A US court awarded Appian with more than $2 billion in damages from Pegasystems. According to Appian, Pegasystems employed one of its contractors to steal trade secrets.
Both Appian and Pegasystems develop low-code platforms. The organizations compete in terms of patents, customers and personnel. Between 2012 and 2014, Pegasystems went too far. The organization hired one of Appian’s contractors. Recently, a US court ruled that the contractor was exploited to steal Appian’s trade secrets. A highly illegal move, resulting in damage claims of more than $2 billion.
US court cases are decided by a jury of citizens. In the past seven weeks, the jurors of a Virginia court concluded that Pegasystems is guilty of ‘trade secret misappropriation‘ and a violation of the ‘Virginia Computer Crimes Act’. Pegasystems is required to pay more than $2 billion to Appian.
The case
In 2012, Pegasystems contacted Youyong Zou, a developer working on an Appian government contract. The contractor had access to Appian’s internal development systems. According to Appian, the contractor made dozens of video recordings of Appian’s development systems. The organization claims that the video recordings were supplied to Pegasystems. Pegasystems allegedly used the recordings to polish its own products and inform sales staff of the competitor’s progress. According to Appian, Pegasystems codenamed the project ‘Project Crush’.
Over the past seven weeks, a US jury came to agree with Appian’s allegations. “We’re grateful for that”, said Christopher Winters, General Counsel at Appian. The $2 billion dollar award is the highest amount ever awarded by a Virginia court.
Pegasystems will not resign itself to the verdict. “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”, responded Pega’s VP of Corporate Communications, Lisa Pintchman. “We plan to vigorously pursue our post-trial remedies and will certainly appeal what we believe is an unjust result.” The appeals process can take years to complete.
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