A US appeals court upheld $194.2 million in damages against Tata Consultancy Services (TCS) in a major blow to its trade secrets battle with Computer Sciences Corporation (CSC), now part of DXC Technology.
In a regulatory filing dated November 21, TCS said the appellate court affirmed the damages imposed by the US District Court but vacated the permanent injunction that had restricted TCS from using certain CSC materials. The case now returns to the Northern District of Texas, Dallas Division, which has been instructed to reassess the injunction in line with the Fifth Circuit’s guidance.
What’s the case about?
The case started in 2019 when CSC accused TCS of misappropriating trade secrets. According to CSC, Tata Consultancy Services gained improper access to its licensed insurance software through former Transamerica employees who joined TCS under a $2 billion outsourcing deal. The firm claimed that the access enabled TCS to develop a competing insurance platform.
TCS called damages ‘legally excessive’
The ruling follows TCS’s earlier disclosure on June 14, 2024, when the District Court found the company liable for $194.2 million, comprising $56.15 million in compensatory damages, $112.3 million in exemplary (punitive) damages and $25.77 million in prejudgment interest accrued through June 13, 2024.
TCS had contested the exemplary damages as “legally excessive” and sought a reversal or reduction. The Fifth Circuit rejected this argument, leaving the full damages award unchanged.
However, the appellate court’s decision to vacate the injunction offers temporary relief. The previous ban on TCS’s future use of BaNCS material has now been lifted pending the District Court’s fresh review.