What You Should Know:
– Tata Consultancy Services (TCS), India’s largest information technology services company, has been ordered to pay $140M in punitive damages to Epic Systems Corporation in a long-running legal dispute over intellectual property, Business Standard reports.
– The decision by the Supreme Court of the United States upholds a lower court’s ruling and will have a significant impact on TCS’s financial results for the third quarter of 2023.
Epic Systems Corporation vs. Tata Consultancy Services
The legal battle between TCS and Epic Systems dates back to 2014 when Epic accused TCS of stealing its trade secrets while working on a project for the healthcare software company. TCS denied the allegations, but a US jury in Wisconsin found the company liable and awarded Epic $940M in damages in 2016.
In 2017, a Wisconsin court reduced the penalty amount to $420M to comply with caps on punitive damages. TCS appealed the decision to the United States Court of Appeals for the Seventh Circuit, which upheld the lower court’s ruling. However, the appeals court asked the trial court to reconsider the punitive damages award. Last year, the Wisconsin court further reduced the penalty amount to $140M. TCS appealed this decision to the Supreme Court, but the nation’s highest court declined to hear the case, effectively upholding the lower court’s ruling.
Impact on TCS’s Financial Results
The Supreme Court’s decision means that TCS will be required to pay Epic $140M in punitive damages. This will have a significant impact on the company’s financial results for the third quarter of 2023. TCS has stated that it will take a $125M provision in its third-quarter financial statements to account for the legal settlement.
The long-running legal dispute with Epic Systems has been a cloud over TCS for several years. With the Supreme Court’s decision, the company can finally put this matter behind it and focus on its core business of providing IT services to its clients.
