TCS fined $940m in US for ‘stealing’ healthcare software

TCS fined $940m in US for ‘stealing’ healthcare software
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Story Dated : April 17, 2016

Washington: A Wisconsin federal jury on Friday slapped a $940 million penalty, including $700 million in punitive damages, on Tata Consultancy Services (TCS) for allegedly stealing healthcare software from an American company, Epic Systems.

The verdict is one of the most adverse handed down to an Indian company abroad. The software giant said it would appeal against it, as it can within 30 days of the trial judgment under US law.

TCS said it had not misused or derived any benefit from documents downloaded from Epic System’s user web portal.

“While TCS respects the legal process, the jury verdict on liability and damages was unexpected as the company believes they are unsupported by the evidence presented during trial. TCS plans to defend its position vigorously in appeals… TCS appreciates the trial judge’s announcement… that he is almost certain he will reduce the damages award,” it said.

The jury verdict would not have an impact on its Q4 results due to be announced on Monday, TCS claimed.

Epic Systems, a US based electronics medical records vendor, had accused TCS of stealing documents and other confidential information tied to the software it builds for healthcare companies to manage billing, insurance benefits management and referral services.

It said a TCS employee reviewed Epic’s intellectual property under the pretence of doing consulting work for Kaiser Permanente, the largest managed health care company in the US, and in doing so downloaded Epic’s proprietary software to help build a rival system.

TCS maintained in its statement that it did not misuse or benefit from any of the said information for development of “Med Mantra’ which it implemented for Apollo Hospitals in India in 2009.

According to Epic, Kaiser Permanente had contracted it to handle its patient records in 2003.

In 2005, TCS employees requested access to the company’s sensitive internal web under the guise of being Kaiser Permanente employees in need of training.

Kaiser confirmed to Epic that the consultants were working for it, whereupon Epic had the workers sign a privacy contract to keep the inner workings of its software secret.

But Epic alleges that TCS contractors accessed Epic’s internal network to download the entire suite to help TCS build a competing product called Med Mantra. In one instance, Epic said a TCS employee used his access to Epic UserWeb to download at least 6477 documents, 1687 unique files, from an IP address outside the United States.

“The vast majority of the stolen data was not required for TCS to provide consulting services to Epic’s customer,” the complaint states. “To the contrary, much of the data wrongfully taken from Epic, if used improperly, would provide an unfair development and design advantage for TCS’s competing medical management software called Med Mantra.”

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