TCS to take hit of $125M in Q3 FY24 due to US court case
TCS faced a lawsuit from US healthcare technology company, EPIC Systems, which alleged patent infringement and other violations.
Tata Consultancy Services (TCS), India’s largest technology services exporter, will make a provision of $125 million in its financial statement for the third quarter of the current financial year (FY24) following its legal dispute with EPIC Systems in the US.
In a notice to the stock exchanges, TCS noted that the United States Supreme Court had rejected its petition to file an appeal against a lower court’s order asking TCS to pay punitive damage of $140 million to EPIC Systems in a patent infringement case.
“The Company intends to make the balance provision of approximately $125 million in its financial statements as an exceptional item, for the third quarter and nine months ending December 31, 2023,” the statement from TCS said.
The case dates back to 2014 when EPIC Systems, a healthcare technology company, filed a lawsuit against TCS and Tata America International Corporation accusing the companies of stealing trade secrets, confidential information, documents and data. It sought $940 million in damages from TCS.
Following court cases, the fine against TCS was reduced from $280 million to $140 million.
TCS continued in its statement, “We hereby inform you that in the EPIC Systems Corporation matter, the United States Supreme Court on November 20, 2023, rejected the Company’s petition to file an appeal against the orders passed by the US Court of Appeals, 7th Circuit, which confirmed the punitive damages award of USD 140 million passed by the District Court of Wisconsin.”
TCS reported a revenue of $7.2 billion for the second quarter of the current fiscal with a net profit of $1.37 billion.
Edited by Suman Singh