Court Slams TCS for 'Malicious Deceit' in $194M DXC Trade Secret Win

ASHBURN, VA. – January 14, 2026 – In a stinging rebuke for one of the world's largest IT service providers, the U.S. Court of Appeals for the Fifth Circuit has upheld a nearly $194 million judgment against Tata Consultancy Services (TCS) for the “willful and malicious” misappropriation of trade secrets from a subsidiary of DXC Technology.

The ruling, which affirms a Texas District Court’s decision, concludes a grueling six-year legal battle and sends a powerful message across the technology sector about the severe consequences of corporate espionage and intellectual property theft. The court's scathing language highlighted a pattern of deliberate wrongdoing by TCS, validating DXC's long and costly pursuit of justice.

A Landmark Ruling on Corporate Ethics

The Fifth Circuit’s decision, issued late last year, left little room for interpretation regarding TCS's conduct. The court affirmed the lower court's finding that “TCS had willfully and maliciously misappropriated CSC’s trade secrets.” The total award of approximately $194 million includes $56.1 million in compensatory damages, roughly $25.8 million in pre-judgment interest, and a staggering $112.3 million in punitive damages.

Punitive damages are reserved for cases of egregious misconduct, and the court's justification was explicit. The appellate judges pointed to “misrepresentations TCS made to its client” and stated that “the district court's fact finding shows that TCS's conduct involved repeated action and that TCS acted maliciously and through repeated deceit…”

The court concluded that there was an “ample basis to find that TCS’s conduct was intentional and showed ‘conscious disregard’ for CSC’s rights to their information.” This judicial condemnation underscores the severity of the infringement and deals a significant blow to the reputation of TCS, a company that operates in an industry built on trust.

DXC Technology welcomed the decision as a validation of its core principles. “Trust, ethics, and responsible innovation define how DXC operates,” said Raul Fernandez, Chief Executive Officer of DXC, in a statement. “This ruling reinforces the principles we stand for and reflects our unwavering commitment to protecting intellectual property, advancing innovation responsibly, and ensuring that the value we create benefits our customers, our people, and our shareholders.”

A Battle Over Insurance Software

The dispute originated in 2019 and centered on highly valuable intellectual property belonging to Computer Sciences Corporation (CSC), which merged with Hewlett Packard Enterprise’s services division to form DXC Technology in 2017. The lawsuit alleged that TCS illicitly accessed and used CSC's proprietary software for the life insurance and annuities industry, specifically its Vantage and CyberLife platforms.

CSC had licensed this software to a subsidiary of Transamerica. In 2018, TCS secured a massive $2 billion deal with Transamerica, which involved not only managing its insurance platforms but also transferring approximately 2,200 Transamerica employees to TCS’s payroll. CSC argued that TCS exploited this access to gain an unlawful competitive advantage. According to the lawsuit, TCS used its access to CSC's confidential source code and documentation to build and refine its own competing insurance platform, known as BaNCS.

The courts agreed, finding that TCS’s actions went far beyond the scope of its contractual rights. While the Fifth Circuit upheld the monetary damages, it did vacate a permanent injunction that had been placed on TCS, remanding that portion of the case back to the District Court for modification and reassessment based on its guidance. TCS, for its part, has acknowledged the adverse ruling and stated in regulatory filings that it is “evaluating various options, including review and appeal before the appropriate courts.”

A Troubling Pattern and Industry-Wide Implications

For industry observers, the ruling against TCS is particularly notable because it is not the first of its kind. In a highly publicized 2016 case, a Wisconsin jury found TCS liable for misappropriating trade secrets from healthcare software giant Epic Systems. The initial verdict in that case was for $940 million, though it was later reduced on appeal to $280 million. The existence of a prior, similar judgment for trade secret theft likely factored into the court's view of TCS's conduct as a pattern of behavior rather than an isolated incident.

This case is emblematic of a larger trend in the technology industry, where high-stakes litigation over intellectual property has become a key battleground. Companies like DXC invest billions in developing proprietary solutions, and protecting that IP is critical to their competitive advantage. The DXC vs. TCS verdict joins a list of recent multi-hundred-million-dollar and even billion-dollar judgments in cases like Appian v. Pegasystems and Motorola v. Hytera, highlighting the immense value of trade secrets in the digital economy.

The rise of the Defend Trade Secrets Act (DTSA) of 2016 has provided companies with a stronger federal framework to pursue such claims. As technology, particularly in areas like AI, becomes more complex, trade secrets are often the most viable way to protect innovations that may not be suitable for patent or copyright protection. This ruling reinforces that the legal system is prepared to impose severe financial penalties to deter theft.

For DXC, the $194 million award represents a significant financial and moral victory. While the company has faced a mixed financial performance in recent years, the influx of capital and, more importantly, the public vindication of its ethical stance, provides a substantial boost. For TCS, the financial penalty is manageable for a company of its size, but the reputational damage from a judicial finding of “malicious deceit” is far more difficult to quantify and may have lasting effects on its ability to win the trust of global clients. As businesses navigate an era of rapid technological change, the line between competition and misappropriation remains sharply defined by the courts, with profound consequences for those who cross it.