On 26th November (local time), India’s IT industry giant Tata Consultancy Services (TCS) was ordered to pay $210 million (₹1750 crores) in damages to DXC Technologies (formerly known as Computer Sciences Corporation/CSC) by a Texas federal court jury.
As per reports, the jury found TCS guilty of misappropriating DXC’s trade secrets to develop its insurance software platform. The case against TCS was filed in 2019. It was based on two insurance software platforms developed by CSC, Vantage-One and CyberLife.
These software platforms were used to manage large annuity and life insurance policy portfolios. TCS won a $2 billion deal from Transamerica in 2018. DXC’s predecessor, Computer Sciences Corp, filed a lawsuit against TCS, claiming that the software was licensed to Transamerica subsidiary Money Services Inc, in its complaint.
DXC alleged that TCS gained access to the company’s trade secrets by hiring several former CSC employees who worked on CyberLife and Vantage-One platforms. According to DXC, these employees provided confidential information about the platform used to develop its insurance platform, which is known as TCS BaNCS.
Notably, the complaint pointed out that a TCS employee “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”. It was alleged that the goal was to “determine what the calc is/should be doing to provide to the BaNCS team.”
The lawsuit against the Indian tech giant pointed out that the deal with TSC was for third-party administration and not for accessing the source code. Furthermore, the complainant pointed out TCS’s alleged history of Misappropriating sophisticated business software.
Citing the example of Epic, a healthcare software provider, the CSC said, “Misappropriating sophisticated business software is, apparently, TCS’ method of entering new business markets in the United States.”
It added, “TCS entities accessed Epic’s web portal without authorization while servicing a mutual client.” Epic case also went against TCS and the jury awarded Epic substantial damages in 2017.
In its verdict, the jury found that TSC accessed CSC’s trade secrets using “improper means” and the use of the information was “malicious and wilful”. On the other hand, TCS has denied the allegations and said it would appeal the jury’s verdict.
The company maintained that the BaNCS platform was developed independently and did not break any intellectual property law. A TCS spokesperson said, “TCS respectfully disagrees with the jury’s advisory verdict. The Court will now decide the matter which has ordered further briefing from the parties. We plan to continue to prosecute this ongoing case. We will have no further comment as the case remains pending.”
Earlier in June this year, Transamerica ended its 10-year deal with TCS, two years ahead of schedule. Transamerica is reportedly shifting to an in-sourced model instead of outsourcing the services to a third party.
