TCS to pay $140 million fine; employees allegedly stole intellectual property

The IT services company denies the allegations

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Indian IT services company, Tata Consultancy Services (TCS), is facing a fine of $140 million as its employees have been accused of stealing intellectual property.

Almost six years ago, Epic Systems Corp. had hired the services of TCS and its subsidiary, Tata America International Corporation, to set up its systems at a hospital in Portland. Later, Epic Systems filed a case against TCS alleging that the employees of TCS who were working onsite had stolen its trade secrets and used the same to create another software, which was a copy of the original.

Two years later, TCS was found to be guilty by a jury and asked to pay about $940 million to Epic in compensation and punitive damages. The amount was later reduced to $420 million, that is, $140 million in compensatory damages and $280 million in punitive damages.

On August 21, the US Court of Appeals, 7th Circuit, Chicago, while upholding the award of compensatory damages of $140 million, requested the lower court to reconsider the punitive damages of $280 million imposed on TCS.

However, TCS maintains that there is no evidence to prove that it had stolen anything from Epic Systems or used any of its trade secrets to its advantage.

Last year, Computer Sciences Corp (CS), yet another software company had accused TCS and its subsidiary of similar theft of intellectual property and trade secrets.

Although TCS has been maintaining that it is not guilty, if the higher courts rule against it, the Company will find it extremely difficult to bag and work on projects in the US in the future.

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