Last May, a court in Virginia, in the United States, ruled that Pegasystems had to compensate Appian with more than 2,000 million dollars by misappropriate trade secrets. The sentence, which is now final although it was issued in May, establishes that the compensation that Pegasystems will have to pay to compensate it will be 2,036 million dollars. Furthermore, as a result of the evidence uncovered by the jury of misappropriation of secrets, Pegasystems tYou will have to pay another 23.6 million in costsas well as post-judgment statutory interest at a rate of 6% per year: about $122 million per year per year.
Appian took Pegasystems to court last March, presenting evidence that Appian had hired an employee of a government vendor to give Pegasystems access to Appian’s software, as part of a move to enhance its competition with Appian. To hire that employee, Pegasystems instructed its external recruiting service to hire someone who was not “loyal” to Appian.
Appian provided evidence that this employee passed trade secret information to Pegasystems to enable its employees to perform competitive functions, and also to train Pegasystems’ sales team to better compete with Appian. During the trial, which lasted seven weeks, Alan Trefler, Founder and CEO of Pegasystemsadmitted that it was not appropriate to have hired such worker as an employee from the government provider, and that the provider apparently did things it was not authorized to do.
This employee, referred to internally at Pegasystems as “the spy,” helped the company generate dozens of video recordings of the Appian development environment for Pegasystems to use and collect competitive materials. Also to evaluate improvements for your platform. Appian also noted that the Pegasystems product development team reviewed the materials passed to them by the employee, and changed what was established in terms of product engineering to take advantage of the Appian technology they had access to.
Specific, provided documents and testimony that Pegasystem used the trade secrets obtained by the employee to make improvements, among other things, in ease of use and mobile capabilities in the Pegasystems platform.
Regarding the award, Appian believes it is the largest in the history of the Virginia state courts. However, the ruling is appealable, and Pegasystems has already issued a notice of appeal. The company is not required to pay damages, attorneys’ fees or post-trial interest until the appeals are exhausted, and at this time Appian doesn’t know how long it will take to resolve them.
Yes, according to Christopher Winters, Appian General Counselthey are delighted «that the court reject efforts to overturn the jury’s verdict. We believe the jury’s verdict was sound, and the court’s decisions at trial were soundly based. Appian only sought damages for Pegasystems’ unjust enrichment at Appian’s expense, which was supported by expert witness testimony that included a retired Gartner analyst. We do not seek or receive punitive damages. Now we will move on to the appeal phase of the verdict, from which we trust that we will also emerge victorious.«.