Appian's $2 billion verdict against Pegasystems overturned by appeals court (updated)

Pegasystems

30/07/2024 18:09

(Adds case information in paragraphs 5-11)
    By Blake Brittain
       July 30 (Reuters) - Software company Pegasystems
 PEGA.O  convinced a Virginia appeals court on Tuesday to throw
out a $2 billion jury verdict for rival Appian  APPN.O  in a
court battle over Pegasystems' alleged theft of Appian's trade
secrets.
    The award from 2022 had been the largest damages verdict in
Virginia court history, the Court of Appeals of Virginia said in
the decision.
    “We are extremely pleased by today’s decision throwing out
an award we believe was never rational," a Pegasystems
spokesperson said in a statement. 
    Spokespeople for Appian did not immediately respond to a
request for comment.
    McLean, Virginia-based Appian had said in a 2020 lawsuit
that Pegasystems hired a contractor to steal confidential
information from Appian's software platform in order to improve
its own products and better train its sales force.
    Appian said that Cambridge, Massachusetts-based Pegasystems
referred internally to the contractor as a spy and to its scheme
as "Project Crush," with Pegasystems employees using fake
credentials to access Appian's software.
        Pegasystems characterized "Project Crush" as competitive
research in a 2022 statement.
  
        A jury in Fairfax County, Virginia state court 
    determined in 2022
     that Pegasystems misappropriated Appian's trade secrets
with "willful and malicious" intent and ordered it to pay Appian
nearly $2.04 billion in damages. 
  
        Pegasystems' CEO said in a statement following the
verdict that Appian's CEO "could not identify one trade secret
that Pega had allegedly misappropriated" during the trial. 
  
        A Pegasystems attorney told the appeals court during a
hearing last year that the verdict was "the result of a series
of cascading errors that pose a threat to trade secret law and
to competition in Virginia," according to a court transcript.
  
        Judge Frank Friedman agreed on Tuesday that the trial
court had committed a "series of errors" related to jury
instructions and evidence that required a new trial.
  

 (Reporting by Blake Brittain in Washington; Editing by David
Bario and Marguerita Choy)
 ((blake.brittain@tr.com; +1 (202) 938-5713;))