By Admin 
Legal Setback For TCS: Indian IT company Tata Consultancy Services (TCS) has suffered a major legal setback in America. The US Court of Appeals for the Fifth Circuit has upheld $194.2 million (about Rs 1,600 crore) in damages in its ongoing trade secrets dispute with Computer Sciences Corporation (CSC)—now part of DXC Technology. This decision can prove to be a big financial loss for TCS.
Setback for TCS
While the appeal court upheld the huge loss amount, one relief given to TCS is that the earlier permanent injunction has been lifted. Earlier TCS could not use any data or material of its old client CSC, but now this restriction has been removed.
Also, the court has sent the entire case to the Northern District of Texas (Dallas Division) for re-review and evaluation. However, in the current situation, TCS will have to pay a penalty of $194.2 million.
When did the controversy start?
This case started in 2019, when CSC claimed in the court that TCS stole their trade secrets. CSC alleged that –
- Some employees of a client called Transamerica joined TCS.
- These employees had authorized access to CSC’s licensed insurance software.
- TCS reportedly created a new similar insurance platform using the same software.
- As a result, its direct market competition with CSC started.
- CSC claimed that this was a direct violation of trade secrets, on the basis of which the court had imposed huge damages on TCS.
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