Appian awarded over $2b after claiming Pegasystems stole its data

Appian has been awarded more than $2 billion in damages from Pegasystems for "trade secret misappropriation." It's an eyewatering sum, and came in a verdict received from a jury in the Circuit Court for Fairfax County, Virginia following a seven-week trial. Appian is all about building apps and workflows rapidly with its low- …

[Gordon 10]

Odd

Seems a very odd ruling to me. If the only "trade secrets are a bit of look and feel and some UX functionality copied from videos then 2Bn seems a bit steep. Especially when all these Workflow/load code tools tend to converge on the same paradigms and concepts.

Without knowing more this seems to be a typical "US Court system doesn't understand Tech" result.

[david 12]

Re: Odd

It was a jury trial, with damages set by the jury.

Civil jury trials always can have odd results, and damages are always large, compared to judge-only trials, in any jurisdiction, not just Virginia, not just the USA.

It is one of the reasons so many large American companies are registered in Delaware (more companies than residents). Delaware doesn't have civil jury trials.

[amanfromMars 1]

Re: Odd and Right Dodgy ..... an Achilles Heeled Trojan Crack House in the Hood

It is one of the reasons so many large American companies are registered in Delaware (more companies than residents). Delaware doesn't have civil jury trials. ...... david 12

Does that result in Delaware becoming, or is that Delaware creating a wannabe renegade rogue and private pirate safe haven for the possibly corrupt and decidedly so ‽ .

[katrinab]

Re: Odd and Right Dodgy ..... an Achilles Heeled Trojan Crack House in the Hood

Delaware may well be such a haven, but not for this reason.

It probably has more to do with the rate of tax they levy on corporate income, which as far as I'm aware, is 0%. Obviously you still have federal taxes to pay.

[Auntie Dix]

Re: Odd

"Delaware doesn't have civil jury trials."

That statement is incorrect, unless you are opining that the participants are ill mannered.

In many States, criminal and civil cases are tried by jury in a single court system. In Delaware, the court system is divided into two distinct parts: a court of law and a court of equity.

Criminal and most civil statutory and contractual matters are heard in the court of law, which has a jury system and a presiding judge.

Matters of fiduciary duty and corporate governance are heard in the court of equity, which in Delaware is called The Court of Chancery. The latter has no jury—only a judge.

[Gordon 10]

Re: Odd

Which to be fair to Delaware - is pretty much how the English court system works too afaik. Probably where they got the idea from.

[Brewster's Angle Grinder]

Re: Odd

Apparently we can use juries in civil cases for defamation, false imprisonment, malicious prosecution, and (civil) fraud.

[Anonymous Coward]

Re: Odd

It is large - I wonder if the time since it occurred is a factor - that the award is looking at how much Pega benefited over 8 years. Although that is still 250M a year, which still seems steep.

[Ace2]

Re: Odd

Except, the jury sat and listened to the details for seven weeks. IMO it’s unwise for someone who wasn’t there to second guess that based on a one-paragraph summary in a news article that was also written by a reporter who wasn’t there.

[rmmarshall]

Re: Odd

This case was very explicitly not about "look and feel" but underlying architecture and design.

Your absolutely correct point on "load code (sic) tools tend to converge on the same paradigms and concepts" is key here as Pega was strikingly different at the time and needed to align more with the changing market to remain competitive and did so at least in part by misappropriating ideas from Appian.

You are also correct in saying that the US courts and legal systems don't understand tech, but part of my role was to explain to the lawyers, judge and jurors what was going on. This was not easy as the concepts were much deeper than reported.

[Brewster's Angle Grinder]

Have they really said that using a competitor's product is "theft of trade secrets"....?

[Anonymous Coward]

No, they have said that paying a government contractor who has inside access to a competitors training and build environments, and non-public roadmap details (presumably someone performing security audit of the software for a government client) to film non-public details of the product is "theft of trade secrets".

[Brewster's Angle Grinder]

But the public statement goes on to say:

Appian presented undisputed evidence that Pegasystems employees used false identities to obtain access to Appian information and trial versions of Appian’s software, which were then used for competitive purposes.

That's legitimate research in my book.

[rmmarshall]

It's actually against the law in some places, including Virginia under the Computer and Network Misuse act or similar (I'm not a lawyer). In this case it was also against Pega's published Code of Conduct. It is also considered unethical by SCIP, the global competitive intelligence association.

It may be legitimate in your book, but it is putting you and your employer at risk.

[rmmarshall]

This was about a culture of systematic misappropriation of fundamental architectural concepts

I was the technical Expert Witness on this case and it was NOT about look and feel, but very much about architecture and design concepts being straight copied to transform an old platform to meet the needs of a new generation. There was a great deal more to the case than has been reported. The damages are high because they cover a period of revenue from 2013 until 2020 which was assessed on the misappropriated trade secrets.

The jury were very concientious indeed and the total of damages was due to their calculations.

[Robert Grant]

Re: This was about a culture of systematic misappropriation of fundamental architectural concepts

Wow, El Reg should interview you!

I'd be curious to know what the trade secrets could be in terms of architecture even.

[juliansh]

Re: This was about a culture of systematic misappropriation of fundamental architectural concepts

If we were told them then wouldn't be trade secrets anymore...

[rmmarshall]

Re: This was about a culture of systematic misappropriation of fundamental architectural concepts

I'm not sure how much I can divulge, but there was a LOT of stuff, some of it down in the guts of the backend architecture and signicant content in the way the developer experience operatored (not look and feel, but the architecture behind ensuring fluidity, speed, etc). This wasn't about one or two items. The consultant was rummaging around in the server and database layers of running US Government sysytems with Pega staff watching...

[Huurkyg]

Re: This was about a culture of systematic misappropriation of fundamental architectural concepts

I'm not so sure. In the timeframe this alleged theft took place, the software industry in general was not undergoing major architectural shifts (cloud computing was not yet fully upon us). At that point in time we still had lots of high volume apps that were on-prem, JVM based systems. There is only so much one could do under circa 2012 Java architecture.

Furthermore, the prevailing architectures of the time were broadly known through design patterns of scalable systems. It seems unlikely that $2B could have been stolen.

BTW, do you think the trial being in Fairfax County, home of Appian, had any bearing on the outcome?