TCS shares slip after US Supreme Court slaps $140 million penalty in EPIC Systems case

TCS Share Price: After the US Supreme Court imposed huge penalty on Tata Consultancy Services on Monday, shares of the TATA Group company started Wednesday's trading session on BSE on on a poor note as they were down 0.58 per cent, or Rs 20.35, at Rs 3,489.95 each at 9:36 am.

In the case that dates back to 2014, a US company-EPIC Systems- had filed a case against TCS alleging that the Indian IT firm stole its intellectual property after signed an agreement to implement EPIC's healthcare software. 

On Monday, the US Supreme Court rejected the TATA Group company's appeal against a decision passed by the District Court of Wisconsin, upholding an order which includes USD 140 million (Rs 1166 crore) in punitive damages.

After the verdict was given by the US court, TCS on Tuesday informed BSE that it intended to make the balance provision of approximately USD 125 million.

"We hereby inform you that in the EPIC Systems Corporation matter, the United States Supreme Court on November 20, 2023 rejected the Company’s petition to file an appeal against the orders passed by the US Court of Appeals, 7th Circuit, which confirmed the punitive damages award of USD 140 million passed by the District Court of Wisconsin," the company said in a statement.

"The Company intends to make the balance provision of approximately USD 125 million in its financial statements as an exceptional item, for the third quarter and nine months ending December 31, 2023," TCS further said.

TCS vs EPIC Systems: What is the issue all about?

• The US Supreme Court rejected TCS' petition on the EPIC Systems case
• The US Wisconsin Court had passed an order to pay compensation of $14 crore to TCS.
• TCS had filed a petition against this order in the US Supreme Court.
• TCS will now pay Rs 1,166 crore ($14 crore) damages.
• EPIC Systems to report one-time loss of Rs 1,041 crore ($12.5 crore) in Q3
• EPIC Systems sued TCS for IP rights infringement in October 2014
• TCS employees misused EPIC software outside consulting contract
• To further improve its own software, TCS downloaded many documents from EPIC Software.
• In 2016, the US jury had earlier ordered compensation of $94 crore.
• In 2016, TCS said that the company did not violate any trade secrets in creating its own hospital management system.
• In 2009, TCS created its own hospital management system 'Med Mantra' for a hospital chain in India.
• In 2017, the Wisconsin court increased the damages to $420 million.
• In 2022, the Wisconsin court again reduced the damages to $140 million.