Court awards $23m attorney fees in Appian win
Landmark trade secrets case results in huge damages award | Jury agreed that Pegasystems was “unjustly enriched” by $479 million | Patterson Belknap Webb & Tyler.
A Virginia state court has entered a final judgment ordering Pegasystems to pay Appian $2 billion dollars in damages for misappropriating trade secrets, along with $23m in attorney fees.
Muhammad Faridi, partner at Patterson Belknap Webb & Tyler, who represented Appian told WIPR during an interview in May that the verdict was highly significant and a landmark in trade secrets litigation.
“The sheer dollar amount that the jury awarded to Appian is the largest to be handed down by the Virginia state or federal jury to our knowledge, and it's also one of the most significant trade secret verdicts recorded in the US,” he said.
In its final judgment handed down on September 15 and made publicly available this week, the court also ordered Pegasystems to pay post-judgment interest on those damages at an annual rate of 6%.
By doing so, the judge rejected Pegasystems’ motion to overturn the May 9, 2022, jury verdict finding that Pegasystems misappropriated Appian’s trade secrets and also finding Pegasystems had violated the Virginia Computer Crimes Act.
A spy in our midst
As the jury found that Pegasystems willfully and maliciously misappropriated Appian’s trade secrets, the court also ordered Pegasystems to pay Appian $23.6 million dollars in attorneys’ fees—the full amount that Appian requested.
Appian sued Pegasystems in 2020, claiming that its rival had instructed a third-party contracting service to recruit someone who was not “loyal” to Appian.
The tech company then provided further evidence that the contractor, who was allegedly referred to as a “spy” internally at Pegasystems, took secret video recordings of the Appian development environment for use by Pegasystems when producing competitive materials and evaluating improvements to its platform.
According to Appian, this corporate espionage had cost them 201 customers over eight years, which led to software company Pegasystems being “unjustly enriched” by $479 million as a result.
‘Unjust enrichment’
“This conduct spanned over eight years beginning in February of 2012 and lasting until 2021. And my view is that the jury certainly took that into account when evaluating liability as well as damages,” explained Faridi.
“The jury was resoundingly convinced of the significant liability that Pegasystems had, and of the damage that Appian incurred as a result of this ‘unjust enrichment’.”
During the trial, Pegasystems had countered that the information at issue could not be categorised as ‘trade secrets’ because some of it was sourced from publicly available materials, a stance rejected by the jury.
The plaintiffs were represented by Adeel Mangi, Muhammad Faridi, and Jeffrey Ginsberg of Patterson Belknap Webb & Tyler, with local counsel provided by Virginia firm, Holmes Costin & Marcus.
Pegasystems was represented by Robert Frank, Anita Spieth, John Calhoun, Bryana McGillycuddy, Marina Pullerits, Adam Bookbinder, John Calhoun and Jennie Wilusz of Choate Hall & Stewart, Douglas Kay of Offit Kurman Attorneys At Law and Monica Monday of Gentry Locke.
WIPR launches ranking of top trade secrets firms
This landmark development in trade secrets litigation comes as WIPR Insights launches an industry-first ranking of top trade secrets firms.
Commenting on the launch, Baron Armah-Kwantreng, rankings editor, said: “Global brands and their IP practitioners are increasingly aware of the risks posed by their most valuable know-how, or 'secret sauce', exiting the building on a data stick with former employees.
"The WIPR Insights Global Trade Secrets rankings supplement will spotlight the global firms who can help clients navigate these risks.”
Would you like to be considered for inclusion in our Global Trade Secrets rankings?
For further information on the Global Trade Secrets special edition please contact: barmah-kwantreng@newtonmedia.co.uk
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