TCS has to pay DXC $210 million: What's the story?
A US jury has ordered Indian IT giant Tata Consultancy Services (TCS) to pay $210 million for allegedly misusing source code from American IT company DXC to create its TCS Bancs software platform. The lawsuit claims that TCS employees copied DXC's code when they encountered difficulties in developing their own software. This decision follows a previous case in which the US Supreme Court directed TCS to pay $140 million to Epic Systems for unauthorized web portal access.
TCS disagrees with the jury's verdict
"TCS respectfully disagrees with the jury's advisory verdict," the IT giant said in a statement. "The matter will now be decided by the Court, which has ordered further briefing from the parties. We plan to continue to litigate this ongoing case. We will have no further comment as the case remains pending," TCS added. The lawsuit is connected to a $2.5 billion deal with Transamerica Life Insurance in 2018, which was terminated in June 2023 due to economic factors.
TCS allegedly used trade secrets to create a competing platform
The case was filed by Computer Sciences Corporation (CSC), which became DXC Technology post-merger with HPE's enterprise services business, in 2019. They said that TCS hired 2,200 employees of Transamerica in 2018, through whom it got access to CSC's software, knowledge of its source code and other proprietary information. This allegedly helped TCS develop a competing life insurance platform, despite CSC originally licensing its software to Transamerica.
Lawsuit cites email exchanges between TCS employees as evidence
The lawsuit alleges that TCS employees working on the Bancs platform struggled to develop a software solution for calculating a rate of return in a specific insurance context. According to the lawsuit, TCS employees found the necessary solution in DXC's Vantage software and copied the relevant source code. The lawsuit cites email exchanges between TCS employees as evidence of this claim.
TCS employee copy-pasted source code, claims lawsuit
The lawsuit also quotes a TCS employee's email, which reads, "Here is some text from the old Vantage manuals on the rate of return screen for reference if it answers any questions." The employee then pasted nearly two pages from a Vantage manual explaining how DXC calculated "Calculated Investment Return on Annuities."
TCS employee also circulated DXC's proprietary information
The same employee examined "transactions of interest" accessed by the Vantage source code for the calculation and shared it with a colleague via email. Another TCS employee circulated the additional proprietary information from DXC regarding Vantage's calculation method, copying the actual source code into an email and sending it to colleagues.
