‘Trade secret’ lawsuit: US court slaps $940 million fine on two Tata firms

Tata refutes charges, to go for appeal in higher courts

By: ENS Economic Bureau | Mumbai | Updated: April 17, 2016 1:29 am
Tata, TCS, Tata group, Tata Consultancy Services, Tata America International Corp, Tata trade secret case, trade secret case, business news, india news TCS said it “did not misuse or derive any benefit from downloaded documents from Epic System’s user-web portal” and decided “to defend its position vigorously in appeals to higher courts”

A US grand jury has slapped two Tata companies — Tata Consultancy Services (TCS) and Tata America International Corp — with a $940 million (over Rs 6,000 crore) fine in a trade secret lawsuit filed by Epic System, a privately held US healthcare software firm. Reacting to the judgment, TCS said it “did not misuse or derive any benefit from downloaded documents from Epic System’s user-web portal” and decided “to defend its position vigorously in appeals to higher courts.”

The federal grand jury in the US State of Wisconsin ruled that TCS and Tata America International must pay $240 million to Epic Systems for ripping off its software after days of hearing. Tata firms were asked to pay $ 700 million in punitive charges.

In a lawsuit filed in October 2014 in US District Court in Madison which was amended in January and December 2015, Epic Systems had accused Tata firms of “brazenly stealing the trade secrets, confidential information, documents and data” belonging to Epic.

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“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 after the judgment is filed,” TCS said. “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. The company said it “appreciates the trial judge’s announcement from the bench that he is almost certain he will reduce the damages award”.

“TCS did not misuse or benefit from any of the said information for development of its own hospital management system ‘Med Mantra’ which was implemented for a large hospital chain in India in 2009,” the Indian tech company said.

Stating that TCS took that data while consulting for its customer, Epic said that it “recently learned from an informant” that TCS employees have been “fraudulently accessing” Epic’s software beyond what the consulting contract required and using

Epic’s software to improve their own competing product.

One TCS employee’s account, which was used in India and several US locations, downloaded 6,477 documents, according to Epic. According to TCS, the jury verdict will not have any impact on the TCS Q4 and FY16 financial results to be announced on Monday. “As an organization, TCS remains committed a protecting IP as well as its reputation and financial interests fully,” it said.

TCS which has over 344,000 consultants in 46 countries generated consolidated revenues of $15.5 billion for year ended
March 2015.

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