US Court Imposes $140-Million Penalty On TCS In 2014's Epic Systems Case

A US court in the mid-western state of Wisconsin passed an order confirming the $140-million punitive damages slapped on Tata Consultancy Services (TCS) in the Epic Systems case, the company said in a statement to the exchanges yesterday, as per ET.

¡°We [TCS] hereby inform you that in the Epic Systems Corporation matter, the US District Court for Western District of Wisconsin passed an order reducing the jury award of punitive damages to $140 million and directed the Clerk of the Court to file an amended judgment accordingly,¡± TCS said in a statement.

Reuters

American software firm Epic Systems filed a lawsuit against TCS in 2014 alleging that the IT services company stole its intellectual property. In 2016, Epic won a jury award of $940 million. In 2017, the Wisconsin court judge lowered the amount of the award to $420 million to comply with caps on punitive damages in such cases. TCS had filed appeals in the higher court.

Then in August 2021, a US Court of Appeals held that the punitive damages award of $280 million (~Rs 2,098 crore) was ¡®constitutionally excessive¡¯, and reduced the penalty for damages to $140 million. This judgment has now been formalized according to the company¡¯s statement, the ET report stated.

The lawsuit against TCS for allegedly stealing intellectual property dates back to 2014, when the US-based firm accused TCS employees of stealing around 6,000 pieces of important data containing its system development information by setting up a fake user account.

IT giant TCS further reiterated that it ¡°did not misuse or derive any benefit from Epic¡¯s documents and planned to defend its position vigorously before the Appeal Court¡±.

¡°TCS is legally advised that it has strong arguments in its favor before the Appeal Court and the (court) order on the punitive damages is not supported by the facts presented by TCS before the Trial Court. We have been advised that the Order and the Judgment (when issued) is appealable to the US Court of Appeals, 7th Circuit Chicago,¡± said the TCS statement on Monday.

Also Read: IT Sector's Great Resignation Spree Continues With High Attritions In TCS, Infosys & Wipro

ET

As an organization, the company remains committed to respecting and protecting proprietary information as well as its reputation, read Monday¡¯s statement.

TCS had provisioned Rs 1,218 crore ($165 million) towards this legal claim in its financial statements for the quarter and year-ended March 31, 2021, as per ET.

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