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Tata Consultancy Services slapped with $194 million penalty by US court for trade secret breach

The order against TCS is in relation to a suit filed by Computer Sciences Corporation (CSC), which is now known as DXC Technology Company (DXC)

Our Special Correspondent Mumbai Published 17.06.24, 08:18 AM
Representational image

Representational image File picture

A US court has levied a total penalty of $194 million (1,600 crore) on Tata Consultancy Services (TCS) for the alleged misappropriation of trade secrets.

This was disclosed by the country’s largest IT services firm in a recent regulatory filing.

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The order against TCS is in relation to a suit filed by Computer Sciences Corporation (CSC), which is now known as DXC Technology Company (DXC).

In 2017, Hewlett Packard Enterprise (HPE) had announced the formation of DXC Technology, an independent, end-to-end IT services company, following the merger of CSC with the enterprise services business of HPE.

``The company has received an adverse judgement passed by United States District Court, Northern District of Texas, Dallas Division. The company believes that it has strong arguments in the matter and intend to defend its position through review petition/appeal to the appropriate Court,’’ TCS told the stock exchanges.

TCS added that the suit filed by CSC/ DXC alleged misappropriation of its trade secrets. The court ordered that TCS is liable to CSC for $56.15 million in compensatory damages and $112.30 million in exemplary damages.

TCS, however, said it has strong arguments against the judgment and is taking necessary steps to protect its interest through review or appeal.

It also noted the order will have no major adverse impact on its financials and operations.

CSC had filed the case in 2019: it alleged it had licensed its software to Transamerica subsidiary Money Services Inc.

TCS had secured a $2 billion contract with Transamerica in 2018 and hired 2,200 Transamerica employees.

CSC alleged that through the employees TCS came to know about the details of CSC’s software.

These details were used by TCS to create a competing insurance platform.

Earlier in June 2023, Transamerica had ended its decade-long deal with TCS, ahead of schedule.

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