Tata Consultancy Services (TCS), one of India’s leading IT services companies, has been ordered to pay a significant fine of $210 million to DXC Technology in a trade secret lawsuit. A jury in a federal court in Dallas on 21 november ,Texas, found TCS guilty of misappropriating trade secrets from DXC’s Vantage-One and CyberLife software, which are used for managing life insurance and annuity policies. TCS allegedly used this confidential information to develop a competing life insurance platform.
The lawsuit’s origins trace back to 2019 when Computer Sciences Corporation (CSC), which later became DXC Technology through a merger with HPE’s enterprise services business, filed a legal action against TCS. The claim involved TCS hiring over 2,200 employees from Transamerica in 2018, through whom it allegedly gained unauthorized access to CSC’s software. This access reportedly provided TCS with insights into the source code and other proprietary information, aiding in the development of a competing platform.
The jury’s verdict included a $70 million payment for the improper use of DXC’s trade secrets, with an additional $140 million due to the misuse being deemed “willful and malicious.” This decision highlights the gravity of the accusations, suggesting not only an infringement of trade secrets but also a deliberate and malicious intent in the misuse of these assets.
TCS has expressed disagreement with the jury’s advisory verdict and plans to continue litigating the ongoing case. The company’s statement indicated that the matter would now be decided by the court, which has ordered further briefing from the parties involved.
This legal battle comes in the wake of another case involving TCS, where the U.S. Supreme Court confirmed a penalty of $140 million against the company for misusing trade secrets from software maker Epic Systems to develop competing healthcare software. Additionally, Transamerica Life Insurance canceled a 10-year, $2-billion deal with TCS earlier this year, citing a challenging market environment and tightening tech spending.
The series of legal challenges and their financial repercussions highlight the complexities and risks associated with intellectual property and trade secrets in the highly competitive IT services industry. For TCS, these cases not only represent significant financial liabilities but also bring attention to the ethical and legal standards in the conduct of business in the global technology sector.