Computer Sciences Corporation v. Tata Consultancy Services Limited et al
Filing
37
Memorandum Opinion and Order denying 6 Motion for TRO filed by. The court directs the parties to submit a proposed discovery and briefing schedule by 5/13/2019. (Ordered by Judge Sam A Lindsay on 5/9/2019) (rekc)
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
COMPUTER SCIENCES
CORPORATION,
Plaintiff,
v.
TATA CONSULTANCY SERVICES
LIMITED, TATA AMERICA
INTERNATIONAL CORPORATION,
and DOE DEFENDANTS 1-10,
Defendants.
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Civil Action No. 3:19-cv-970-L
MEMORANDUM OPINION AND ORDER
Before the court are Plaintiff’s Application for Temporary Restraining Order, Expedited
Discovery, and Order to Show Cause for Preliminary Injunction (Doc. 6), filed April 22, 2019;
Defendants’ Opposition to Plaintiff’s Application (Doc. 22), filed April 29, 2019; and Plaintiff’s
Reply (Doc. 26), filed May 1, 2019. After considering the application, supporting evidence, and
applicable authority, the court denies Plaintiff’s Application for Temporary Restraining Order and
orders the parties to submit a proposed discovery and briefing schedule and suggested date for the
preliminary injunction hearing.
I.
Factual and Procedural Background
Plaintiff Computer Sciences Corporation (“Plaintiff” or “CSC”) is a provider of life
insurance and annuities software systems and services. Pl.’s Appl., Doc. 7 at 7. CSC developed a
proprietary software system, VANTAGE-ONE / Wealth Management Accelerator (“Vantage”),
that performs calculations such as policy and fund valuations, rates of return, and cost of insurance
Memorandum Opinion and Order – Page 1
calculations. Pl.’s Appl., Doc. 7 at 7-8. CSC contends that its software source code and associated
user manuals, contain trade secrets and are marked as confidential and proprietary. Id.
CSC licenses the Vantage software to customers pursuant to confidentiality and
nondisclosure agreements that impose “strict limitations” on the use of the software. Id. The
customer must limit who is able to access the source code, and CSC employees directly manage
and support the customer’s access to the software. Pl’s Appl., Doc. 7 at 9.
One of CSC’s customers with access to Vantage source code is Money Services, Inc.
(“MSI”). Id. MSI is a subsidiary of Transamerica. Id. Under the license agreement between
MSI/Transamerica and CSC, MSI is authorized to share access to Vantage with third parties,
provided that the third party is bound by confidentiality and nondisclosure provisions and does not
use the software to benefit itself. Pl.’s Appl., Doc. 7 at 10. MSI/Transamerica provides such thirdparty access to one of its service providers, the defendants in this case, Tata Consultancy Services
Limited, Tata America International Corporation, and Doe Defendants 1-10 (collectively,
“Defendants” or “TCS”). Pl.’s Appl., Doc. 7 at 11.
In January 2018, TCS announced that it reached a deal with Transamerica to adapt its
software platform, BaNCS, to perform life insurance and annuities administration for
TransAmerica. Pl.’s Appl., Doc. 7 at 6; Defs.’ Resp., Doc. 22 at 8. Although Transamerica
currently uses CSC’s Vantage software to perform its operations, the deal with TCS anticipates
the eventual transition of Transamerica from the Vantage software to TCS’s BaNCS software.
Def.’s Resp., Doc. 22 at 8. As a result of the deal, TCS now employs former MSI/Transamerica
employees, some of whom have access to CSC’s Vantage software pursuant to the license
arrangement between CSC and MSI/Transamerica. Pl.’s Appl., Doc. 7 at 11.
