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US court trims fine on TCS to $140 million in Epic Systems suit

US court trims fine on TCS to $140 million in Epic Systems suit

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By CNBC-TV18  IST (Updated)

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Tata Consultancy Services said a US court reduced the damages demanded from the company to $420 million in a lawsuit filed by Epic Systems Corporation.

IT major Tata Consultancy Services (TCS) on Monday said a US court reduced the compensatory and punitive damages demanded from the company to $420 million in a lawsuit filed by Epic Systems Corporation.
"...We 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 judgement accordingly," TCS said in a regulatory filing.
"TCS is legally advised that it has strong arguments in its favor before the Appeal Court and the Order on the punitive damages are not supported by the facts presented by TCS before the Trial Court. We have been advised that the Order and the Judgement (when issued) is appealable to the US Court of Appeals, 7th Circuit Chicago," the filing added.
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"The company did not misuse or derive any benefit from EPIC’s documents and plans to defend its position vigorously before the Appeal Court. As an organization, the company remains committed to respecting and protecting proprietary information as well as its reputation," the filing noted.
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 Systems had accused TCS and Tata America International Corp, in a lawsuit filed in October, 2014 which was amended in January and December 2015, of "brazenly stealing the trade secrets, confidential information, documents and data" belonging to Epic. In its lawsuit, Epic had said 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" Epics software beyond what the consulting contract required - and using Epics software to improve their own competing product. One TCS employee account, which was used in India and several US locations, downloaded 6,477 documents, according to Epic.
"Rather than compete lawfully with Epic, TCS has engaged in an apparently elaborate campaign of deception to steal documents, confidential information, trade secrets, and other information and data from Epic, for the purpose of realising technical expertise developed by Epic over years of hard work and investment," the lawsuit said.
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 2020, TCS said a US Court of Appeals held that the punitive damages award of $280 million (around Rs 2,098 crore) was "constitutionally excessive".
Shares of TCS ended at Rs 3,234.65, down by Rs 81.50, or 2.46 percent on the BSE.
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