US IP case: TCS denies charges; to appeal to higher courts

Stating that there was no IP infringement in the Epic Systems case, India's largest software services firm Tata Consultancy Services (TCS) on Saturday said it plans to "defend its position vigorously in appeals to higher courts".

The Mumbai-based firm said it remains committed to protecting intellectual property (IP) as well as its reputation and financial interests fully.

A US grand jury has slapped two companies of India's Tata Group -- TCS and Tata America International Corporation -- with a $940 million (nearly Rs 6,253.6 crore) fine in a trade secret lawsuit filed against them.

TCS said it had received a jury verdict of the recently completed jury trial in a lawsuit filed by Epic Systems in the court of Western District Madison, Wisconsin.

"While TCS respects the legal process, the jury's verdict on liability and damages was unexpected as the company believes they are unsupported by the evidence presented during the trial," TCS said in a statement.

Apart from paying $240 million (nearly Rs 1,596.7 crore) to Epic Systems, the Tata companies have also been asked to pay another $700 million (nearly Rs 4,656.93 crore) in punitive damages.

TCS, however, said it "did not misuse or derive any benefit from downloaded documents from Epic System's user-web portal".

"TCS plans to defend its position vigorously in appeals to higher courts. TCS appreciates the trial judge's announcement from the bench that he is almost certain he will reduce the damages award," it added.

The Tata Group company further said, "TCS did not misuse or benefit from any of the said information for the development of its own hospital management system 'Med Mantra' which was implemented for a large hospital chain in India in 2009".

The verdict will not have any impact on the company's fourth quarter (Q4) and FY2016 financial results that will be announced on April 18.

Epic Systems had accused TCS and Tata America International Corporation, in a lawsuit filed in October 2014 which was amended in January and December 2015, of "brazenly stealing the trade secrets, confidential information, documents and data" belonging to Epic.

In its lawsuit, Epic had said that TCS took that data while consulting for its customer.

Epic said that it "recently learned from an informant" that TCS employees have been "fraudulently accessing" Epic's software beyond what the consulting contract required - and using Epic's software to improve their own competing product.

One TCS employee's account, which was used in India and several US locations, downloaded 6,477 documents, according to Epic.

"Rather than compete lawfully with Epic, TCS has engaged in an apparently elaborate campaign of deception to steal documents, confidential information, trade secrets, and other information and data from Epic, for the purpose of realising technical expertise developed by Epic over years of hard work and investment," the lawsuit said.