By: Aaron Kim, ITMG Insider Threat Analyst
The US District Court passed an order reducing the jury award of punitive damages to $140 million slapped on Tata Consultancy Services (TCS) for stealing intellectual property from Epic Systems Corporation. The IT service company has previously been told to pay $280 million in punitive damages.
“We hereby inform you that in the Epic Systems Corporation matter, the US District Court for Western District of Wisconsin passed an order reducing the jury award of punitive damages to $140 million and directed the Clerk of the Court to file an amended judgment accordingly,” TCS said in a statement.
American software firm Epic Systems filed a lawsuit against TCS in 2014 alleging that the IT services company stole its intellectual property. In 2016, Epic won a jury award of $940 million. In 2017, the Wisconsin court judge lowered the amount of the award to $420 million to comply with caps on punitive damages in such cases. TCS had filed appeals in the higher court.
Then in August 2021, a US Court of Appeals held that the punitive damages award of $280 million was ‘constitutionally excessive’ and reduced the penalty for damages to $140 million. This judgment has now been formalized according to the company’s statement; the ET report stated.
The lawsuit against TCS for allegedly stealing intellectual property dates back to 2014, when the US-based firm accused TCS employees of stealing around 6,000 pieces of important data contain its system development information by setting up a fake user account.
So far, TCS has maintained that there is no evidence of misuse of Epic’s information, and that it plans to defend its position before the appeal court. In its July 4 disclosure to SEBI, the company noted, “TCS is legally advised that it has strong arguments in its favor before the appeal court and the order on the punitive damages is not supported by the facts presented by TCS before the trial court. We have been advised that the order and the judgment when issued is appealable to the US Courts of Appeals 7th Circuit Chicago.”
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