Tata Consultancy Services (TCS), India’s largest IT services company, witnessed a nearly 1% decline in its shares on November 21. The dip comes as TCS announced a provision of $125 million as an ‘exceptional item’ in its upcoming third-quarter results, relating to a trade secret lawsuit filed by US-based Epic Systems.
The lawsuit, initiated in 2014 by Epic Systems against TCS and Tata America International Corp, accused the Tata Group companies of appropriating its intellectual properties to develop their own, despite being under contract to implement Epic’s healthcare software.
On November 20, the US Supreme Court dismissed TCS’ appeal against a verdict from the District Court of Wisconsin, affirming an order that includes $140 million in punitive damages, as stated in a company release. In 2016, a jury found TCS guilty in the lawsuit and initially awarded damages of $940 million to be paid to Epic Systems. Following further hearings, the fine was subsequently reduced to $420 million a year later, encompassing $280 million in punitive damages and $140 million in compensatory damages.
After TCS appealed to the US Court of Appeals, 7th Circuit, Chicago, the punitive damages were deemed excessive, leading the trial court to reassess. Ultimately, in July 2022, the US District Court for the Western District of Wisconsin reduced the punitive damage to $140 million.
As of 11:18 am, TCS shares were experiencing a 0.11% decline, trading at ₹3,506.30.
