$194M Shock for TCS: US Court Stands Firm, Sends Case Back Again
The $194M US ruling against TCS stays in place. Appeals Court removes injunction but returns case for review. Full breakdown of what this means for TCS now.
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Tata Consultancy Services finds itself under renewed pressure in the US. The Fifth Circuit Court of Appeals has confirmed a damages award of $194 million as part of the dispute with the Computer Sciences Corporation, which is now under DXC Technology, regarding the alleged misuse of confidential business information.
TCS communicated via exchanges on November 21 that the appellate court has endorsed the US District Court's ruling which found the company liable for financial penalties. One aspect that has changed is the injunction against TCS, the Appeals Court annulled that part and instructed the Northern District of Texas, Dallas Division, to consider the injunction with its guidelines.
The dispute has a history of several years. This most recent ruling comes on the heels of the update issued by the company on June 14, 2024 when it conceded the District Court's previous verdict of total damages of $194.2 million. The figure could be further divided into about $56.15 million in compensatory losses, $112.3 million in punitive damages, and nearly $25.77 million in prejudgment interest that had accrued until June 13, 2024.
In the latest update, TCS mentioned it is evaluating legal options that are accessible to it. The company stated that it may seek another review or take its case to the higher courts while reiterating its intention to defend its position at every level. TCS also mentioned that it would make the required financial provisions in its accounts following accounting standards.
The conflict dates back to 2019, when CSC filed a lawsuit against TCS, asserting that TCS had unlawfully gained access to and thereby benefited from the technology of CSC. CSC's stand was that TCS had got unauthorized access to its software after the employees of Transamerica (who had worked with the software under thelicensed setup) had gone to TCS. CSC alleged that this access enabled TCS to create a competing insurance platform after TCS had won a $2 billion contract with Transamerica.
