Updated 16:58 May 10 with comment from Pega, court document.
Low code firm Appian has been awarded $2 billion in damages from rival Pegasystems after a jury found the latter’s “misappropriation of Appian’s trade secrets” to be willful and malicious – following a seven-week trial.
The court heard that Pegasystems hired a contractor using Appian software to make video recordings of the Appian development environment so that Pegaystems could compile “competitive materials.”
The allegations date back to activity taking place between 2012 and 2014.
Lawyers for Appian contended that senior Pegasystems executives cooked up fake identies to gain access to trial versions of Appian software in order to create competitive intelligence briefs, in breach of Appian's Terms of Use and License Agreements, as they fought to maintain contracts with key customers like Bank of America.
"[Appian] Terms and Conditions, they are chockablock with protections. There is permitted usage only for the business purposes, only the identified individuals with the user accounts can have access, only people with a need to know who are subject to binding agreements", the company's lawyers told the court in closing arguments, pointing to evidence that top Pegasystems executives including its CEO gained access to Appian software in breach of those terms, with staff at Pega saying they would use the intelligence to "shape RFPs".
Trial closing arguments on day 26.Download
See also: Google beats Oracle in API “fair use”copyright clash
Appian’s CEO, Matthew Calkins, said: “Appian will never hesitate to defend itself and its intellectual property from competitors where it believes they have acted illegally. I am proud of our legal team for their outstanding work on this case. It was a masterful performance and the jury’s verdict is the result of their efforts.”
The case was heard by a jury in the Circuit Court for Fairfax County, Virginia.
The jury awarded Appian $2.036 billion in damages for trade secret misappropriation and further found that Pegasystems violated the Virginia Computer Crimes Act. Appian shares were up 25.1% at $53.83 in subsequent morning trading, while Pegasystems tumbled 20.6% to $52.38 as we published.
Lisa Pintchman, VP, Corporate Comms at Pega told The Stack: "We strongly disagree with the claims and the verdict, and believe the verdict is not supported by the facts of the case or the law and is the result of significant error. We plan to vigorously pursue our post-trial remedies and will certainly appeal what we believe is an unjust result. We believe we have meritorious defenses that have strong grounds to overturn this, although the appeals process could potentially take years to complete", adding by email that "this verdict has no impact on our products or what we are able to sell and service. In the meantime, we will continue to focus on helping our clients address their most pressing digital transformation challenges so they're ready for what's next."