On March 25, 2019, Ashish Barnwal (“Barnwal”), a CSC employee who maintains an
office at the MSI/Transamerica facility to oversee the use of Vantage software, was copied on an
Memorandum Opinion and Order – Page 2
e-mail thread, the contents of which give rise to this lawsuit and a copy of which is attached as
“Exhibit A” to Barnwal’s Declaration. Pl.’s Appl., Doc. 7 at 13. The e-mails include a discussion
among TCS and MSI/Transamerica employees regarding how the Vantage software program
performs rate of return calculations. Pl.’s Appl., Doc. 7 at 11-13. CSC contends that these e-mails
are evidence that TCS is misappropriating its trade secrets, namely, the Vantage source code and
its accompanying user manual describing the calculation. Pl.’s Appl., Doc. 7 at 12-13. CSC alleges
that TCS is misappropriating the Vantage source code and user manual to develop its competing
BaNCS software system, pursuant to its deal with TransAmerica. Pl.’s Appl., Doc. 7 at 10, 17.
Upon discovering the existence of these e-mails from its employee Barnwal, CSC filed this
action on April 22, 2019, alleging claims against Defendants for trade secret misappropriation
under the Defend Trade Secrets Act (“DTSA”) and Texas Uniform Trade Secrets Act (“TUTSA”),
unfair competition, conspiracy, tortious interference with prospective economic advantage, and
conversion. By separate application, CSC filed the Motion for Temporary Restraining Order,
Expedited Discovery, and Order to Show Cause for Preliminary Injunction. Specifically, CSC
requests that the court issue a temporary restraining order that enjoins Defendants from:
i.
Acquisition, disclosure, or use of CSC’s software, source code,
software documentation, or any part thereof, and CSC’s confidential
and proprietary processes, methods, techniques, and compilations
(collectively, “CSC Information”) in connection with the
development or use of Defendants’ own products (including
BaNCS);
ii.
Acquisition, disclosure, or use of CSC Information except as
authorized by CSC and necessary to provide TCS’ contractuallyobligated services to MSI;
iii.
To the extent that Defendants assert that acquisition, use or
disclosure of CSC Information is authorized and necessary to
provide TCS’ contractually-obligated services to MSI, Defendants
shall identify to CSC: (1) the specific CSC Information that has been
or will be acquired, disclosed, or used; (2) the specific contractuallyobligated service that necessitates such acquisition, disclosure or
Memorandum Opinion and Order – Page 3
use; (3) the reason such acquisition, disclosure, or use is necessary;
(4) the name(s) of the MSI employee(s) and business unit who
authorized the work; and (5) the name(s) of Defendants’
employee(s) who need to acquire, disclose or use the CSC
information, and for how long, within three days of this order.
Pl.’s Appl., Doc. 7 at 14 (emphasis added).
II.
Legal Standard
The purpose of a temporary restraining order is to “preserv[e] the status quo and prevent[]
irreparable harm just so long as is necessary to hold a hearing, and no longer.” Granny Goose
Foods, Inc. v. Bhd. Of Teamsters & Auto Truck Drivers, 415 U.S. 423, 439 (1974). Any temporary
restraining order, therefore, is a temporary measure to protect rights until a hearing can be held.
Federal Home Loan Morg. Corp. v. American Home Mortg. Corp., 2007 WL 2228619, at *2 (N.D.
Tex. 2007).
There are four prerequisites for the extraordinary relief of a temporary restraining or
preliminary injunction. A court may grant such relief only when the movant establishes that:
(1) there is a substantial likelihood that the movant will prevail on
the merits; (2) there is a substantial threat that irreparable harm will
result if the injunction is not granted; (3) the threatened injury [to
the movant] outweighs the threatened harm to the defendant; and (4)
the granting of the preliminary injunction will not disserve the
public interest.
Clark v. Prichard, 812 F.2d 991, 993 (5th Cir. 1987); Canal Auth. of the State of Florida v.
Callaway, 489 F.2d 567, 572 (5th Cir. 1974) (en banc). The party seeking such relief must satisfy
a cumulative burden of proving each of the four elements enumerated before a temporary
restraining order or preliminary injunction can be granted. Mississippi Power and Light Co. v.
