US court orders TCS to pay $194 million for trade secrets misappropriation

India's largest IT services exporter, Tata Consultancy Services (TCS), announced on Friday that it has received an adverse judgment from the United States District Court, Northern District of Texas, Dallas Division to pay a $194 million penalty.

In a stock exchange filing, the company said, "...we hereby inform you that the company has received an adverse judgement passed by United States District Court, Northern District of Texas, Dallas Division, details of which are provided in Annexure A. The company believes that it has strong arguments in the matter and intend to defend its position through review petition/appeal to the appropriate court."

The case, filed by Computer Sciences Corporation (CSC) (now known as DXC Technology Company) against the company alleged misappropriation of its trade secrets.

Under the terms of the court orders, the company is liable for misappropriation of trade secrets under the Defend Trade Secrets Act of 2016 (DTSA).

The United States District Court said the IT company is liable for a total of $194.2 million, which includes $56,151,583 in compensatory damages and $112,303,166 in exemplary damages.

"The Court also assessed that the company is liable for $25,773,576.60 in prejudgment interest through June 13, 2024. The Court also passed certain injunctions and other reliefs against the Company," TCS said in the exchange filing.

Despite this substantial ruling, TCS asserted that it has robust arguments to challenge the decision and intends to defend its stance through a review petition or an appeal to the relevant court. The company received the court order on June 14, 2024.

TCS claimed that the judgment will not significantly affect its financials or operations. The company is taking the necessary measures to safeguard its interests and address the legal challenges posed by this ruling.

"The company believes that it has strong arguments against the judgement and is taking necessary steps to protect its interest through review/appeal. The company believes that the judgement has no major adverse impact on its financials and operations," it said in the filing.