TCS Ordered To Pay $194 Million For 'Misappropriation Of Trade Secrets'

IT major Tata Consultancy Services has received an adverse judgment from a US court to pay $194 million in penalties for "misappropriation of trade secrets" of IT services firm DXC Technology Company (previously CSC), according to an exchange filing. 

A Dallas court has ordered the company to pay $56 million in compensatory damages and $112 million in exemplary damages to DXC. The court also assessed that the company is liable for $25 million in prejudgment interest upto June 13, and has passed certain injunctions and other reliefs against the company.

According to the court order, TCS is liable for misappropriation of trade secret under the Defend Trade Secrets Act of 2016.

The company in its filing said that it believes it has strong arguments against the judgement and is taking necessary steps to protect its interest through review or appeal. The judgement however has no major adverse impact on its financials and operations, it added. 

This comes after TCS was confirmed to have been awarded $140 million in punitive penalties in the Epic Systems case in 2022. The company had claimed that TCS had stolen its intellectual property following the execution of an agreement to use Epic's healthcare software.

In November, a jury had found TCS to be liable to pay penalties worth $210 million in the case filed by DXC. At the time TCS had said that further orders in the matter would be decided by the court.

In the suit, filed in 2019, DXC had alleged that TCS had gained access to the former's software source code and created its own competing insurance platform. This was done after gaining access to the source code through 2,200 Transamerica employees in 2018, the US-based company alleged.