US court levies $194 million penalty on TCS

BENGALURU: A US court has imposed a $194 million penalty on TCS for misappropriation of US IT services firm DXC‘s ((formerly CSC) trade secrets. The court said that TCS is liable to pay CSC $56 million in compensatory damages and $112 million in exemplary damages. The court also said TCS is liable for $25 million in prejudgment interest through June 13,.It also passed certain injunctions and other reliefs against TCS.
TOI had reported last year that the US jury said TCS accessed a trade secret by infringing CSC’s proprietary platforms. The latest award is a big setback to TCS after the US Supreme Court confirmed a punitive damages award of $140 million in the Epic Systems case for accessing its web portal without authorisation.
In 2018, TCS bagged a $2.5-billion deal from US-based insurer Transamerica to enhance its digital capabilities and simplify the service of more than 10 million policies into a single integrated platform. However, in June last year, Transamerica scrapped a $2 billion, 10-year deal with TCS citing the challenging macroeconomic conditions.
The DXC lawsuit in 2019 alleged that most of the former Transamerica/ MSI employees who were employed by TCS had been administering and processing policies at Transamerica / MSI using CSC software. The lawsuit cited emails exchanged between TCS employees to allege that they found the necessary solution in the Vantage software. Later, a TCS employee allegedly copied and pasted the actual Vantage source code pertaining to this calculation, and resulting Vantage calculations, into an email and sent it to his TCS colleagues. VantageOne and DXC Wealth Management Accelerator enable insurance functions including managing policies and creating new products.
TCS, a regulatory filing said, the judgement has no major adverse impact on its financials and operations.