TCS fined $194.2 million for Alleged Misappropriation of Trade Secrets

Tata Consultancy Services (TCS) has been slapped with a hefty fine of $194.2 million by a US District Court for alleged misappropriation of trade secrets. The case was filed by Computer Sciences Corporation (CSC), which has since merged with DXC Technology Company (DXC), accusing TCS of stealing its trade secrets.

In response to the court order, TCS has announced that it will appeal the ruling and file a review petition. The Mumbai-based software services company disclosed the court order to the Stock Exchange Board of India (SEBI) in a filing to the Bombay Stock Exchange (BSE).

According to details from TCS’ BSE filing, the court has ordered TCS to pay $56,151,583 in compensatory damages, $112,303,166 in exemplary damages, and $25,773,576.60 in prejudgment interest. The court also issued certain injunctions and other reliefs against the company.

TCS has stated that the judgement will not have a significant impact on its financials and operations. The company has vowed to defend its position vigorously, stating that it has strong arguments against the ruling.

The trade secret case against TCS dates back to 2019 when CSC, which later became part of DXC, accused TCS of misusing its software after licensing it to a Transamerica subsidiary. TCS had secured a $2 billion contract with Transamerica, and the lawsuit alleged that TCS used the access to the software to create a rival insurance platform.

This legal battle has had financial repercussions for TCS, with Transamerica terminating its agreement prematurely in June 2023. TCS also had to provision $125 million in the December quarter following a legal defeat and claim from Epic Systems.

Overall, this ruling against TCS underscores the importance of protecting intellectual property and trade secrets in the competitive IT industry. TCS has vowed to fight the judgement and protect its interests through the appeals process.