license, or payment. The case is gaining national attention as it highlights rising tensions in the booming health-tech sector.
The company, known as WellnessTech, has made headlines in recent years for offering AI-powered health tracking, stress monitoring, and virtual fitness coaching through wearable devices and mobile apps. According to Statista, the global wellness tech market is expected to reach over $600 billion by 2030. Companies in this space use software to promote physical and mental well-being.
WellnessTech’s mobile platform allows users to measure heart rate variability, sleep cycles, posture, and even mood through machine learning algorithms. It has millions of downloads and recently secured $80 million in funding from top investors. But now, its future could be at risk.
The lawsuit was filed by Raj Mehta, a seasoned software developer based in San Francisco. Mehta claims he developed the original source code used by WellnessTech during its early prototype phase back in 2021. According to the complaint, Mehta was brought on as a freelance developer when the company was still in stealth mode. He alleges that the startup promised him compensation and recognition, but later cut ties and continued using his code.
In his words, “They built their empire on my code. Now they act like I never existed.”
His legal team has filed a lawsuit in the U.S. District Court for the Northern District of California, demanding $100 million in damages for breach of contract, copyright infringement, and violation of intellectual property laws.
Mehta’s legal filing, which has now been made public, lists several key claims:
Read more about similar copyright battles in tech here.
In response to the lawsuit, WellnessTech released a brief public statement:
“We strongly deny these allegations and are confident that we will prevail in court. The claims are baseless, and the source code in question is the result of collaborative work from multiple engineers employed by WellnessTech.”
The company’s legal team is also preparing to file a countersuit, arguing that Mehta’s work was never formally submitted under a contractual agreement and that the intellectual property belongs to the company as a “work for hire.”
Legal experts say the case may have far-reaching consequences for startups, especially those in the software and wellness industries.
According to Harvard Law Review, IP conflicts involving freelance developers are becoming more common as early-stage companies often rely on informal arrangements before formal incorporation.
Dr. Melissa Browning, an IP law professor, commented:
“This lawsuit is a wake-up call for all tech startups. Document your agreements clearly. In the excitement of building a product, companies often ignore IP ownership, which can backfire.”
As wellness tech continues to grow, so do the legal complexities. From AI health monitoring to personalized data tracking, startups are built on layers of intellectual property. Without formal licensing and contracts, companies risk legal exposure.
This lawsuit reminds entrepreneurs that early technical contributions—whether from interns, freelancers, or consultants—must be legally secured through contracts, NDAs, and equity agreements.
A similar case occurred in 2022, when another health app faced a $50 million lawsuit over unpaid work contributed by a former CTO. That case was eventually settled out of court but cost the company significant public trust and investor confidence.
Learn how IP laws are evolving in digital health here.
The legal proceedings are expected to take months. Both parties have until July to submit additional evidence. A preliminary hearing is set for August 15. If no settlement is reached, the case could proceed to a full trial by the end of the year.
Meanwhile, WellnessTech is trying to stay focused on its product development and user growth. It recently announced a new partnership with a leading fitness apparel brand and continues to roll out new features for its wellness app.
But industry watchers say the shadow of this lawsuit may be hard to ignore. With $100 million on the line, the company could face major reputational and financial damage—especially if more former collaborators come forward with similar claims.
The case of Raj Mehta vs. WellnessTech is more than just a legal battle—it’s a cautionary tale for the entire startup world. As innovation speeds up, proper legal groundwork becomes not just a necessity but a survival tool. Startups must balance rapid growth with legal responsibility to avoid lawsuits that could ruin everything they’ve built.
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