Hexaware sued for $500 million in US over patent breach

American IT services firm Natsoft Corp. has sued Hexaware Technologies Ltd for breach of contract and patent infringement, seeking $500 million in damages from the latter, in one of the biggest patent cases against an Indian IT firm.

- Jas Bardia

The amount sought by Natsoft as damages is a little more than a third of Hexaware’s full-year revenue last year.

Privately held Natsoft filed the lawsuit against India’s tenth-largest IT company in an Illinois district court on 23 September, stating the latter used application modernization software whose work was covered by nine patents developed by Updraft, an IT services company that Natsoft acquired in 2024.

For Hexaware, a $500 million fine translates to almost four times its net profit of ₹1,174 crore ($132 million) for the last fiscal year. Hexaware, which follows a January-December financial calendar, ended last year with $1.43 billion in revenue, up 14% on a yearly basis.

In its complaint, Natsoft accused Hexaware of using its patents to sell and advertise its own software products for software modernization purposes and Gen Al applications. Application modernization is the practice of updating older software for newer computing approaches, including newer languages, frameworks, and infrastructure platforms.

“A March 2024 public report on Hexaware’s application modernization services recognized “Updraft” as a “partner” providing tools relating to Hexaware's application modernization services," read Natsoft's complaint.

Natsoft has charged Hexaware on 13 counts, including breach of contract and patent infringement.

Apart from seeking damages, it also requested the court to disallow Hexaware from using and marketing any of the patents currently under investigation.