United Gas Pipeline, 760 F.2d 618, 621 (5th Cir. 1985); Clark, 812 F.2d at 993. Otherwise stated,
if a party fails to meet any of the four requirements, the court cannot grant the temporary restraining
order or preliminary injunction.
Memorandum Opinion and Order – Page 4
III.
Analysis
CSC argues that it is likely to succeed on the merits of its claims for trade secrets
misappropriation, unfair competition, and tortious interference with prospective business
relationships. The court determines that, at this stage, CSC has failed to demonstrate that there is
a substantial likelihood that it will succeed on the merits of each of its claims and, accordingly, the
court need not reach the remaining three elements.
A. Trade Secret Misappropriation
To state a claim under the DTSA, a plaintiff must allege: (1) a trade secret; (2)
misappropriation; and (3) use in interstate commerce. 18 U.S.C. § 1836; Blue Star Press, LLC v.
Blasko, No. SA-17-CA-111-OLG (HJB), 2018 WL 1904835, at *2 (W.D. Tex. Mar. 6, 2018).
Similarly, to establish trade secret misappropriation under Texas law, a plaintiff must show: (1) a
trade secret; (2) Defendants acquired the trade secret by breach of a confidential relationship or
other improper means; and (3) Defendants used the trade secret without authorization. Gen.
Universal Sys., Inc. v. HAL, Inc., 500 F.3d 444, 449 (5th Cir. 2007) (citations omitted).
Under both the DTSA and TUTSA, misappropriation includes (1) “disclosure or use of a
trade secret of another without express or implied consent by a person who ... used improper means
to acquire knowledge of the trade secret” and (2) “acquisition of a trade secret of another by a
person who knows or has reason to know that the trade secret was acquired by improper means.”
Tex. Civ. Prac. & Rem. Code § 134A.002(3); 18 U.S.C. § 1839(5). “Improper means” include the
“breach or inducement of a breach of a duty to maintain secrecy.” Tex. Civ. Prac. & Rem. Code §
134A.002(2); 18 U.S.C. § 1839(6)(A).
As a preliminary matter, the court is satisfied that the proprietary information at issue—the
Vantage source code and user manual—is entitled to trade secret protection. Under both the DTSA
and TUTSA, a trade secret is defined as information, including programs or codes, that the owner
Memorandum Opinion and Order – Page 5
has taken reasonable measures to keep secret and which derives independent economic value from
not being generally known or readily ascertainable through proper means. See TFC Partners, Inc.
v. Stratton Amenities, LLC, 2010 WL 369152, at *2 (W.D. Tex. Jan. 30, 2019); 18 U.S.C. §
1839(3); Tex. Civ. Prac. & Rem. Code § 134A.002(6). At the temporary restraining order stage, a
court does not determine that the information at issue is a trade secret; rather, it determines
“whether the applicant has established that the information is entitled to trade-secret protection
until the trial on the merits.” First Command Financial Planning, Inc. v. Velez, 2017 WL 2999405,
at *8 (N.D. Tex. May 8, 2017). To establish entitlement to trade secret protection, the owner must
take “reasonable measures under the circumstances to keep the information secret” and the
information must derive economic value from not being generally known or readily ascertainable
through proper means. 18 U.S.C. § 1839(3); Tex. Civ. Prac. & Rem. Code § 134A.002(6).
At this stage, CSC has adequately alleged that the Vantage software system and
accompanying user manual is entitled to trade secret protection and that CSC took reasonable
measures under the circumstances to keep Vantage secret by “using technological and physical
security systems, limiting access and use of CSC software, source code, and documentation,
marking the source code and documentation as confidential and proprietary, and imposing strict
confidentiality, non-disclosure and non-use requirements on those with access to the software,
source code and documentation.” Pl.’s Appl., Doc. 7 at 17.
