TCS' $420 million punitive damages ruled 'excessive' by US court — to be 'reassessed' for a second time

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TCS' $420 million punitive damages ruled 'excessive' by US court — to be 'reassessed' for a second time
The verdict of the case between Tata Consultancy Services and Epic Systems to be reassessed, rules US Court of AppealsBCCL

  • Tata Consultancy Services (TCS) may not have to dole out $420 million to Epic Systems with the Court of Appeals in Chicago ruling that the punitive damages in the trade secrets case are ‘excessive’.
  • The Indian IT giant will still have to pay $140 million in compensatory damages.
  • According to the US court, $240 million in punitive damages should be reassessed.
Tata Consultancy Services (TCS) claims that there is no evidence of information misuse, and continues to fight against the verdict of the trade secrets case against Epic Systems in the US. After already having halved the damages to be paid, from $940 million to $420 million, the Court of Appeals in Chicago has ruled even that may be ‘excessive’.

TCS will still have to pay the full $140 million in compensatory damages, but the $280 million in punitive damages should be reassessed, according to the US court.

“TCS is exploring the options available to it as it believes that there is no evidence of misuse of EPIC information by TCS,” the company said in its filing with the stock exchange in India.
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The $940 million verdict against TCS
The case goes back to 2014 when Epic Systems accused TCS of stealing its intellectual property.

According to the US company, TCS was hired to test the healthcare management system implementation of Kaiser Permanente (KP) — a healthcare service provider — and was only given access to consultants.
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Epic Systems alleges that TCS instead stole over 6,000 documents using KP employee’s credentials and created its product.
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In 2016, a jury found TCS guilty and awarded Epic Systems damages worth $940 million. A year later, a court in Wisconsin brought the damages down to $420 million to comply with the existing limit on punitive damages for such cases.

TCS tried to appeal the $420 million verdict then and there, but the judge upheld the ruling following which the Indian major then filed an appeal in Chicago.

“TCS will vigorously defend its position before the relevant court,” said the company.
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