Computer Sciences Corp (CSC) is suing India’s largest IT major TCS for accessing CSC’s source code to build its own insurance platform for the US market.
In the lawsuit filed in Texas on last week by the US-based IT services firm, the company has alleged that TCS is “improperly accessing and using CSC’s proprietary software to develop the TCS product and steal CSC’s customers.” CSC is seeking punitive damages for the same.
This is the second such lawsuit against the IT major. The first case was by Epic Systems, which alleged that TCS stole its documents. While the initial fine was close to $940 million, it was later brought down to $420 million by another court. TCS has appealed against this in a federal court.
“TCS is aware of CSCs court filing. Our legal team is reviewing the allegations and will respond appropriately. TCS BaNCS is a comprehensive product with several successful implementations globally. TCS will strongly defend its position before the court. As this is a pending legal matter, TCS would not like to comment further at this time,” a TCS spokesperson told Moneycontrol.
CSC is a subsidiary of DXC Technology Corporation and owns software platforms such as Vantage and CyberLife to process life insurance and annuity policies. The company licensed the two platforms to Money Services Inc (MSI) since 1994. The suit said that MSI processed close to 10 million life insurance and annuity policies of TransAmerica, its parent company.
In 2014, MSI began using TCS to provide support to maintain its IT systems. This included maintenance of some of CSC’s software systems that resided on MSI’s servers.
In January 2018, TCS partnered with TransAmerica in a 10-year deal worth over $2 billion. The IT major said that it would use its BaNCS software system to offer insurance processing services.
As a part of the deal, TCS hired 2,200 TransAmerica (or MSI) employees, who have been administering and processing policies using CSC software systems. CSC said in the lawsuit that some of these employees still had access to the company’s source code and other confidential and proprietary CSC information as a part of its licensing agreement.
CSC said in its lawsuit, “TCS is using this access to and knowledge of the CSC source code, software documentation, and other proprietary and confidential CSC information to develop TCS’ BaNCS for the US.”
The lawsuit further pointed out that CSC learned at the end of March 2019 that the TCS employees assigned to developing its BaNCS platform encountered difficulties devising a software solution and used CSC’s Vantage source code for the same.
“Over the course of three weeks, TCS employees then accessed and analysed both the proprietary CSC software documentation and the Vantage source code to try to determine the method and process by which Vantage calculates this particular rate of return,” CSC said in its lawsuit.
“Unless TCS is stopped from proceeding with these unjust efforts, TCS will be able to develop and launch a life insurance and annuities platform that is based on business and software solutions brazenly stolen from CSC,” the lawsuit added.
According to Statista, the US was the leading life insurance premium-writing country in 2017, with a total value of life direct premiums written amounting to $546.8 billion.
The lawsuit explained that the misappropriation of CSC’s trade secrets would allow TCS to develop BaNCS into a competitive product emulating CSC’s successful products, reduce the investment of time and resources, and be a short-cut to the otherwise years-long development process.
“Having learned nothing from the outcome of the Epic litigation or the massive judgment entered against it, TCS continues to improperly access, copy and make improper use of CSC’s source code, trade secrets and proprietary information,” lawsuit added.
In addition to damages, the company is also seeking permanent injunction to prevent TCS and its employees from using CSC’s source code to develop BaNCS platform.