Infosys files countersuit against Cognizant for anti-competitive practices

IT giant Infosys has filed a countersuit against Cognizant in federal court in Texas, alleging anti-competitive practices and targeted poaching of its key executives, Reuters news agency reported.

The Bengaluru-based company accused its US-based rival of contractually restricting clients from providing IT services to competitors and withholding software training, which Infosys said hampered its ability to compete.

The demand comes later Cognizant subsidiary TriZetto sued Infosys in August last year, accusing the Indian IT giant of misappropriating trade secrets related to its health insurance software.

TriZetto’s Facets and QNXT platforms, widely used by healthcare insurers to automate administrative tasks, were central to the initial legal dispute.

WHY HAS INFOSYS FILED A COUNTERSUIT?

In its countersuit, Infosys accused Cognizant of deliberately recruiting its top executives, including S Ravi Kumar, who was appointed CEO of Cognizant in 2023. Infosys claims this slowed down the development of its competing software, Infosys Helix.

The countersuit seeks three times the damages suffered, along with attorneys’ fees, although the total amount has not been disclosed.

In response to the allegations, Cognizant said it would take firm action and maintained that Infosys had misused its intellectual property.

“Cognizant encourages competition, but competitors cannot use Cognizant’s intellectual property to compete unfairly, as Infosys has done,” the company said in a statement. Infosys declined to comment when approached by news agency Reuters.

The dispute escalated with TriZetto’s claim that Infosys had repackaged its proprietary data into an Infosys product under the guise of “Test Cases for Facets.” Infosys responded by arguing that Cognizant’s anti-competitive actions, including restrictive contractual clauses, were preventing fair competition in the IT services sector.

The case, filed in the United States District Court for the Northern District of Texas, has attracted attention due to its potential implications for the competitive landscape of the global IT industry. With both companies accusing each other of misconduct, the legal battle is expected to intensify as it unfolds.

With contributions from Reuters