U.S. Appeals Court Reduces Damages Award In TCS-Epix Systems Case
Employees stand near a signage for Tata Consultancy Services at the company’s Synergy Park campus in Hyderabad, India. (Photographer: Namas Bhojani/Bloomberg)

U.S. Appeals Court Reduces Damages Award In TCS-Epix Systems Case

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An appeals court in the U.S. has upheld compensatory damages of $140 million and directed reassessment of punitive damage of $280 million in the TCS-Epic Systems intellectual property rights case.

"In the Epic Systems matter, the U.S. Court of Appeals, 7th Circuit, Chicago, returned a verdict on the appeal filed by TCS, reducing the damages award," the Indian software services firm said in a regulatory filing on Friday. "The court held that the punitive damages award of $280 million is ‘constitutionally excessive’ and directed the trial court to reassess the punitive damages.”

The court has however upheld the compensatory damages award of $140 million. "TCS is exploring the options available to it, as it believes that there is no evidence of misuse of EPIC information by TCS. TCS will vigorously defend its position before the relevant court,” the filing noted.

The matter relates to a U.S. grand jury order that slapped two Tata Group companies—Tata Consultancy Services Ltd. and Tata America International Corp.—with a $940 million fine in a trade secret lawsuit filed against them by Epic Systems in April 2016.

On April 16, 2016, TCS made a disclosure to the stock exchanges regarding a U.S. court verdict related to an intellectual property rights case with Epic Systems.

On Oct. 1, 2017, TCS said that the court significantly reduced the compensatory and punitive damages of $940 million to $420 million.

In May 2020, Securities and Exchange Board of India told TCS to be careful in dealing with disclosure of material information to investors after it found that the IT major did not prominently display the extent of damages related to a case in the U.S.

The Indian markets regulator has also asked the company to ensure that disclosures provide adequate, accurate, explicit and timely information to the investors.

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