Mumbai, April 16: A US grand jury has slapped two companies of the Tata group - Tata Consultancy Services (TCS) and Tata America International Corp - with a $940-million fine in a trade secret lawsuit filed against them.
After days of hearing, the federal grand jury in the US State of Wisconsin has ruled that Tata Consultancy Services and Tata America International Corp must pay $240 million to Epic Systems for allegedly ripping off its software.
The Tatas have also been asked to pay another $700 million in punitive damages.
TCS, which is India's largest software services firm, said there was no IP infringement in the Epic Systems case and planned to "defend its position vigorously in appeals to higher courts".
The Tata firm said it remained committed to protecting IP as well as its reputation and financial interests fully.
"While TCS respects the legal process, the jury's verdict on liability and damages was unexpected as the company believes they are unsupported by the evidence presented during the trial," TCS said in a statement.
Epic Systems Corporation (Epic) makes software for mid-size and large medical groups, hospitals, and integrated healthcare organisations.
The company had accused TCS and Tata America International Corp of "brazenly stealing the trade secrets, confidential information, documents and data".
Epic said the information downloaded by the TCS employees were "being used to benefit TCS's competing Med Mantra software" - a charge the Indian software giant has strongly refuted.
Epic first filed a lawsuit in October 2014 in US District Court in Madison, which was later amended in January and December 2015.
Epic said it maintains its confidential business information on computer systems that can be accessed only by authorised users.
In its complaint, Epic pointed out that it did allow third parties (customers and consultants working for customers) to access some information through its 'UserWeb web portal' to implement, integrate, or test its software at a customer facility. To gain access to this portal, a person must contact and register with Epic and agree to strictly protect confidential information.
"Rather than compete lawfully with Epic, TCS has engaged in an apparently elaborate campaign of deception to steal documents, confidential information, trade secrets, and other information and data from Epic, for the purpose of realising technical expertise developed by Epic over years of hard work and investment," the lawsuit said.
While TCS is not an Epic customer, it provides consulting to Epic's customers.
Epic said it "recently learned from an informant" that TCS employees have been "fraudulently accessing" Epic's software beyond what the consulting contract required. According to Epic, one TCS employee's account, which was used in India and several US locations, downloaded 6,477 documents.
It is expected that the trial judgment will be entered in the case in the next six to eight weeks, following which the parties can file an appeal within 30 days of the judgment being filed.
The jury verdict will not have any impact on the fourth quarterly results which will be announced on April 18, TCS said.
