TCS-Epic Systems lawsuit: U.S. court confirms $140 million penalty on Indian IT major


Indian information technology (IT) major Tata Consultancy Services (TCS) said Monday that a U.S. court reduced compensatory and punitive damages demanded from the company to $140 million in a lawsuit filed by Epic Systems Corporation.

The matter relates to a United States grand jury order that slapped two Tata Group companies — TCS and Tata America International Corp (TAIC) — with a $940 million fine in a trade secret lawsuit filed by Epic Systems in April 2016. The same month, a Wisconsin jury found TCS guilty, and awarded $240 million in compensatory damages to Epic, and another $700 million in punitive damages.

A year later, in October 2017, the Wisconsin court brought the compensatory and punitive damages down to $420 million — $280 million in punitive damages and $140 in compensatory damages. The punitive damages were then held to be excessive after TCS appealed it with the U.S. Court of Appeals, 7th Circuit, Chicago, and the trial court was told to reassess it. This punitive damage has now been reduced by the US District Court for Western District of Wisconsin to $140 million, according to a TCS regulatory filing.

Epic Systems, a Verona, Winsconsin headquartered healthcare software company, had accused TCS and TAIC in a lawsuit filed in October, 2014 of “brazenly stealing the trade secrets, confidential information, documents and data” belonging to Epic.”

The $3.3 billion (2020) Epic Systems had claimed the $25.7 billion (2022) TCS took that data while consulting for its customer. In its lawsuit, Epic had alleged that TCS stole 6,000 files with a fake ID by posing as a staff member rather than a consultant.

Epic contracted TCS and TAIC in 2014 to help set up its systems at a medical facility in Portland, Oregon, United States. The same year, in October, Epic alleged that on-site TCS employees had stolen trade secrets and unlawfully built another software based on Epic’s intellectual property. It was a “rip-off” of the original software, Epic alleged.

“…We hereby inform you that in the Epic Systems Corporation matter, the U.S. 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.

“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.