U.S. Court Of Appeals Upholds Adverse Order Against TCS Amounting To $194 Million In Trade Secrets Dispute

In a ruling impacting India's largest software-services exporter, Tata Consultancy Services (“TCS”), the US Court of Appeals of Fifth Circuit (“Appeals Court”) upheld the decision of District Court, Northern District of Texas (Dallas Division) (“District Court”) directing the company to pay $194 million in damages in a matter related to trade secrets dispute.In its statutory filing to the National Stock Exchange and Bombay Stock Exchange, TCS called the order an “adverse ruling” and apprised the authorities that it was now “evaluating various options, including review and appeal before appropriate courts.” As per the filing dated 22.11.2025, TCS also notified the authorities that it will make necessary accounting provisions in line with relevant financial standards. Background of the dispute The matter relates to TCS's trade secrets dispute with Computer Sciences Corporation (“CSC”), now merged with DXC Technology Company (“DXC”). CSC is an American MNC which provides information technology services and business solutions software to its customers, including customers in the life, wealth and annuities industry. The dispute centres on allegations against TCS, that the company misused CSC's proprietary information related to insurance software platforms Vanatge-one and Cyber-life. During the 1990s, CSC and Transamercia, an American insurance provider, entered into various agreements. In 2005, the companies amended the licensing agreement to include Vantage software. By way of this agreement Transamerica was authorized to use and modify the software while CSC retained the ownership over the platforms. The agreement specifically stipulated that Transamerica will not use CSC's confidential information to reverse engineer a platform for itself. In 2013, TCS and Transamerica entered into a Master Services Agreement pursuant to which TSC was engaged as a third-party consultant to provide maintenance services for Vantage and CyberLife. Between 2013 and 2018, TCS and Transamerica entered into various agreements, pertinently, the 2018 Amended Master Services Agreement. As a part of this agreement, TCS hired over 2,200 people who were formerly employed by Tranamerica including personnel who maintained Vantage and CyberLife at Transamerica. Soon CSC began to reach out to Transamerica and later to TCS to express concerns about the treatment of its intellectual property. District Court's Ruling and Court of Appeals RulingIn August, 2019, after several correspondences exchanged between the parties, CSC sued TCS in the federal court. It was claimed inter alia that TCS has committed trade secret misappropriation under the Defend Trade Secrets Act (“DTSA”). It was factually established that TCS had been using CSC's confidential information in the development of BaNCs software which had ultimately led to Transamerica terminating its relationship with TCS. In 2023, after an 8- day trial, the District Court found that – a) CSC's source code and technical manuals for Vantage and CyberLife were trade secrets; b) TCS acquired the manuals by improper means and TSC used the manuals without express or implied consent and did so wilfully and maliciously. The District Court held TCS liable for $56 million and exemplary damages to $ 112 million. The District Court also passed a permanent injunction barring TCS from using CSC's trade secrets or any version of BaNCS developed using the material. Further, TCS employees who had access to CSC's trade secrets were prohibited from working on TCS software for the U.S. market for 18 months and imposed a 10-year montiorship. The Appeals Court upheld the finding of the District Court on all most all questions of law and fact. The only point where the Appeals court differed with the District Court was with respect to the grant of permanent injunction. As a relief to TCS, the Appeals Court vacated the previous injunction granted by the District Court which inhibited TCS's ability to conduct business using BaNCS software and other related material. The Appeals Court also remanded the matter back to the District Court for reassessment of the injunction order.Click Here To Read/Download Order

U.S. Court Of Appeals Upholds Adverse Order Against TCS Amounting To $194 Million In Trade Secrets Dispute

Arpita Pande

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