TCS, Wipro face fresh patent suits in US as legal woes mount for Indian IT firms

The rise in such cases over the past five years poses a double whammy for the country’s $283 billion IT industry, which is already struggling with low demand for IT services.

Over the years, local IT services companies have begun creating software platforms and products to expand their service offerings to their customers. This requires them to use certain technologies that are similar to those used by their peers. This leads to legal disputes between companies who claim that the codes they use in their technologies were copied by their peers.

Albuquerque-based Calibrate Networks LLC filed a patent infringement lawsuit against TCS in the Marshall division of Texas district court on Oct. 28 for using and selling a technology that specifically changes the names of software applications.

Patents are licenses granted to inventors that prohibit others from creating, using or selling such inventions for a certain period of time.

Calibrate said in its complaint that the nation’s largest IT services firm was illegally using its invention by selling products that use a particular technology to change software names. Calibrate said that this technology is covered by its own patent.

Simply put, if a software is a person named Jas who lives at 112 MG Road, as long as that software’s name is still Jas, mail can be sent to Jas regardless of his address. Similarly, TCS uses Kubernetes, a cloud management software that uses a specific technology to automatically change the location of software in an IT network.

Trial periods

Calibrate’s lawsuit states that TCS did wrong not only in using this technology but also in selling it to customers. The lawsuit also stated that TCS was directly aware of this breach and continued to use this technology.

“Despite such factual knowledge, Defendant (TCS) continues to manufacture, use, test, sell, offer for sale, market, and/or import into the United States products that infringe the ‘633 Patent. Upon information and belief, Defendant has also continued to sell Exemplary Defendant Products and distribute product literature and website materials that encourage end users and others to use its products in the customary and intended manner in violation of the ‘633 Patent.” Calibrate’s patent infringement complaint on October 28.

The complaint also stated that TCS continued to use the technology in question even after the complaint was filed.

Calibrate’s complaint states: “At least since this Complaint and related claim schedules were served, Defendant has continued to actively, knowingly, and knowingly promote infringement of the ‘633 Patent, literally or through equivalent doctrine, by selling Exemplary Defendant Products to its customers for use in end-user products in violation of one or more claims of the ‘633 Patent.”

Wipro problem

Less than a month later, a second company filed a similar complaint against Wipro.

Florida-based Mobility Workx LLC, which sells patents related to telecom networks, filed a complaint in the Texas district court’s Sherman Division on Nov. 18 accusing Wipro of infringing three of its patents related to wireless testing, cellular network access and 5G product testing services for customers.

He cited three aspects of patent infringement. First, it accused Wipro of selling wireless testing services and even providing access to cellular networks, each of which are covered by its patent.

Similar to the TCS case, Mobility added that Wipro was encouraging its customers to infringe a second ‘508 patent’, which refers to the ways in which smartphones maintain connectivity with telecom networks during transit.

Simply put, a person moving from Bengaluru to Mumbai will not lose internet connection or phone network during the trip, thanks to this technology that allows telecom companies to connect to cell towers in various locations before the person even reaches that place.

Wipro is also accused of copying a third ‘417 patent’, similar to the one mentioned above, which focuses on technology for relocating cell towers while travelling.

Mobility’s complaint also stated that Wipro was aware of the patent infringement before the complaint was filed.

“Prior to, or at least before the filing and service of this amended complaint, the Defendant (Wipro) knew of the infringing nature of the ‘508 Patent and the Accused Takeover Products/Services of others who are direct or indirect customers of the Defendant,” the complaint read.

According to Mobility, the Bengaluru-based IT services company continued to infringe the patent.

“However, Defendant continues to encourage or actively encourages customers of the Accused Emulation Products/Services to directly infringe the ‘508 Patent by making, using, selling, offering to sell, or importing the Accused Emulation Products/Services. Defendant does or did so knowing and knowing that customers of Defendant’s Accused Emulation Products/Services were engaging in such acts that directly infringe the ‘508 Patent,” the complaint states.

