TCS denies IP infringement in $940 Million Epic case
Tata Consultancy Services (TCS) has denied any violation of trade secrets and plans to contest the decision of the Wisconsin Grand Jury in higher courts. The Grand Jury had slapped a penalty of $940 million (around Rs.6,200 crores) on 2 of India's Tata group companies- TCS and Tata American International Corporation. The case was filed by Epic Systems who contracted TCS for consultancy work.
Epic Systems is a private healthcare software company that was founded in 1979. Headquartered in Verona, Wisconsin, USA, the company employs around 9,000 people and manages medical records of more than half of US's hospital patients.
Epic Systems had filed a case against TCS and Tata America International Corporation for "brazenly stealing the trade secrets, confidential information, documents and data" belonging to Epic Systems. According to Epic Systems, a TCS's employee while consulting for their client Kaiser Foundation Hospitals, misused access to Epic's UserWeb. The employee allegedly download 6,477 Epic Systems documents from an IP address outside the US.
Epic Systems also stated that most of the data downloaded was not required by TCS for consultation and could instead be misused for "unfair development and design advantages for TCS's competing medical management software called Med Mantra".
The jury at the court of Western District Madison, Wisconsin ruled in favour of Epic System's in 7 claims - breach of contract, misappropriation of trade secrets, unfair competition, unfair enrichment, etc. The recently completed trial imposed a $940 million penalty - $240 million as compensatory damage and $700 million as punitive damage. TCS has said that it will challenge the ruling.
While both the Epic Systems and TCS are IT companies, Epic Systems' revenue ($2 billion) was around 1/8th the revenue of TCS ($16 billion) in 2015.
Mumbai-based TCS, which employees more than 3.2 lakh people, has denied any involvement in the theft of trade secrets of Epic Systems. It has said that "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 now plans to "defend its position vigorously in appeals to higher courts".