One of India’s most valuable companies has been hit with a second lawsuit for improper use’ of a software provider’s source code

• Tata Consultancy Services, India’s second most valuable company by market cap after Reliance Industries, just got hit with its second lawsuit in five years for alleged theft of “trade secrets”.
  
• The company, which is the IT services arm of Tata, has been accused by the US-based Computer Services Corp (CSC) of improperly accessing the latter’s source code to develop an insurance platform.
  
• TCS was building the insurance platform in question for TransAmerica, from which it received a $2 billion contract in January last year. That was, incidentally, TCS’s largest contract ever.

Tata Consultancy Services, India’s second most valuable company by market cap after Reliance Industries, just got hit with its second lawsuit in five years for alleged theft of “trade secrets”.

The company, which is the IT services arm of Tata, has been accused by the US-based Computer Services Corp (CSC) of improperly accessing the latter’s source code to develop an insurance platform.

In a response to ET, a TCS spokesperson said that the company’s legal team would respond to the allegations after reviewing them and that TCS would “strongly defend its position before the court”.

TCS was building the insurance platform in question for TransAmerica, from which it received a $2 billion contract in January last year. That was, incidentally, TCS’s largest contract ever.

CSC had licensed its Vantage and CyberLife softwares to a subsidiary of TransAmerica, Money Services Inc, for the administration of insurance and annuity products. The suit reportedly alleges that TCS misappropriated the code of these softwares, specifically the code which calculates the rate of return on products, to develop a platform for TransAmerica.

Legal proceedings for the case will take place in the US state of Texas. While it is unclear the amount of punitive damages that CSC is seeking, a previous lawsuit filed against TCS might give an indication of the trouble the IT services major is in.

In 2014, Epic Systems, another US-based software provider, accused TCS of stealing its intellectual property. The suit had alleged that TCS employees had stolen 6000 documents pertain to Epic’s methods of system development from a client that licensed the latter’s software - Kaiser Permanente.

After two years of legal wrangling, TCS was asked to pay Epic $940 million worth of damages - which was later reduced to $420 million based on caps for such cases.

TCS is currently in the process of appealing against the $420 million payment. At the end of March 2019, the appeal was transferred to a federal appeals court in the US.

The latest lawsuit didn’t seem to have much of an effect on TCS’s shares, which stabilised after a 1% drop this morning.


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