He also encouraged customers to violate the licence, he added.

According to the complaint, “Defendant also continues to manufacture, use, offer for sale, sell, and/or import the Accused Emulation Products/Services despite knowledge of the ‘508 Patent, thereby specifically intending and encouraging users of its products and services to infringe the ‘508 Patent through their ordinary use of the Accused Emulation Products/Services.”

Faced with Flak

Both Calibrate and Mobility sell patents to companies. They asked Texas courts for a jury trial and damages, but did not specify any amount. Calibrate is represented by Rabicoff Law LLC, while Mobility is represented by Machat & Associates PC and Zeisler PLLC.

For TCS, this lawsuit follows another negative decision by a Dallas court last week. The U.S. Court of Appeals upheld a Texas district court’s decision to fine TCS $194 million for stealing DXC Technology’s trade secrets while providing services to Transamerica to create its own banking software.

Two of the five largest face infringement suits, while a mid-sized peer faced a similar accusation two months ago.

On September 23, New Jersey-based IT services firm Natsoft Corp sued Hexaware Technologies for breach of contract and patent infringement, seeking $500 million, or one-third of Hexaware’s revenue, in damages. This made it one of the largest patent lawsuits filed against a company. Indian IT company.

In its complaint filed with the Illinois district court, Natsoft stated that Hexaware used application modernization software covered by nine patents developed by Updraft, the IT services company that Natsoft acquired in 2024.

A little more than a month later, Hexaware denied Natsoft’s claims.

“Our platforms are the result of original engineering and we will continue to focus on delivering value. We are confident that we will achieve a positive outcome once the facts are reviewed,” Srikrishna Ramakarthikeyan, CEO of Hexaware, said in a press release on October 27.

The company has denied all allegations in the lawsuit and “believes these allegations to be false and will be vindicated on all counts in this lawsuit.”

In-depth review of the software

According to one expert, such patent infringement cases are a result of the move towards deeper software offerings.

“As companies move from traditional services to more software-intensive services, the risk surface naturally expands. Indian IT firms are moving deeper into platform, cloud and AI-focused work, which increases the chance of tapping patented technologies in sensitive areas such as networks, mobility and automation,” said Phil Fersht, CEO of HFS Research.

Fersht added that three consecutive cases signal that global patent holders are watching this area closely and are willing to test their claims in court. “More than a referendum on Indian IT, this is a sign that the industry operates in higher-value, higher intellectual property zones where disputes are more common.”

India’s third largest IT firm, HCL Technologies Ltd, was also caught in the middle of a similar legal dispute with French IT firm Atos SE in April 2023. The Noida-based IT services company alleged that Atos failed to pay compensation for using two proprietary software products of International Business Machines Corp, which HCL acquired in 2018. HCLTech sought $132 million in damages from Atos for copyright infringement.

That same year, a court in Wisconsin ended a decade-long court battle by ordering TCS to pay Epic Systems $140 million for stealing trade secrets of its proprietary health records software to create a competing product.

more stress

A similar issue arose between Infosys Ltd and Cognizant Technology Solutions Corp in 2023. Cognizant accused Infosys of using trade secrets related to TriZetto, a software that processes healthcare claims, to create a competing product. Infosys accused Cognizant of anti-competitive and stifling competition. Both companies are still appealing the lawsuit.

However, Recent cases like TCS and Wipro do not bode well as both resulted in revenue decline in the first six months of the financial year. While TCS is experiencing a revenue decline for the first time, Wipro is in the midst of a recovery after ending the last two years with a revenue decline. TCS and Wipro closed last year with $30.18 billion and $10.51 billion respectively.

Fersht added that such cases can hamper their ability to win a settlement even if financial damages are resolved.

“Customers want confidence as they scale AI, cloud and network modernization programs, and any legal cloud around IP can raise questions during deal cycles,” Fersht said.

Emails sent to TCS and Wipro remained unanswered.