The U.S. Supreme Court has denied a petition filed by Epic Systems to reverse a reduction in damages awarded to the electronic medical records company in a 2016 trade secret lawsuit against Tata Consultancy Services (TCS).
That lawsuit had originally awarded Epic $940 million in total damages, including $240 million in compensatory damages and $700 million in punitive damages, after the company sued TCS and its subsidiary Tata America International Corporation (Tata) for stealing trade secrets.
Since then, though, state and federal courts have cut those numbers down to $280 million in total damages.
Epic petitioned to reverse the most recent cutback, which saw its punitive damages award slashed in half from $280 million to $140 million, with the petition for a writ of certiorari filed in April 2021 and declined by the Supreme Court this week.
Epic declined to comment on the litigation.
In the original lawsuit, filed in 2014 and amended in 2015, Epic claimed that a TCS employee posed as a Kaiser Foundation Hospitals employee to create an account on Epic’s proprietary system while working to help install that software at a Kaiser facility in Portland, Oregon.
The creation of that account then allowed TCS employees in the U.S. and India to download more than 6,000 files to inform the development of the IT company’s competing software, called Med Mantra, Epic alleged.
TCS apparently created a “comparative analysis” spreadsheet comparing Med Mantra with Epic’s software in an attempt to compete in the U.S. EHR systems market, according to the lawsuit.
The federal court jury in Wisconsin found TCS and its subsidiary guilty on seven claims including misappropriation of trade secrets, breach of contract, unfair competition and unfair enrichment.
Tata maintained that it “did not misuse or derive any benefit from downloaded documents from Epic System’s user-web portal,” according to a statement issued after the 2016 decision.
That statement also claimed that the trial judge said from the bench that he was “almost certain he will reduce the damages award.”
Epic was awarded $140 million in compensatory damages for the benefits TCS drew from the use of the comparative analysis spreadsheet, $100 million for the benefits TCS got from using Epic’s other confidential information and $700 million in punitive damages.
The original amount awarded made for one of the largest trade secrets payouts ever until the damages were reduced.
In 2017, the district court upheld the $140 million award but vacated the $100 million award for uses of “other information” and reduced the $700 million punitive damages award to $280 million, in line with Wisconsin law which states punitive damages may not exceed twice the amount of compensatory damages.
Three years later, though, the Seventh Circuit claimed the punitive damages were “constitutionally excessive” and recommended the district court reduce punitive damages to a $140 million maximum.