After 2014 Epic case, TCS faces fresh US lawsuit for stealing trade secrets

A US-based insurance platform provider has claimed TCS is using its trade secrets to build a competing software platform, as part of TCS BaNCS, in the life insurance market

Computer Sciences Corp (CSC), a US-based insurance platform provider to a client of software major Tata Consultancy Services (TCS) has alleged in a lawsuit filed with a US district court last week, that the latter has been stealing its trade secrets.

CSC has claimed that TCS is using their trade secrets to build a competing software platform, as part of TCS BaNCS,  in the life insurance market. TCS works with eight of the top ten banking, financial services and insurance (BFSI) companies in US.

In 2014,US software firm Epic Systems filed and won a similar lawsuit against the IT major, although TCS continues to fight the penalty in higher courts with a newly strengthened team of lawyers in US.

"Defendants (TCS) are unfairly competing with CSC in the US in the life insurance and annuities administration and processing market. Rather than invest the substantial time and resources to compete legitimately and develop the complex software system required to administer and market U.S. policies, Defendants are accessing and using CSC’s software source code and documentation and its confidential, proprietary and trade secret information to do so," said CSC in a preliminary statement filed with US District Court of Northern District of Texas Dallas Division.

CSC said that their Vantage and Cyberlife software systems were created through decades of continuous development and hundreds of millions of dollars of investment by CSC and its predecessors. With TCS's recent announcement to enter this market, CSC alleges that TCS was facing difficulty in creating a similar complex platform and were thus accessing the company's proprietary code to develop a TCS product.

"TCS is aware of CSCs court filing. Our legal team is reviewing the allegations and will respond appropriately. TCS BaNCS is a comprehensive product with several successful implementations globally. TCS will strongly defend its position before the court," said a TCS spokesperson.

As this is a pending legal matter, TCS would not like to comment further at this time, added the spokesperson.

The lawsuit has been filed against TCS America. CSC had licensed its software to customer Money Services Inc (MSI) in 1994 and in 2014 MSI onboarded TS to manage IT services. MSI is now owned by Transamerica, with whom TCS announced a $2 billion third party administration deal in 2018. TCS also rebadged 2200 Transamerica employees post the deal. CSC claims that the current employees who had access to the CSC code were involved in the breach as they attempted to  replicate similar insurance functionalities on TCS BaNCS platform.

"Unless TCS is stopped from proceeding with these unjust efforts, they will be able to develop and launch a life insurance and annuities platform that is based on business and software solutions brazenly stolen from CSC," noted CSC in the statement. CSC had access to emails where TCS employees shared CSC code and discussed ways to replicate them on the Bancs platform.

BFSI is TCS' top growing business vertical having contributed almost $2 billion worth of new deal TCVs last quarter. Most analysts have noted that TCS' strong platform strategy has been one of the defining factors for their rapid growth over the past decade.