Computer Sciences Corp (CSC), a US-based insurance platform provider to a client of software major Tata Consultancy Services (TCS) had accused the latter of misappropriating its trade secrets in a lawsuit filed with a US district court last week. TCS has stated that CSC is trying to disrupt the $2 billion dollar business deal with the common client, Transamerica.
“Likely upset about Transamerica’s decision to transition from Vantage (CSC software) to TCS’s BaNCS Platform, CSC appears determined to disrupt the legitimate business relationship between Transamerica and TCS,” wrote TCS in a response filed with the Northern District Court of Texas.
TCS said, it has never used CSC’s proprietary data for TCS’s own benefit and certainly has not used any such information to develop a competing product given that the BaNCs team is based out of Kolkata, India, and not with the Transamerica team in US.
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. 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 alleged that TCS was facing difficulty in creating a similar complex platform and was thus accessing the company's proprietary code to develop a TCS product. The response also noted that the Transamerica and BaNCs teams report to different organisation heads due to confidentiality agreements.
“CSC’s presumption is apparently based entirely on the “understanding” of CSC employee Ashish Barnwal who claims to believe that TCS employees located in Cedar Rapids (US) are responsible for developing a life insurance and annuities policy administration and processing computer program and that this product is called “BaNCS”,” wrote TCS.
Physically, the TCS BaNCS Software Development Team is located in a separate, designated delivery center in Kolkata, India and does not have the capability to access Transamerica’s internal electronic systems, including CSC’s information which might be stored on it, said TCS. Prior to filing the lawsuit, CSC did not reach out to anyone at TCS regarding the content of the email chain for an explanation or to express any concerns.
Further it noted that the email chain cited by CSC as evidence of TCS’ misappropriation was in fact following a query raised by Transamerica employee who wanted to understand how CSC was implementing a specific requirement. “Mr. Barnwal’s belief, however, not only is not evidence, it is wrong”.
CSC had licensed its software to customer Money Services Inc (MSI) in 1994 and in 2014 MSI onboarded TCS 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.
TCS works with eight of the top ten banking, financial services and insurance (BFSI) companies in the US. 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 with platforms like BaNCs has been one of the defining factors for their rapid growth over the past decade.
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.
- CSC alleged TCS was facing difficulty in creating a complex platform, hence using its proprietary code to develop a TCS product
- CSC says its Vantage & Cyberlife systems were created after decades of research and millions in investment by CSC and predecessors