Cognizant wins trade secret case in US court against Syntel

In a major victory for Cognizant Technology Solutions, a jury in the US District Court for the Southern District of New York found that Syntel, now part of French firm Atos, was liable for trade secret misappropriation and copyright infringement, and levied damages on Syntel. Cognizant and its subsidiary TriZetto will get approximately $855 million in damages.

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The lawsuit was filed in 2015 by Syntel, accusing Cognizant and its subsidiary of interfering with a contract and misappropriating confidential information. Cognizant had acquired TriZetto in September 2014 for $2.7 billion from private equity firm Apax Partners LLP, and closed the acquisition in November.

In a lawsuit filed in US District Court in Manhattan in January 2015, Syntel Sterling Best Shores Mauritius Ltd sought $3.4 million from TriZetto and $6.1 billion in punitive damages based on Cognizant’s net worth, according to a Reuters report published then.

On the jury’s verdict, Atos, in a statement on Wednesday, said that the case started in 2015 between Syntel and TriZetto and predated the 2018 acquisition of Syntel by Atos.

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To file motion: Atos

The company has already filed a motion challenging the validity of TriZetto’s claims and will immediately seek to file a further motion to overturn the verdict. These motions will be decided by the judge presiding over the case. If these motions were denied, Atos would have the right to appeal, it added.

Atos considers that the jury’s verdict is not supported by the evidence presented during the trial or the applicable law. In addition, Atos considers the amount of damages grossly out of proportion to the acts complained of, it added.

As Atos argued at trial, the maximum amount of damages legally available to TriZetto in this case is approximately $8.5 million. Atos confirms this position, the statement said.

Jan Siegmund, CFO, Cognizant, while discussing the third quarter financial results, told analysts that the lawsuit has a long history. “At the core is our claim that Syntel misappropriated TriZetto’s intellectual property related to some software products during that time. Syntel was a transacted subcontractor and the jury verdict, which found no liability for TriZetto or Cognizant, basically speaks for itself. We are gratified with the result,” he said.