Cambridge software firm Pegasystems hit with $2 billion verdict

One of the longest-standing application organizations in Massachusetts, Pegasystems explained it planned to appeal the verdict, a process which could acquire various many years.

“The verdict is not supported by the information of the circumstance or the regulation and is the end result of significant mistake,” Lisa Pintchman, vice president of company communications, mentioned in a statement to the World. “We approach to vigorously go after our publish-trial remedies and will definitely attraction what we feel is an unjust end result.”

Pegasystems and Appian both of those make application that helps companies develop their individual purposes. During the trial, Appian alleged that Pegasystems paid out an worker of a federal government contractor from 2012 to 2014 to master about Appian’s software and go the data on to its rival.

“We place forward potent proof that Appian trade techniques have been misappropriated by Pegasystems,” Christopher Winters, Appian’s basic counsel, stated in a statement. “The award of sizeable damages to Appian is totally ideal provided the incorrect perform by Pegasystems.”

The $2 billion of damages arrived about immediately after Appian alleged that the stolen trade strategies served Pegasystems entice absent prospects together with Amazon and the US Census Bureau, as perfectly as generally make improvements to its goods to boost profits given that 2012.

Appian discovered of the alleged scheme following it hired a former Pegasystems personnel, in accordance to courtroom filings.

“We were deeply shocked,” Appian main executive Matt Calkins, who cofounded the company in 1999, instructed the Globe. “You can see the seriousness of what occurred in the seriousness of the verdict… It is not just the dollar amount of money that matters right here. It’s a assertion.”

But the measurement of the award, 1 of the biggest ever in a trade secrets and techniques scenario, could signal some problems with the jury’s decision-creating process, according to University of Florida law professor Elizabeth Rowe. The video clips, e-mails, and text messages offered in the situation could have inspired the jury to punish Pegasystems, which could open the door for a effective charm.

“Typically when the carry out is egregious, jurors shell out a lot less interest to the technicalities,” Rowe explained. “The situation results in being focused on the theft, and everyone overlooks the complex aspect about no matter whether every little thing was a trade key and how significantly it was truly worth.”

Appian also alleged that, in 2019, Pegasystems personnel made use of wrong identities to sign up for demo versions of Appian’s computer software — together with Pegasystems’ founder and CEO Alan Trefler, who utilised the alias “Albert Skii,” in accordance to court docket filings.

Trefler, a Brookline indigenous, founded Pegasystems in 1983 and constructed it into one particular of the largest application builders in the region. In modern a long time, the business has shifted its concentration from regular packaged software package to cloud-based mostly services. Pegasystems’ earnings jumped 19 p.c past 12 months to $1.2 billion.

Trefler’s 49 per cent stake in the company is worth about $2 billion. He landed at range 1,053 on the Forbes list of billionaires this calendar year.

The business vacated some of its office environment room in Cambridge last 12 months and moved to a new improvement in Waltham. Pegasystems employed much more than 1,000 folks in Massachusetts, Trefler advised the Globe past yr.

Aaron Pressman can be achieved at [email protected]. Abide by him on Twitter @ampressman.