TCS Faces $70 Million Hit in US Trade Secrets Case
The charge takes the Indian IT major’s total exposure in a long-running DXC trade-secrets case to $220 million.
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Tata Consultancy Services Ltd (TCS) will book an additional $70 million exceptional charge after the US Supreme Court declined to hear its appeal in a trade-secrets case involving DXC Technology, taking the Indian IT services company’s total exposure in the matter to $220 million.
TCS told stock exchanges that the Supreme Court on June 15 denied its petition for a writ of certiorari seeking a review of a judgment by the US Court of Appeals for the Fifth Circuit.
The company said it had already recognized $150 million in the case under applicable accounting standards. It will now make an additional provision of $70 million toward damages, interest and legal costs as a one-time exceptional expense in the first quarter of FY2027.
The charge will weigh on reported earnings for the quarter but is not expected to affect the company’s operating plans.
The Supreme Court’s decision leaves in place a $168 million damages award in favor of DXC Technology, comprising $56 million in compensatory damages and $112 million in punitive damages.
DXC Technology is a US-based IT services company that inherited the dispute through Computer Sciences Corp., or CSC, which became part of DXC after its 2017 merger with Hewlett Packard Enterprise’s enterprise services business.
CSC had licensed its life-insurance software to Transamerica in the 1990s, according to Reuters.
The legal dispute dates back to 2019, when CSC sued TCS in the federal court in Dallas. CSC alleged that TCS hired about 2,200 former Transamerica employees and used their access to CSC’s software and proprietary knowledge to build a competing life-insurance platform.
TCS denied the allegations, arguing that the information at issue was not secret and that it had accessed the software lawfully.
In 2023, an advisory jury recommended that TCS pay DXC $210 million for willfully misappropriating CSC’s trade secrets.
US District Judge Brantley Starr later reduced the award to $168 million. The Fifth Circuit upheld the award in 2025.
TCS argued before the Supreme Court that DXC should not have received unjust-enrichment damages without proving actual losses and that the punitive damages award was excessive. DXC opposed the appeal, arguing that the lower court’s ruling did not warrant further review.
The Supreme Court’s refusal to take up the case leaves the lower-court award intact and requires TCS to absorb the additional provision in the June quarter.
