What is the DXC lawsuit, for which TCS faces a penalty of $210 million?

Tata Consultancy Services (TCS) has been found guilty by a Texas federal jury of stealing the trade secrets of DXC Technology. The case may lead the company to pay a penalty of $210 million. Last week, Tata Consultancy Services declared a provision of $125 million at the time of Q3, when it got defeated in a case from EpicSystems.

Interestingly, the allegations have been refuted by TCS. This is what TCS had to say about the decision.

"TCS respectfully disagrees with the jury's advisory verdict. The matter will now be decided by the Court, which has ordered further briefing from the parties. We plan to continue to litigate this ongoing case. We will have no further comment as the case remains pending." The statement has been given by a spokesperson of the company.

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In the year 2019, Computer Sciences Corp filed a legal case against TCS. The claim of the lawsuit was that the TCS licensed its software to Transamerica subsidiary Money Services Inc. In the year 2018, TCS won a deal worth $2 billion from Transamerica. The allegations said that a total of 2,200 employees of Transamerica were rebadged by Tata in the year 2018. These were made to use to get access to the software of CSC in order to get information on its source code, along with other proprietary data. The purpose was to construct a competing life insurance platform.

As per the lawsuit, the deal of TCS was meant for third-party administration. The lawsuit said that it was not for getting access to the source code of its proprietary systems, which were later used to enhance the TCS BaNCS software.

Last week, the jury discovered in a verdict that confidential information regarding the Vantage-One and CyberLife software of the DXC was misused by the Tata Group subsidiary for managing annuity policies and life insurance and developing a competing platform. The jury instructed that a total of $70 million was owed by TCS to DXC for stealing the trade secrets. It also instructed for $140 million as the company's misuse, according to the jury, was "willful and malicious."

Transamerica ceased its 10-year duration deal with Tata Consultancy Services, two years before the schedule, in the month of June. As per sources, Transamerica was heading to an insourced model. As a part of the model, it is going to take over the IT operations taken care of by the TCS. 

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