In the United States Court of Appeals For the Second Circuit ______________

August Term 2022

(Argued: September 19, 2022 | Decided: May 25, 2023)

Docket No. 21-1370

SYNTEL STERLING BEST SHORES MAURITIUS LIMITED, SYNTEL, INC.,

Plaintiffs-Counter-Defendants-Appellants,

v.

THE TRIZETTO GROUP, INC., COGNIZANT TECHNOLOGY SOLUTIONS CORP.,

Defendants-Counter-Claimants-Appellees. †

______________ Before: RAGGI, WESLEY, and LOHIER, Circuit Judges.

Plaintiffs-Counter-Defendants-Appellants Syntel Sterling Best Shores Mauritius Limited and Syntel, Inc. (collectively, “Syntel”) appeal from a final judgment entered in favor of Defendants-Counter-Claimants-Appellees The TriZetto Group, Inc. and Cognizant Technology Solutions Corporation (collectively, “TriZetto”) after a jury trial in the United States District Court for

† The Clerk of the Court is directed to amend the official caption as set forth above. Southern District of New York (Schofield, J.). Relevant here, the district court ordered and entered judgment that (1) Syntel misappropriated 104 of TriZetto’s trade secrets in violation of the Defend Trade Secrets Act (“DTSA”) and New York law; and (2) TriZetto’s $284,855,192 compensatory damages award was proper under the DTSA.

On appeal, Syntel challenges the district court’s judgment with respect to liability and damages. Regarding liability, Syntel advances two related arguments. First, Syntel argues TriZetto failed to identify any trade secret with the requisite specificity at trial. Second, Syntel argues there was no misappropriation as a matter of law because TriZetto authorized Syntel’s use of the trade secrets. Both arguments fail. With respect to damages, Syntel argues upholding a compensatory damages award based on avoided development costs is impermissible under the DTSA in this case. Under these specific facts, we agree. Accordingly, we AFFIRM IN PART and VACATE IN PART the judgment of the district court and REMAND the case for further proceedings consistent with this opinion. _________________

KANNON K. SHANMUGAM, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC (Jaren Janghorbani, Nicholas P. Groombridge, Crystal L. Parker, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY; J. Steven Baughman, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Washington, DC, on the brief), for Plaintiffs-Counter-Defendants-Appellants.

JOHN C. O’QUINN, Kirkland & Ellis LLP, Washington, DC (Jason M. Wilcox, Hannah L. Bedard, Kirkland & Ellis LLP, Washington, DC; Michael W. De Vries, Kirkland & Ellis LLP, Los Angeles, CA; Adam R. Alper, Kirkland & Ellis LLP, San Francisco, CA; Leslie Schmidt, Kirkland & Ellis LLP, New York, NY, on the brief), for Defendants-Counter-Claimants-Appellees. _________________

2 WESLEY, Circuit Judge:

This is a tale of trade secrets. 1 The TriZetto Group, Inc. and Cognizant Technology Solutions Corporation (collectively, “TriZetto”) develop software used by healthcare insurance companies. One software product is Facets®, a platform which automates and manages common healthcare administrative tasks such as claim processing, claim adjudication, and billing. TriZetto licenses its Facets software to healthcare insurance companies to m