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Rival accuses Tata Consultancy Services of misappropriating its code, files suit

TCS lost a similar case to Epic Systems, setting it back by $420 million in penalties, which it's appealing in court.

, ET Bureau|
Updated: Apr 30, 2019, 08.14 PM IST
The lawsuit also alleges that a TCS employee copied and pasted part of CSC’s insurance source code into an email and sent it to colleagues.
BENGALURU: Computer Sciences Corp. (CSC) has filed a lawsuit against Tata Consultancy Services, alleging that the Indian IT bellwether is stealing its trade secrets to build an insurance platform, following a $2-billion deal that TCS won from US insurer TransAmerica last year.

This is the second such suit against TCS, after the Indian IT major lost a similar case to Epic Systems, setting it back $420 million in penalties. TCS is currently appealing that in a higher court.

TCS is “improperly accessing” its codes, the US-based CSC said in its lawsuit filed last week in Texas, seeking punitive damages. ET has seen a copy of the lawsuit.

"Our legal team is reviewing the allegations and will respond appropriately. TCS will strongly defend its position before the court. As this is a pending legal matter, TCS would not like to comment further at this time," a TCS spokesperson said in response to a detailed questionnaire sent by ET.

CSC, whose parent is the NYSE-listed DXC Technology, had licensed its insurance products Vantage and CyberLife to Money Services Inc (MSI), which is owned by TransAmerica. MSI was using the CSC software to administer and process TransAmerica’s insurance and annuity policies, the suit said.

TCS, which took on board 2,200 TransAmerica employees as part of the deal, planned to use its BaNCS platform to administer the policies.

“TCS now employs not only thousands of people who know how to use CSC software, including Vantage and CyberLife, but TCS also now employs former MSI employees with knowledge of - and access to - the CSC source code hosted on the MSI servers,” CSC said. “TCS is using this access to and knowledge of the CSC source code, software documentation, and other proprietary and confidential CSC information to develop TCS’ BaNCS for the U.S.”

“TCS BaNCS is a comprehensive product with several successful implementations globally,” the IT giant’s spokesperson said. TCS uses the BaNCS platform to administer insurance policies in the UK.

The lawsuit also alleges that a TCS employee copied and pasted part of CSC’s insurance source code into an email and sent it to colleagues.

“Over the course of three weeks, TCS employees accessed and analyzed both the proprietary CSC software documentation and the Vantage source code to try to determine the method and process by which Vantage calculates this particular rate of return,” CSC said.

CSC discovered that TCS employees were looking into its code when a CSC employee, who has a TransAmerica email address, received a copy of the Indian software major’ mails, possibly by accident, CSC said in a separate court filing seeking a temporary restraining order.

CSC said it had no way of knowing if TCS was looking at other parts of its code.

“These cases take a long time. The Epic case was filed in 2014. But it is a concern if it will affect more deals in the insurance sector in the US,” an analyst with a Mumbai-brokerage said.

CSC’s suit also cites the Epic verdict against TCS.

CSC is seeking permanent injunction to prevent TCS and its employees from using CSC’s source code to develop the BaNCS platform.

TCS is based in Mumbai, where the capital markets remained shut Monday on account of general elections.

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