Tata Consultancy Services ordered to cough up $210M in code theft trial
Naughty engineers + inability to work email = $$$
A jury has sided with Computer Sciences Corporation (CSC) against Tata Consultancy Services (TCS) over the theft of source code and documentation. A total of $210 million was this week awarded.
According to the verdict [PDF], a Texas jury agreed that TCS had "willfully and maliciously" misappropriated both source and confidential documentation by "improper means," awarding CSC $140 million in damages, with another $70 million tacked on for TCS's "unjust enrichment."
The complaint [PDF] was filed in April 2019 regarding CSC's VANTAGE-ONE and CyberLife software platforms. CSC had licensed these software platforms to Transamerica Corporation, a life insurance holding company, to whom Tata – used here to collectively refer to Tata Consultancy Services Limited and Tata America International Corporation – began providing maintenance services.
In 2014, CSC and Transamerica signed off on a Third-Party Access Addendum that would allow Tata to alter CSC's software, but only for the benefit of its customer – Transamerica.
All was well until 2016, when Transamerica decided it needed to refresh its software. CSC and Tata both put in bids. CSC lost, and Tata won with its own software platform called BaNCS.
The circumstances got sticky at this point, not least because Tata hired more than 2,000 Transamerica employees. CSC alleged that these former employees had access to its code and documents, and forwarded them on to the Tata BaNCS development team.
The situation escalated in 2019, when a CSC employee was accidentally copied in on an email between Tata and Transamerica showing that Tata was accessing confidential information, according to CSC. The company then began legal proceedings.
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Documents and motions have been exchanged in the years since as Tata sought to get the case thrown out while CSC's claims were upheld. Eventually, it went to a jury trial, which found for CSC.
CSC, which dates back to 1968, was merged with the Enterprise Services business of Hewlett Packard Enterprise (HPE) to form DXC in 2017. The corporate mash-up has had its own legal troubles – a lawsuit was launched in 2019 by investors concerned over layoffs following the merger.
CSC's April 2019 complaint is highly critical of TCS. It alleged: "Misappropriating sophisticated business software is, apparently, TCS' method of entering new business markets in the United States," citing the example of Epic Systems Corporation.
Epic, a healthcare software provider, kicked off litigation in 2014, alleging that "TCS entities accessed Epic's web portal without authorization while servicing a mutual client." According to CSC's complaint, the information gleaned was then used to develop a competing software platform. In that instance, the jury agreed with Epic and in October 2017 awarded Epic substantial damages.
However, the champagne corks won't be popping at CSC just yet. If the Epic experience is anything to go by – the decision was appealed – there will likely be legal twists and turns aplenty before payments are made and the case is closed. ®