Indian IT Giant Hexaware Faces $500M Lawsuit Over Patent Infringement
Indian IT giant Hexaware Technologies Inc. faces a significant legal challenge. U.S.-based tech companies Natsoft Corporation and Updraft LLC have filed a $500 million lawsuit against the firm, alleging patent infringement and contract breaches. This is the first time an Indian IT company has faced such a substantial lawsuit in the U.S.
The lawsuit, filed in the Illinois District Court, contains nine counts of copyright infringement and 13 claims in total. It alleges that Hexaware has infringed multiple patents and breached contracts. Hexaware, however, maintains that the complaint is without merit and does not anticipate an adverse outcome or significant financial impact.
The lawsuit comes amidst a broader context of the U.S. government introducing a substantial $100,000 fee on H-1B visa petitions. Despite the lawsuit, Hexaware's stock prices have only declined by 1% on the BSE, indicating a relatively muted market reaction.
In its FY24 report, Hexaware reported a profit of ₹1,174 crore ($132 million), and in its latest quarterly result, it reported $44 million. The damages claim, at $500 million, represents about a third of Hexaware's annual revenue. Greyhound Research suggests that the reputational impact of the lawsuit may be more significant than the immediate financial cost.
Hexaware Technologies Inc. is facing a $500 million lawsuit, the first of its kind against an Indian IT company in the U.S. While the company maintains its innocence and expects no material financial impact, industry analysts warn about potential reputational damage. The outcome of this lawsuit will be closely watched by the IT industry and investors alike.
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