Tech blue chips in legal battle: What is the Infosys-Cognizant dispute all about?

The lawsuit, filed by Infosys in the Northern District of Texas of the US, comes months after Cognizant’s subsidiary, Cognizant TriZetto, accused Infosys of stealing trade secrets related to its healthcare insurance software. Infosys had denied those allegations. In fact, the counterclaim not only refutes Cognizant’s accusations but also levels serious charges of monopolistic practices against its rival.

Here is all you need to know about the dispute between the two IT giants.

What does Infosys lawsuit say?

Infosys has sought a jury trial and requested that the court invalidate and rule unenforceable Cognizant’s non-disclosure and access agreements (NDAAs). Additionally, Infosys is pursuing treble damages for alleged financial losses, reimbursement for attorneys’ fees and related costs.

Infosys has accused Cognizant of anti-competitive practices, including imposing restrictive contractual obligations, blocking Infosys from training programmes, hindering development of competing software products. Infosys claimed these tactics have limited US healthcare customers’ access to competitive pricing and innovative solutions.

What were the charges levelled by Cognizant earlier?

Cognizant sued Infosys in a US federal court in August 2024, alleging theft of trade secrets and proprietary information related to healthcare insurance software. The Texas court filing claimed Infosys illegally accessed data from TriZetto’s Facets and QNXT software, using this information to develop a competing product.

These software solutions automate tasks for healthcare insurance companies. Cognizant’s lawsuit asserted Infosys misappropriated TriZetto’s software, creating “Test Cases for Facets” by rebranding the data. Additionally, Infosys allegedly developed software to extract confidential TriZetto information from QNXT.

Did the hiring of Infy officials add to tensions?

Raising tension between the two companies, Cognizant had appointed former Infosys executive Rajesh Varrier as its global head of operations and India chairman and managing director. This followed the resignation of Rajesh Nambiar, who left Cognizant to become the president of Nasscom. Cognizant’s CEO, Ravi Kumar, also previously held prominent roles at Infosys, including president and deputy COO.

Infosys had earlier raised concerns about Cognizant’s recruitment of its key personnel, highlighting the competitive intensity between the companies.