Infosys-Cognizant trade-secrets battle nears end as Dallas court passes order

In an order dated 23 May, United States magistrate judge David L Horan said, “In appropriate circumstances as described below, the court welcomes the parties’ scheduling a telephone conference with the court before a non-dispositive pretrial discovery motion is filed.”

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The judge clarified, “This is not an invitation to engage in ex parte communications or obtain advisory rulings from the court. Rather, the parties are required to attempt to resolve by agreement any disputes on non-dispositive pretrial discovery matters by meaningfully conferring before seeking the court’s involvement.

“But, if that fails to resolve the dispute, the parties are encouraged, where appropriate, to seek an informal telephone conference with the court to attempt to resolve simple and straightforward disputes in an efficient and cost-effective manner.”

No need to specify trade secrets, court says

In a separate disclosure on 23 May, the court asked Cognizant to provide details of people with knowledge of Infosys’s healthcare software product and the names of individuals it believes stole its proprietary software by 13 June. It also directed the IT services company to identify all measures it has taken to protect the confidentiality of the information it considers to be trade secrets by the same day.

Still, the court ruled that Cognizant was not expected to further specify the trade secrets it alleged were misappropriated beyond what it had already stated, dismissing Infosys’s motion to compel Cognizant to clearly identify the allegedly stolen trade secrets, which the court termed ‘interrogatory no. 1.’

“The court denies Infosys’s motion to compel Cognizant to serve a supplemental answer to Interrogatory No. 1 at this time,” read the order.

Cognizant said in response to Mint’s queries on Tuesday, “The court made clear that Infosys cannot shield itself behind a self-imposed protective order to avoid disclosing information it is contractually and legally obligated to provide. We have been surprised by Infosys’s refusal to produce this information—particularly given our clear entitlement to it under the parties’ agreement and through standard discovery rules. The only reasonable explanation for Infosys’s continued concealment is that the withheld documents will reveal the true scope and impact of Infosys’ misconduct.”

How the tussle began 

The legal battle began when Cognizant accused Infosys of stealing trade secrets pertaining to its healthcare software last August. Infosys denied the allegations and responded with its own counterclaims, suggesting Cognizant had not properly identified the trade secrets it alleged were stolen.

Infosys upped the ante after it publicly named Cognizant chief executive S Ravi Kumar in a court filing, accusing Cognizant of hiring him to slow down the development and rollout of a competing software. Kumar, an Infosys veteran, left the company in October 2022 and joined Cognizant as CEO in January 2023.

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In a 10 March filing, Cognizant called Infosys’s claims ‘preposterous’ and ‘absurd’, adding that Kumar and two other people named by Infosys were hired on the basis of their skills. 

Cognizant, which follows a January-December financial calendar, ended 2025 with $19.74 billion in revenue, while Infosys, which follows an April-March financial calendar, ended FY25 with $19.28 billion in revenue. 

Heathcare sector matters more to Cognizant

However, Cognizant has a bigger share of the healthcare sector. The Nasdaq-listed company gets almost a third of its revenue, about $5.9 billion, from clients in the health sciences sector, while Infosys gets 7.3% of its revenue, about $1.4 billion, from clients in this space.

Cognizant acquired healthcare software QNXT and Facets in 2014 by taking over TriZetto, which provides administrative solutions in healthcare. Health insurance companies in the US use these products to process claims.

Infosys made its own healthcare product, Helix, in 2022, as an alternative to QNXT and Facets. The two companies have since been servicing clients in the healthcare sector using their software products.

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The legal tussle comes amid a slowdown in India’s $283 billion IT services industry, and both companies have been grappling with their own set of issues. Cognizant has been unable to post growth after discounting its recent acquisitions. Kumar, 53, has been tasked with turning the company around. Infosys, on the other hand, has been finding it hard to bag large deals. The company missed its guidance and forecast its slowest growth in over a decade for FY26 amid economic uncertainties.