American tech company Natsort and its subsidiary Upcraft file a lawsuit in the US against Mumbai-based Hexaware Technologies, alleging patent infringement and misuse of confidential technology.

Bengaluru : October 3, 2025

In a significant legal development in the global tech industry, American technology firm Natsort and its subsidiary Upcraft have filed a lawsuit in the United States against Mumbai-based Hexaware Technologies, seeking damages of $500 million. The case, which revolves around allegations of patent breach, intellectual property misuse, and technology misappropriation, highlights growing tensions in the outsourcing and IT modernization sector.

According to court filings reviewed by the Times of India, the plaintiffs accuse Hexaware of incorporating patented technologies from Natsort into its flagship modernization platforms without authorization. The dispute is expected to have wide implications for cross-border intellectual property (IP) enforcement and could shape future corporate partnerships in the IT sector.

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Allegations Against Hexaware

The plaintiffs allege that Hexaware’s modernization platforms — RapidX, Amaze, and Tensai/ATOP — illegally incorporated Natsort’s patented technologies. These patents allegedly cover:

• Automated code testing
• Business-rule extraction
• Code generation
• Legacy modernization frameworks

The complaint further claims that Hexaware misused confidential information and proprietary technology shared during their earlier business partnership to build competing solutions without authorization.

Natsort has accused Hexaware of wrongfully benefiting from its patented technology without paying licensing fees, stating that it invested $50 million into developing the innovations in question.

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Hexaware’s Response

Hexaware Technologies has strongly denied the allegations, calling the lawsuit “without merit” and suggesting it is unlikely to result in actionable damages. The company stated that its modernization platforms were independently developed and are based on proprietary research and engineering.

Industry observers note that Hexaware, one of India’s leading IT services and consulting firms, has been aggressively expanding its digital modernization and cloud transformation services, competing directly with global players. This legal battle could therefore have both financial and reputational consequences for the company.

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The Broader Issue: Patent Breach in IT Services

Patent infringement disputes in the IT services industry are becoming increasingly common, particularly as companies race to develop tools for cloud migration, automation, and digital modernization.

• Cross-border disputes: Lawsuits filed in US courts often target Indian IT firms due to their expanding presence in global markets.
• Confidentiality risks: Partnerships and outsourcing agreements frequently involve the sharing of sensitive technology, raising the risk of misuse allegations.
• High stakes: With billions invested in R&D, patent breaches can result in claims running into hundreds of millions of dollars, as seen in the Hexaware case.

Legal experts suggest this lawsuit could set a precedent for intellectual property enforcement in cross-border outsourcing arrangements.

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Impact on Hexaware Technologies

If the lawsuit succeeds, Hexaware could face:

1. Financial damages of up to $500 million.
2. Injunctions preventing it from using the disputed technologies.
3. Reputational risk, especially among global clients in the US and Europe.

However, analysts caution that such cases are complex and often take years to resolve. Settlements are also common, especially when business continuity and client trust are at stake.

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Natsort’s Position

Natsort and its subsidiary Upcraft claim they built the patented technologies at great expense and accuse Hexaware of using them to unfairly compete. The plaintiffs emphasize that Hexaware gained unlawful advantage by avoiding licensing fees and leveraging confidential know-how to strengthen its modernization offerings.

The company insists its lawsuit is not only about compensation but also about protecting innovation and intellectual property rights in a highly competitive industry.

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Global Context: IP Protection and Outsourcing

This case comes amid growing scrutiny of intellectual property protection in outsourcing partnerships. US and European companies often outsource IT development to Indian firms, creating vast opportunities but also raising risks of IP leakage.

• In recent years, similar disputes have involved other large IT firms, underscoring the challenges of safeguarding innovation.
• With increasing focus on AI-driven modernization platforms, competition for patents has intensified, making legal battles almost inevitable.

Experts argue that companies must adopt stricter contractual safeguards, clear licensing agreements, and robust IP protection mechanisms to avoid such disputes.

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What It Means for the IT Industry

The Hexaware lawsuit underscores several key points for the IT industry:

• Innovation vs. litigation: As firms race to modernize legacy systems, IP battles will become more frequent.
• Cross-border complexity: Global partnerships require careful legal planning across multiple jurisdictions.
• Regulatory scrutiny: Cases like these may lead to tighter regulations governing outsourcing and technology sharing.

For India’s IT services sector, which is valued at over $250 billion, such disputes highlight the need for stronger compliance, R&D transparency, and IP protection protocols.

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Possible Outcomes

The lawsuit could proceed in multiple ways:

1. Settlement: Hexaware and Natsort may reach an out-of-court settlement involving licensing fees or partnership restructuring.
2. Trial: If it goes to trial, the outcome will depend on the strength of patent claims and evidence of misuse.
3. Reputation Management: Regardless of outcome, Hexaware must manage client confidence, as multinational clients may hesitate in the face of legal uncertainty.

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