Syntel urges court to overturn $855m trade secrets verdict
Technology company Syntel has asked a New York judge to undo the $855 million verdict it’s facing over the misappropriation of trade secrets and copyright infringement.
Syntel, in a motion and memorandum filed on Friday, December 4 at the US District Court for the Southern District of New York, argued that the jury’s “liability determinations, and its decision to award this vast amount of damages, are contrary to the law and are not supported by the evidence presented at trial”.
Syntel had filed suit against Cognizant Technology Solutions and its TriZetto Healthcare subsidiary back in 2015, accusing the companies of breach of contract.
But the defendants hit back with counterclaims, alleging trade secret misappropriation and copyright infringement, in addition to breach of contract claims and claiming that the suit was part of Syntel’s “campaign to sabotage Cognizant and TriZetto in order to gain unlawful competitive advantages”.
In late October, a New York jury hit Syntel with the verdict, which found that the technology company had misappropriated more than 100 trade secrets related to insurance administrative software from competitor Cognizant and TriZetto.
The jury also found that Syntel had infringed copyright-protected software related to an insurance administrative platform owned by Cognizant.
TriZetto and Cognizant were awarded $284.8 million in damages and $569.7 million in punitive damages, according to the verdict.
Now, Syntel—which has since been acquired by Atos—has asked the court to overturn the verdict, claiming that the damages are “not proportional to any alleged bad acts by Syntel, and go far beyond the constitutional limits of what is permitted to punish Syntel or deter future behaviour”.
Syntel also alleged that all of TriZetto’s trade secret and copyright infringement claims are barred by waiver and laches, as TriZetto had irrevocably waived its claims as a result of an amended master services agreement (MSA) signed in 2012.
According to Syntel, a 2010 MSA prevented Syntel from competing with TriZetto and from using TriZetto’s confidential information to compete, but this was subsequently amended at TriZetto’s request and “in exchange for tens of millions of dollars in reduced commitments to Syntel, TriZetto affirmatively and expressly removed all restrictions on Syntel’s right to compete”.
Syntel further argued that no reasonable jury could have found for TriZetto on its trade secret claims, because the company had failed to identify any of its 104 alleged trade secrets with the specificity required under both the Defend Trade Secrets Act and New York law.
It added: “At most, the record supports an award of $8.5M in punitive damages, equal to the actual harm to TriZetto, in the form of its lost profits, as to which any quantification was offered at trial.”
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