U.S. court upholds $140 Million in compensation to Epic Systems in TCS case

An appeals court in the U.S. upheld $140 million in compensatory damages while ordering
reassessment of $280 million in punitive losses against Tata Consultancies Services (TCS) in a trade the secret case brought by Epic Systems, an American medical software company.

MUMBAI: An appeals court in the U.S. upheld $140 million in compensatory damages while ordering reassessment of $280 million in punitive losses against Tata Consultancies Services (TCS) in a trade the secret case brought by Epic Systems, an American medical software company.

The US Court of Appeals, 7th Circuit, Chicago, ruled that the $280 million in punitive damages award is constitutionally unreasonable and ordered the Trial Court to reconsider the punitive damages. The court however upheld $140 million in compensatory damages, according to an exchange filing by TCS, India’s largest provider of software services.

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In 2018, TCS gave Epic Systems a $440-million letter of credit. TCS’s appeal against US software firm Epic Systems’ trade secret theft lawsuit moved to a US federal appeals court in May 2019.

“TCS is exploring the options available to it, as it believes that there is no evidence of misuse of EPIC information by TCS. TCS will vigorously defend its position before the relevant court,” the company said in a statement to stock exchanges.

The US firm’s lawsuit dates back to 2014. Epic Systems had accused TCS of stealing its intellectual property. A jury in 2016 found TCS guilty and awarded Epic Systems damage worth $940 million. A year after the original award, a court in Wisconsin brought the damage amount down to $420 million. It was done to comply with an existing legal limit on punitive damages for such matters.

Epic had claimed that TCS employees were brought on as consultants to a Kaiser Permanente Sunnyside Medical Center in Portland to help implement Epic software there and took more than 6,000 documents containing Epic’s development information by creating a fake user account. The user pretended to be an employee of the hospital and did not disclose that he was a consultant, the lawsuit said.