TCS To Take USD 70 Million Exceptional Charge After US Supreme Court Declines Review in DXC Technology Trade Secrets Case
TCS will take a USD 70 million charge in Q1 FY27 after the US Supreme Court declined to hear its appeal in a trade secrets case with DXC Technology. This brings TCS’s total exposure to USD 220 million. The case involved allegations of misappropriating life insurance software, which the company has consistently denied.
Tata Consultancy Services (TCS) has announced that it will record a one-time exceptional charge of 70 million USD in the first quarter of the 2027 financial year. This decision follows the United States Supreme Court's refusal to review a lower court ruling in a protracted trade secrets dispute involving DXC Technology. With this additional provision, the total financial exposure for the Indian IT giant in this legal matter has reached 220 million USD.
The Supreme Court’s refusal to grant the petition for a writ of certiorari effectively upholds the judgment of the United States Court of Appeals for the Fifth Circuit. This finalises the legal outcome regarding allegations that TCS misappropriated proprietary information related to life insurance software. TCS had previously made a provision of 150 million USD, and the incremental charge will cover the remaining damages, accrued interest, and associated legal costs. Sarvam AI Investment: HCLTech Shares Jump 2% as IT Major Becomes Lead Strategic Investor in Indian AI Startup.
Origin and development of the trade secrets dispute
The litigation originated in 2019 when Computer Sciences Corporation, now part of DXC Technology, filed a lawsuit in a Dallas federal court. The complaint alleged that TCS recruited approximately 2,200 employees from Transamerica and leveraged their access to proprietary systems to develop a competing life insurance administration platform. Throughout the proceedings, TCS maintained that it had accessed software lawfully and that the information in question was not confidential.
In 2023, a jury found TCS liable for wilful misappropriation of trade secrets, initially recommending damages of 210 million USD. U.S. District Judge Brantley Starr subsequently reduced this award to 168 million USD, consisting of 56 million USD in compensatory damages and 112 million USD in punitive damages. The Fifth U.S. Circuit Court of Appeals later upheld this reduced award in 2025.
During its appeal to the U.S. Supreme Court, TCS contended that DXC had been awarded damages based on "unjust enrichment" without demonstrating actual financial losses. Furthermore, the company argued that the punitive damages imposed were excessive under established U.S. trade secrets law. DXC Technology opposed the petition, successfully maintaining that the lower court’s application of the law was consistent and did not require further judicial review. YESBANK Stock Update: Shares Surge 2.57% Nearing 52-Week High.
For the IT services major, the USD 70 million charge represents a significant, albeit singular, financial adjustment. The company continues to demonstrate robust overall performance, recently reporting a net profit of INR 13,718 Crores (approximately USD 1.45 billion) for the fourth quarter of the previous financial year. This legal conclusion brings an end to a high-profile case that has spanned nearly seven years of complex litigation in the American judicial system.
(The above story first appeared on LatestLY on Jun 16, 2026 01:21 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
