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Tata Consultancy slapped with $940-mn fine by US court

Sat, Apr 16, 2016, 04:41 PM
New York/Mumbai, April 16: India's top IT company Tata Consultancy Services has been fined $940-million by a US Federal Court in Wisconsin for allegedly stealing software information. The Indian company said it intended to appeal against the verdict in higher courts.

Besides the punitive damages of $700 million, the US Federal Court of the Western District of Wisconsin has asked the company, and its US arm, Tata America International Corp, to pay $240 million to Epic Systems Corp for "ripping off" its healthcare-related software.

"While TCS respects the legal process, the jury’s verdict on liability and damages was unexpected as the company believes they are unsupported by the evidence presented during the trial," the company said in a statement mailed to IANS.

"It is expected the trial judgment will be entered in the case in the next 6-8 weeks, following which the parties can file an appeal within 30 days after the judgment is filed," the statement added.

"TCS plans to defend its position vigorously in appeals to higher courts. TCS appreciates the trial judge’s announcement from the bench that he is almost certain he will reduce the damages award."

The verdict came after the case was heard in Courtroom 250 of Judge William M. Conley, based on the lawsuit filed by Epic Systems of Verona -- a major company in electronic health records -- on October 31, 2014 at the court in Wisconsin capital Madison.

The 39-page complaint alleged that Tata workers, hired as consultants to help a client, Kaiser Permanente in Oregon, to use its software, downloaded 6,477 documents accounting for 1,687 unique files from Epic's computers inappropriately, including those on its proprietary software.

The complainant further said a Tata employee had tipped off Epic about this activity and that the Indian company's leadership in the US and India were aware of the development that had commenced in 2012.

Epic claimed the defendant company used the documents and information to identify features of its software to accelerate the development of a rival product called Med Mantra. The court then asked Epic to prove in what manner Tata Consultancy would have benefited from that information.

The US company alleged that when confronted by Kaiser Permanente regarding the downloading of Epic data, the TCS staffer initially denied such an act. But later the said employee changed his story and admitted that he had provided his Epic access to two other colleagues.

The lawsuit also alleged the Indian company has engaged in an "elaborate campaign of deception to steal documents, confidential information, trade secrets, and other information and data," with the purpose of utilising technical expertise developed after years of hard work and investment.

"TCS’s misconduct appears designed to allow TCS and perhaps other Tata entities to unfairly compete with Epic in the marketplace. The unlawful conduct of TCS and potentially other Tata entities must be stopped and an appropriate remedy fashioned for the benefit of Epic," the lawsuit said.

In its statement, Tata Consultancy refuted all such claims and said no benefit was derived.

"TCS did not misuse or benefit from any of the said information for the development of its own hospital management system Med Mantra that was implemented for a large hospital chain in India in 2009," said the Tata Consultancy statement.

"The jury verdict will not have any impact on TCS Q4 (4th quarter) and FY16 (2016-17) financial results to be announced on Monday, 18 April," it said, adding: "As an organization, TCS remains committed a protecting IP as well as its reputation and financial interests fully."
Agency: IANS
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