Relief for TCS as US court rejects CSC's restraining order demand

Computer Sciences Corp (CSC) had accused TCS of misappropriating its trade secrets in a lawsuit filed with a US district court

A US court on Monday denied Computer Sciences Corp’s (CSC’s) application for a temporary restraining order against Tata Consultancy Services (TCS). CSC, a US-based insurance platform provider to a client of TCS, filed for a temporary restraining order against TCS last month, after accusing it of misappropriating its trade secrets. TCS, in turn, said CSC was trying to disrupt its $2-billion deal with their common client Transamerica.

A trade secret is misappropriated when it is acquired through “improper means,” noted the court ruling. “CSC acknowledges that TCS has access to the Vantage software because Money Services Inc (MSI), pursuant to its license agreement with CSC, has given TCS access as an MSI/Transamerica service provider. CSC fails to set forth sufficient evidence that TCS breached its duty pursuant to its obligations under the license agreement between CSC and MSI/ Transamerica,” noted the ruling, which Business Standard has reviewed.

The court has ordered both parties to submit a proposed discovery and briefing schedule for a preliminary injunction hearing. CSC licensed its software-to-customer MSI in 1994. In 2014, MSI onboarded TCS to manage IT services. At present, Transamerica owns MSI. TCS announced a $2-billion third party administration deal with Transamerica in 2018 for their life and annuity business. TCS would help TransAmerica to service over 10 million policies. TCS also provides end-to-end support and maintenance to their legacy applications.

TCS also rebadged 2,200 Transamerica employees after the deal. CSC claims the current TCS employees who had access to the CSC code were involved in the breach, as they attempted to replicate similar insurance functionalities on the TCS BaNCS platform.

“TCS is pleased that the court ruled in its favour, and denied CSC’s motion for a temporary restraining order. TCS goes to great lengths to safeguard any trade secrets with which it is entrusted, from whatever source. As part of those efforts, we have a strict code of conduct in place and stringent policies designed to meet all our legal and ethical obligations,” said a TCS spokesperson. As the case is still pending in court, TCS did not comment on the matter except to reiterate that CSC’s allegations have no merit.

TCS BaNCS is a global product with implementations serving over 25 million policies across global clients. 

Earlier, in response to the CSC lawsuit, TCS noted the TCS BaNCS software development team is located in a separate, designated delivery center in Kolkata and does not have the capability to access Transamerica’s internal electronic systems, including CSC’s information that might be stored on it.

TCS has tight controls including strong firewalls to ensure that TCS personnel providing support to legacy platforms and TCS BaNCS teams have no association.

CSC had originally cited access to an email chain between TCS and TCS Transamerica employees where the latter shared proprietary CSC information. However, the ruling noted that CSC could not prove that their code was actually shared with BaNCS team or used for the development of BaNCS software.