Trade Secrets Misappropriation Case of Cognizant TriZetto v. Infosys

Less than a year after Infosys sent a letter to and called out Cognizant for poaching its top executives, the latter’s subsidiary has sued the former, alleging misappropriation of trade secrets, breach of contract, and unfair competition.

Cognizant TriZetto Software Group Inc., a healthcare software provider, claims that Infosys had access to its confidential information, including trade secret information, through Non-Disclosures and Access Agreements (NDAAs) executed for the limited purpose of providing specific services to certain Infosys clients who were also TriZetto customers. Access was restricted to authorized recipients not involved in specifying, designing, developing, managing, marketing, testing, or selling Infosys commercial software products that directly compete with TriZetto’s proprietary software.

TriZetto’s proprietary software includes core administration solution software products, Facets, and QNXT. It is alleged that Infosys misappropriated TriZetto’s confidential information and trade secrets through its unauthorized interfaces and its test case repository. Infosys is accused of exceeding its authorized access to a) create connector tools (including the QNXT Adapter) for extracting data from TriZetto software (including QNXT), storing the extracted data in its systems in databases created using such information, and b) create a massive repository of test cases that includes test cases for Facets. In this regard, reliance has been placed on the Defend Trade Secrets Act, the Texas Uniform Trade Secret Act, and the Lanham Act.

TriZetto also alleges that Infosys breached the NDAs by using its access to TriZetto’s confidential information for purposes unrelated to the specified services. The narrow authorization is said to have been breached by Infosys by using TriZetto’s confidential information to create a repository of test cases, advertising those test cases thereafter, and granting unauthorized employees access to such information.

TriZetto has sought injunctive relief, restitution, damages, and other reliefs.

The above case bears a resemblance to the ongoing litigation between TriZetto and Syntel, which was previously found liable for trade secrets misappropriation. However, in this case, the DTSA damages award (of $285 million) was vacated by the US Court of Appeals for the Second Circuit last year and the $201 million compensatory damages awards (i.e., $142 million under the New York trade secrets claim and $59 million under the copyright claim) were vacated by the US District Court for the Southern District of New York in March of this year.