TCS Asked To Pay US$140mn Punitive Damages by US Supreme Court in EPIC Systems Case
Moneylife Digital Team 21 November 2023
The US Supreme Court has rejected a petition by Tata Consultancy Services Ltd (TCS) to file an appeal against the orders passed by the US Court of Appeals, which confirmed the punitive damages award of US$140mn (million) passed by the district court of Wisconsin.
 
Confirming the ruling, TCS, in a regulatory filing, says, "The Company intends to make the balance provision of approximately US$125mn in its financial statements as an exceptional item for the third quarter and nine months ending 31 December 2023."
 
Last year, the US court of appeals in the western district of Wisconsin passed an order confirming the US$140mn punitive damages slapped on TCS in the case filed by EPIC Systems Corp. TCS has challenged the ruling before the Supreme Court.
 
In October 2014, TCS was slapped with a lawsuit and asked to pay US$940mn to Epic Systems which was later lowered to US$280mn. Besides the punitive damages, the US Federal Court of the western district of Wisconsin has asked the company and its US subsidiary, Tata America International Corp, to pay US$240mn to Epic Systems for 'ripping off' its healthcare-related software.
 
The verdict came after the case was heard for around two weeks in the courtroom of judge William M Conley, based on the lawsuit filed by Epic Systems of Verona—a major company in electronic health records—on 31 October 2014 in the US district court at Wisconsin capital Madison.
 
The 39-page complaint alleged that TCS 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 System's computers inappropriately, including those on its proprietary software.
 
The complainant further said an employee of TCS had tipped off Epic Systems 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 Systems claimed that TCS used the documents and related information to identify features of its software to accelerate the development of a rival product called Med Mantra. 
 
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.
Comments
haru_mandal
1 year ago
After working for half centuries in US, indian IT companies, and their managers should have known what is "OK" in India is not OK in USA. And they should thank their stars that they didn't go to jail there.
david.rasquinha
1 year ago
So what happened to the fabled ethics and principles of the sainted House of Tatas? Have the guilty employees been punished? Did any of the higher-ups know and if so, what action has been taken? Silence from TCS.
frankensteinz1010
1 year ago
Getting 280 million dollar is not a small amount. While it is good to know justice is delivered, but one wonders if Epic System would have made more money without the breach :) or was this a blessing in disguise and a way to get richer by a damn 300 million dollars without having to sell anything :). LOL.

I wish I could win something like 300 million dollars. Life is set.


vijaygovind53
1 year ago
TCS views not included in report.
iaminprabhu
1 year ago
TCS leadership directly in USA is accountable for such acts & must be held responsible (and hope didn't go punished)
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