Syntel v. TriZetto is a lawsuit in the United States District Court for the Southern District of New York, filed on 12 January 2015, that grew out of a services partnership between two companies that supported the same healthcare software. TriZetto, now owned by Cognizant, makes Facets, a platform used by health insurers for claim processing, adjudication and billing. Syntel sued over unpaid rebates; TriZetto counterclaimed that Syntel had used Facets software, tools and documentation to compete with it.[1] After a 2020 jury verdict, a 2023 Second Circuit decision and a 2025 retrial on compensatory damages, the court entered an amended judgment for TriZetto on 29 April 2026.[2]
Background
TriZetto licenses Facets to health insurers and also sells customisation and implementation services. It lets customers choose their own service provider, and the Second Circuit noted that a third-party provider could either use TriZetto’s guides and manuals through the customer or sign a “third-party access agreement” with TriZetto, and that providers could use those materials for free.[1]
In 2010 TriZetto and Syntel signed a Master Services Agreement under which Syntel, for a guaranteed annual payment, supported Facets customers on TriZetto’s behalf. A 2012 amendment, in exchange for a lower payment commitment from TriZetto, deleted the provisions that barred Syntel from competing for Facets services contracts.[1]
The dispute
The relationship soured in 2014, when Cognizant, a competitor of Syntel, acquired TriZetto. Syntel terminated the agreement and asked for rebates; TriZetto refused and raised concerns about Syntel’s continued use of its confidential materials. Syntel sued for breach of contract, misappropriation of confidential information and interference with contract. TriZetto counterclaimed for trade secret misappropriation under the Defend Trade Secrets Act and New York law, and for copyright infringement.[1]
During discovery Syntel destroyed documents and computers. A neutral forensic examination found that Syntel had been building a repository of TriZetto’s trade secrets for future work, and the court issued a preclusion order that led it to instruct the jury that Syntel had misappropriated two of the 104 claimed trade secrets, the test cases and automation scripts. Syntel did not appeal that order.[1] Syntel’s central argument at trial was that the amended agreement authorised it to compete for Facets work while using TriZetto’s confidential materials.[1]
Decision or outcome
- First jury, October 2020. The jury found for TriZetto on all counts, including copyright infringement, and awarded USD 284,855,192 in compensatory damages measured by avoided development costs, plus USD 569,710,384 in punitive damages.[1][2]
- Second Circuit, May 2023. The court affirmed liability. It held that the amended agreement was unambiguous: Syntel was free to compete with TriZetto but was still bound by the confidentiality provisions, and the deletion of the non-compete did not authorise use of the trade secrets to compete. It vacated the avoided-cost award because, on these facts, TriZetto had not lost the value of its secrets, the injunction had ended Syntel’s use of them, and Facets was worth more than when the misappropriation occurred. It remanded.[1]
- Remand. The district court vacated the remaining compensatory awards, granted TriZetto attorneys’ fees of USD 14,548,992.98 and ordered a new trial on compensatory damages.[2]
- Retrial, June 2025. The jury found damages of USD 69,977,813 under New York trade secret law, USD 59,700,000 under the Defend Trade Secrets Act and USD 65,261,913 for copyright infringement, and the total compensatory award was set at USD 69,977,813.[2]
- Amended judgment, April 2026. On 27 March 2026 the court awarded further fees of USD 12,395,484.50 and pre-judgment interest, and remitted punitive damages to USD 139,955,626. On 29 April 2026 it entered an amended judgment that also found TriZetto had not breached the agreement, and it recorded that the permanent injunction of 2021 remains in force.[2][3][4]
Whether either side appealed the 2026 judgment was not established from a primary record reviewed for this article.
Significance for software licensing and SAM practice
This is a trade secret and copyright dispute decided on New York and federal law, and the contract here is a services agreement, not a software licence. It is included because the question at its centre is a licensing one: what a party that is allowed to use a vendor’s software and documentation to perform contracted work may do with that access afterwards.
- Access for a purpose. Access given to perform services for the vendor was not permission to use the same materials for the subcontractor’s own customers.[1]
- Free third-party access. Because TriZetto let service providers use its materials for free through customers or access agreements, the court held that Syntel’s avoided costs could not be measured by TriZetto’s development spend.[1]
For a licence-scope dispute with a customer in the insurance sector see Fair Isaac v. Federal Insurance. For the wider picture see software licensing litigation.
Lessons learned
- Removing a non-compete does not authorise competitive use of confidential materials. The Second Circuit held that the confidentiality sections remained in force and called the opposite reading fanciful.[1]
- Access to perform services is not a licence for the subcontractor’s own use. The jury and the courts treated Syntel’s use for its own customers as unauthorised.[1]
- Damages follow the vendor’s actual loss and pricing. The USD 285 million avoided-cost award was vacated, and the retrial produced about USD 70 million in compensatory damages.[1][2]
- Discovery conduct matters. Syntel’s destruction of documents and computers led to a preclusion order that settled two of the trade secrets for the jury.[1]