Tata Consultancy Services said on Friday that the US Court of Appeals in Chicago reduced the damages it has to pay to EPIC Systems Corporation in an intellectual property rights case. TCS had been ordered to pay $280 million in punitive damages. The appeals court upheld that TCS has to pay $140 million in compensatory damages.
“The Court held that the punitive damages award of $280 million is constitutionally excessive and directed the Trial Court to reassess the punitive damages. The Court upheld the compensatory damages award of $140 million,” TCS said in a regulatory filing.
TCS said it was exploring options. “TCS is exploring the options available to it, as it believes that there is no evidence of misuse of EPIC information by TCS. TCS will vigorously defend its position before the relevant court,” it said.
The matter relates to a US grand jury order that slapped two Tata group companies — TCS and Tata America International Corp — with a $940 million fine in a trade secret lawsuit filed against them by Epic in April 2016. Epic is a US-based healthcare software service provider. In its lawsuit, it said that TCS stole its intellectual property to develop its own product.
According to reports, TCS had been hired to test a healthcare management system implemented by Epic. TCS employees had restricted access, but Epic alleged that employees of TCS stole upto 6,000 pieces of data containing system development information by setting up a fake account, disguised as a staff member of the company the system was being installed for.
On April 16, 2016, TCS made a disclosure to the stock exchanges regarding a US court verdict related to an intellectual property rights case with Epic Systems.
On October 1, 2017, TCS said the court significantly reduced the compensatory and punitive damages of $940 million to $420 million.
In May this year, Securities and Exchange Board of India (SEBI) had warned TCS to be careful in dealing with disclosure of material information to investors after the watchdog found that the IT major did not prominently display the extent of damages related to a case in the US.
The regulator has also asked the company to ensure that disclosures provide adequate, accurate, explicit and timely information to the investors.
With PTI inputs