The court determines, however, that CSC has not adequately shown a substantial likelihood
that it will succeed on the merits of this claim with respect to whether TCS misappropriated the
trade secrets. As previously discussed, a trade secret is misappropriated when it is acquired through
“improper means,” which includes a “breach or inducement of a breach of a duty to maintain
secrecy.” Tex. Civ. Prac. & Rem. Code § 134A.002(2); 18 U.S.C. § 1839(6)(A). CSC
acknowledges that TCS has access to the Vantage software because MSI, pursuant to its license
Memorandum Opinion and Order – Page 6
agreement with CSC, has given TCS access as an MSI/TransAmerica service provider. Pl.’s Appl.,
Doc. 7 at 11. CSC fails to set forth sufficient evidence that TCS breached its duty pursuant to its
obligations under the license agreement between CSC and MSI/Transamerica. CSC alleges that
the e-mails show that TCS improperly disclosed the Vantage source code to the BaNCS software
development team so that BaNCS can “emulate” what Vantage does today. Pl.’s Appl., Doc. 7 at
18. As evidence of its contention, CSC refers to an e-mail sent on March 25, 2019, by Charlie
Plathe (“Plathe”) (a Transamerica employee) to several TransAmerica and TCS employees, in
which he writes that he “was hoping for an intuitive approach to communicate to the BaNCS
team.” Pl.’s App., Doc. 9-2 at 17. The e-mail is a response to another e-mail in the thread in which
a TCS employee copies Vantage source code relating to rate of return calculations. Id. at 18. CSC
alleges that this e-mail shows that Defendants are disclosing Vantage source code to the BaNCS
team for the development of the competing software program. CSC does not, however, set forth
evidence that the contents of the e-mails were actually shared with BaNCS developers—who
Defendants contend are located in India and who were not privy to the e-mail correspondence—
and CSC does not set forth evidence that the Vantage source code has been copied for use in that
software’s development. See Def.’s Resp., Doc. 22 at 6.
In addition to the March 25, 2019 e-mail allegedly showing an intent to disclose the source
code to the BaNCS team, CSC alleges that one individual on the e-mail chain, Yogitha Kiran
(“Kiran”), who initiated the e-mail inquiry about how to perform rate of return calculations, is a
TCS software developer “who is believed to be” working on the development of BaNCS. Pl.’s
Doc. 7 at 12. CSC’s allegation as to this individual’s involvement with BaNCS is purely
speculative, however, as evidenced by CSC’s own acknowledgment that Barnwal merely
“believes” this individual is working on BaNCS. Pl.’s Appl., Doc. 7 at 12 (“[A] TCS software
developer, who is believed to be working on the development of TCS’ U.S. BaNCS, sent an email
Memorandum Opinion and Order – Page 7
inquiring about a rate of return[.]”). In its response, TCS states that Kiran “is not a software
developer and she has no role in programming or developing any aspect of TCS’s BaNCS Platform
(or Vantage, for that matter).” Defs.’ Resp., Doc. 22 at 11-12. The court does not believe that
CSC’s reliance on Kiran’s inclusion in the e-mail correspondence is sufficient evidence that
BaNCS developers were actively seeking and obtaining Vantage source code for the purpose of
copying it to develop the BaNCS software.
In response to CSC’s contention that the e-mail thread is proof of misappropriation, TCS
argues that it was permitted to engage in this type of correspondence about Vantage code pursuant
to its obligations under the license agreement between MSI/Transamerica and CSC. TCS asserts
that CSC is aware that it maintains a “Vantage Team” that regularly works with Vantage source
code and manuals to carry out its obligations to Transamerica to maintain, update, and troubleshoot
the versions of the Vantage Platform licensed to Transamerica. Defs.’ Resp., Doc. 22 at 9. TCS
asserts that the e-mails arose because a Transamerica employee sent a routine request to certain
TCS “Vantage Team” members for information about how Transamerica calculates rate of return
calculations through the Vantage software for certain of its policies. Defs.’ Resp. Doc. 22 at 11.
