US Court Asks TCS To Pay $210 Million In Trade Secret Row

This development took place barely a week after the US Supreme Court confirmed a penalty of $140 million against TCS

India’s largest IT services firm Tata Consultancy Services (TCS) has been asked to pay $210 million to DXC Technology by a Texas court in a trade secret row. This development took place barely a week after the US Supreme Court confirmed a penalty of $140 million against TCS. According to a report by Moneycontrol, the case was filed by Computer Sciences Corporation (CSC), which became DXC Technology after a merger with HPE’s enterprise services business.

A jury in Dallas, Texas federal court, found the Indian firm guilty of misusing confidential information about DXC's Vantage-One and CyberLife software for managing life insurance and annuity policies to create its own platform.

In a statement, TCS spokesperson said, "TCS respectfully disagrees with the jury’s advisory verdict. The matter will now be decided by the court, which has ordered further briefing from the parties. We plan to continue to litigate this ongoing case. We will have no further comment as the case remains pending." As per the report, the jury had earlier said TCS owed DXC $70 million for misappropriating its trade secrets and an additional $140 million as its misuse was "wilful and malicious."

The case was filed by CSC in 2019, claiming that TCS hired 2,200 employees of Transamerica in 2018, through whom it got access to CSC's software, knowledge of its source code and other proprietary information to build a competing life-insurance platform. CSC had licensed its software to Transamerica.

The IT major had bagged a 10-year $2-billion deal with Transamerica Life Insurance in 2018. The deal was cancelled earlier this year, citing challenging market environment for the insurance company as it looked to tighten tech spending.

Last week, TCS said it would take a hit of $125 million in Q3 earnings over a similar lawsuit by Epic Systems. The US Supreme Court upheld a fine of $140 million against TCS for stealing its intellectual properties to develop its own offering.

Meanwhile, TCS has logged an 8.7 per cent increase in its September quarter net profit to Rs 11,342 crore, but made it clear that the headwinds for the IT sector continue amid a sluggish economic climate. Its revenue increased 7.9 per cent in the September quarter to Rs 59,692 crore but was up only marginally compared to Rs 59,381 crore in the preceding June quarter. Tata Group firm also announced a Rs 17,000-crore share buyback on top of committing a nearly Rs 3,300-crore dividend payout.