In a major setback for Tata Consultancy Services, a US appeals court has confirmed a $194 million penalty for stealing trade secrets from DXC Technology. The ruling came on November 21, 2025, in a case that started back in 2019 and involves claims of misused software details.
This decision by the Fifth Circuit Court of Appeals keeps the full damages in place but sends part of the case back to a lower court for review. TCS, India’s biggest IT company, now faces a big financial hit and plans to fight back with more appeals.
Background of the Long-Running Legal Battle
The dispute began when Computer Sciences Corporation, now part of DXC Technology, sued TCS in 2019. They claimed TCS wrongfully accessed and used their secret software codes and documents.
This all tied to a deal with Transamerica, where TCS got hold of DXC’s Vantage-One platform details. Court findings showed TCS employees shared and copied this info without permission, leading to the misappropriation ruling.
Over the years, the case has moved through courts, with a jury first finding TCS guilty in 2023. That led to an initial $210 million penalty, later adjusted to $194 million after reviews.
DXC argued that TCS used the stolen secrets to build its own competing software, giving it an unfair edge in the insurance tech market. TCS has always denied the claims, saying it developed its tools independently.
The fight highlights growing concerns in the IT world about protecting intellectual property during big contracts and mergers.
Details of the Recent Court Ruling
On November 21, 2025, the US Court of Appeals for the Fifth Circuit issued its decision. It upheld the $194.2 million in damages, which includes both compensatory payments and punitive fines.
The court agreed with the lower court’s view that TCS broke trade secret laws. However, it threw out an earlier injunction that stopped TCS from using certain software.
Judges sent the injunction back to the district court in Texas for a fresh look. They want the lower court to check if the ban is still needed based on current facts.
This partial win for TCS means it can keep operating without the full restrictions for now. But the upheld damages remain a heavy burden.
TCS quickly responded in a stock exchange filing, calling the ruling adverse but vowing to explore all legal paths. The company said it would adjust its books to cover the costs as required by accounting rules.
Financial Impact on TCS and DXC
TCS, with a market value over $150 billion, can likely handle the $194 million hit. But it adds to past fines and hurts its clean image in global markets.
In 2024, TCS reported strong earnings, with revenue up 5 percent to about $30 billion. This penalty equals roughly 0.6 percent of that yearly income.
For DXC, the win boosts its position after years of legal costs. The company, formed from a 2017 merger, has faced its own challenges, including falling stock prices.
Experts say this case could set rules for how IT firms handle client data in outsourcing deals. It might lead to tighter contracts and more checks on data sharing.
Here is a quick breakdown of the damages awarded:
| Damage Type | Amount (in millions) | Purpose |
|---|---|---|
| Compensatory | $56 | To cover DXC’s direct losses |
| Exemplary (Punitive) | $100 | To punish TCS for wrongdoing |
| Prejudgment Interest | $18 | Interest on the main amounts |
| Other Costs | $20.2 | Legal fees and related expenses |
This table shows how the total adds up to $194.2 million.
Broader Implications for the IT Industry
This ruling sends a strong message to tech companies worldwide about the risks of trade secret theft. In the US, laws like the Defend Trade Secrets Act give tough protections and big penalties.
Indian IT giants like TCS, Infosys, and Wipro often work with US firms, so they must now be extra careful with data. Similar cases have hit other companies, like a 2024 dispute where a Chinese firm paid $100 million for stealing chip designs.
Industry leaders worry this could slow down innovation if firms fear sharing info in partnerships. On the flip side, it pushes for better ethics and security in global tech services.
Key takeaways for businesses from this case include:
- Always use clear non-disclosure agreements in deals.
- Train staff on handling sensitive data.
- Run regular audits to spot any misuse early.
- Seek legal advice before accessing partner tech.
These steps can help avoid costly court fights.
What Happens Next for TCS
TCS has options like asking the appeals court to rethink or going to the US Supreme Court. Experts think a Supreme Court appeal is a long shot, but possible if big legal questions remain.
The company stressed it will defend itself strongly. Meanwhile, the district court will review the injunction soon, which could change how TCS uses certain tools.
Investors watched closely, with TCS shares dipping slightly after the news. Analysts say the firm’s strong fundamentals should help it bounce back.
Reactions from Stakeholders and Experts
Business groups in India called the ruling unfair, pointing to TCS’s role in job creation and tech growth. Some say it shows bias against foreign firms in US courts.
DXC welcomed the decision, saying it protects innovation. Legal experts note the case as a win for trade secret holders, but warn of appeals dragging on.
Social media buzzed with opinions, from support for TCS to calls for better corporate ethics. One analyst tweeted that this highlights the need for global rules on tech secrets.
As this story develops, readers should watch for updates on any new appeals or settlements. What do you think about this ruling? Share your thoughts in the comments below and pass this article along to spark discussion.