TCS specifically explains:
The inquiry at issue originated because Transamerica employee
Charlie Plathe was reviewing an expected result excel spreadsheet
(“ER Sheet”) for [rate of return] and became concerned that the
calculation formulas as laid out in the ER Sheet might not accurately
account for one specific and unusual scenario. The subsequent
conversations between TCS’s TransAmerica Vantage Team and
Transamerica’s actuarial support team are an attempt by the two to
reconcile this issue. Addressing this inconsistency was clearly
within Transamerica’s right so that it could make sure that it is
consistently administering benefits according to its own policies no
matter what software platform it was using.
Defs.’ Resp., Doc. 22 at 12 (citing Plathe Decl. ¶¶ 9-16, Herring Decl. ¶ 10-17). TCS goes on to
explain that, “to address this request from Transamerica, the Transamerica Vantage Team initially
Memorandum Opinion and Order – Page 8
consulted a Vantage manual to provide a high-level description to Transamerica’s actuaries of how
ROR was being calculated by Transamerica with the assistance of the Vantage Platform.” Defs.’
Resp., Doc. 22 at 13.
CSC counters that, under the license agreement, TCS may not use its access to Vantage to
develop its competing BaNCS platform. CSC does not, however, adequately address TCS’s
argument that the context for the e-mails shows that its conduct was compliant with its
confidentiality and nondisclosure obligations under MSI/Transamerica’s license agreement. The
court is simply unable to ascertain, without more explanation about the scope of the license
agreement and TCS’s permitted use of Vantage in performing its service provider functions for
Transamerica, whether TCS was authorized to engage in the type of communications contained in
the e-mails at issue.
Furthermore, the e-mail upon which CSC heavily relies—seeking “an intuitive approach
to communicate to the BaNCS team”—was sent by an employee of Transamerica, who is not
named as a defendant in this case. In providing context for this e-mail, Defendants explain that
Transamerica employees inquired about how Vantage software performs certain functions so that
it could decide how to perform such functions in the BaNCS system once it transitions to that
platform, to ensure that Transamerica is calculating its policies in an accurate and consistent
manner regardless of the software system it employs. Defs.’ Resp., Doc. 22 at 14-15. Given the
state of the record, the court is unable to ascertain whether TCS’s actions in responding to
Transamerica’s inquiries were violative of the license agreements under which TCS was permitted
to access Vantage and advise Transamerica on how to utilize the software program to administer
its policies. Regardless of the veracity of Defendants’ allegations, as previously mentioned, the
court does not believe that the e-mails on their face are evidence of either actual or threatened
misappropriation to satisfy CSC’s burden to show substantial likelihood of the merits as to this
Memorandum Opinion and Order – Page 9
claim. While CSC may ultimately prevail on one of its claims, the record simply does not contain
sufficient evidence to entitle CSC to a temporary restraining order at this stage.
B. Unfair Competition and Tortious Interference with Plaintiff’s Prospective
Business Relationships
CSC has also failed to show that there is a substantial likelihood that it will succeed on the
merits of its unfair competition and tortious interference with its prospective business
relationships. CSC makes conclusory allegations that TCS has committed unfair competition and
tortious interference but offers no evidence in support. Accordingly, CSC has failed to make the
requisite showing that he is entitled to a temporary restraining order based on these claims.
IV.
Conclusion
For the reasons herein stated, Plaintiff has not met its burden of establishing the
requirements for a temporary restraining order. The court therefore denies Plaintiff’s Application
for Temporary Restraining Order (Doc. 7). The court directs the parties to submit a proposed
discovery and briefing schedule regarding the request for a preliminary injunction, and a suggested
hearing date on the preliminary injunction. This schedule must be submitted by May 13, 2019.
It is so ordered this 9th day of May, 2019.
_________________________________
Sam A. Lindsay
United States District Judge
Memorandum Opinion and Order – Page 10
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