Pegasystems to pay Appian additional
$23.6 million in legal fees for
willful and malicious misappropriation of trade secrets
MCLEAN,
Va., Sept. 16, 2022 /PRNewswire/ -- Appian
(NASDAQ: APPN) announced today that the Circuit Court for
Fairfax County, Virginia entered a
final judgment awarding it $2.036
billion in damages from Pegasystems Inc. (NASDAQ: PEGA) for
trade secret misappropriation. The Court also entered final
judgment on the jury's verdict that Pegasystems violated the
Virginia Computer Crimes Act. Appian had brought the case to trial
in March 2022 to ensure the
protection of its proprietary intellectual property, including its
trade secrets, and received the jury's verdict after a 7 week trial
on May 9, 2022. As a result of
the jury's finding of willful and malicious appropriation of
Appian's trade secrets, the Court also ordered Pegasystems to pay
Appian $23.6 million in attorney's
fees associated with the case. Finally, the Court ordered
Pegasystems to pay Appian statutory post-judgment interest on the
judgment at an annual rate of 6%, or approximately $122 million per year.
![Appian helps organizations build apps and workflows rapidly, with a low-code automation platform. Combining people, technologies, and data in a single workflow, Appian can help companies maximize their resources and improve business results. Many of the world’s largest organizations use Appian applications to improve customer experience, achieve operational excellence, and simplify global risk management and compliance. To learn more, visit www.appian.com. (PRNewsfoto/Appian) Appian helps organizations build apps and workflows rapidly, with a low-code automation platform. Combining people, technologies, and data in a single workflow, Appian can help companies maximize their resources and improve business results. Many of the world’s largest organizations use Appian applications to improve customer experience, achieve operational excellence, and simplify global risk management and compliance. To learn more, visit www.appian.com. (PRNewsfoto/Appian)](https://mma.prnewswire.com/media/1488235/Appian_Logo.jpg)
Final judgement awards Appian $2.036 billion in damages from Pegasystems Inc.
for trade secret misappropriation.
"We are pleased that the Court rejected Pegasystems' efforts to
throw out the jury's verdict," stated Christopher Winters, General Counsel at Appian.
"We think that the jury's verdict was sound, and the Court's
rulings at trial were well founded. Appian only asked for damages
representing Pegasystems' unjust enrichment at Appian's expense,
which was supported by expert witness testimony including from a
retired Gartner analyst. We did not seek or receive punitive
damages. We will now move to the appellate phase of the litigation,
where we are confident that we will prevail as well."
During the seven-week trial, Appian presented evidence that
Pegasystems hired an employee of a government contractor (the
"Contractor"), to provide Pegasystems with access to Appian's
software as a part of an effort to learn how to better compete
against Appian. In hiring the Contractor, Pegasystems instructed
its third-party contracting service to recruit someone who was not
"loyal" to Appian. Appian put forward evidence that the Contractor
passed trade secret information to Pegasystems to enable its
employees to build competitive features and train Pegasystems'
sales team to better compete against Appian. During the
proceedings, Alan Trefler,
Pegasystems' Founder and CEO, admitted that it was "inappropriate''
for Pegasystems employees to have hired the Contractor, and that
the Contractor "apparently did things for which he was not
entitled."
The Contractor, referred to as a "spy" internally at
Pegasystems, helped Pegasystems generate dozens of video recordings
of the Appian development environment for use by Pegasystems in
compiling competitive materials and evaluating improvements to its
platform. Appian also submitted that Pegasystems' product
development team reviewed the materials provided by the Contractor
and changed the course of Pegasystems' product engineering to take
advantage of the Appian technology they saw. Specifically, Appian
put forward documents and testimony that Pegasystems made use of
the trade secrets gleaned from the Contractor to make improvements
with respect to, among other things, ease of use, and social and
mobile capabilities in the Pegasystems platform.
Appian believes that the damages award is the largest award in
Virginia state court history.
Pega has filed a notice of appeal. Pegasystems is not required
to pay Appian the judgment, attorney's fees, or post-judgment
interest until all appeals are exhausted. Appian cannot predict the
outcome of any appeals or the time it will take to resolve
them.
About Appian
Appian is the unified platform for
change. We accelerate customers' businesses by discovering,
designing, and automating their most important processes. The
Appian Low-Code Platform combines the key capabilities needed to
get work done faster, Process Mining + Workflow + Automation, in a
unified low-code platform. Appian is open, enterprise-grade and
trusted by industry leaders. For more information, visit
www.appian.com.
Forward-Looking Statements
This press release
includes forward-looking statements. All statements contained in
this press release other than statements of historical facts,
including statements regarding Appian's ability to collect on the
judgment and to receive attorney's fees, the outcome of any appeal,
and the timing of such matters, are forward-looking statements. The
words "anticipate," "believe," "continue," "estimate," "expect,"
"intend," "may," "will," and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are subject to a number of risks and uncertainties,
including the risks and uncertainties set forth in the "Risk
Factors" section of Appian's Annual Report on Form 10-K for the
year ended December 31, 2021 filed
with the Securities and Exchange Commission on February 17, 2022 and other reports that Appian
has filed with the Securities and Exchange Commission. Appian
is under no duty to update any of these forward-looking statements
after the date of this press release to conform these statements to
actual results or revised expectations, except as required by
law.
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SOURCE Appian