# Appian v. Pegasystems: How a $2 Billion Trade-Secret Verdict Came Undone

> The largest damages award in Virginia history was set aside over four trial errors, and the whole case goes back for a new trial. A masterclass in trade-secret causation, and a warning that revenue is not damages.

Topic: Trade Secrets  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/appian-v-pegasystems-trade-secret-damages/


*Appian Corp. v. Pegasystems, Inc.*, Record No. 240736 (Va. Jan. 8, 2026), is the trade-secret damages decision of the cycle. A Fairfax County jury had awarded Appian $2,036,860,045 against Pega (plus $5,000 against the contractor, Youyong Zou), the largest damages award in Virginia history and among the largest trade-secret verdicts ever returned. The Court of Appeals of Virginia reversed on July 30, 2024, and on January 8, 2026, the Supreme Court of Virginia affirmed that judgment. Appian's claim survived in the sense that mattered most to it: both courts held the evidence was sufficient to support the jury's finding of misappropriation, so Pega does not win as a matter of law. But the verdict itself was set aside, and the case returns to the circuit court for a new trial. The central lesson is one every trade-secret litigant should absorb: proving misappropriation is not the same as proving damages, and a defendant's revenue is not, without more, the plaintiff's loss.

## At a glance

- **Case:** *Appian Corp. v. Pegasystems, Inc.*, Record No. 240736 (Supreme Court of Virginia)
- **Key dates:** Jury verdict May 2022; Court of Appeals reversal July 30, 2024 (*Pegasystems Inc. v. Appian Corp.*, 81 Va. App. 433); Supreme Court of Virginia affirmance January 8, 2026
- **Holding:** The evidence was sufficient to support the jury's misappropriation finding, so Pega's motions to strike and to set aside the verdict were properly denied. But the circuit court committed four errors, and the ~$2 billion judgment was reversed and remanded for a new trial on Appian's VUTSA claims
- **Status:** The verdict is set aside. The new trial is not limited to damages: two of the four errors bear on whether the information qualified as a trade secret at all

## The claim and the verdict

Appian and Pegasystems are competitors in business-process-management software. Appian alleged that Pega had obtained its confidential information (including through a contractor who accessed Appian's platform) and used it to improve Pega's competing product, in violation of the Virginia Uniform Trade Secrets Act (VUTSA). The jury agreed on liability and awarded damages measured by Pega's sales: in essence, the revenue Pega earned during the period following the misappropriation.

It is the damages methodology, not the finding of misappropriation, that unraveled on appeal.

## The instruction that sank the award

Under VUTSA, as under the Uniform Trade Secrets Act generally, a plaintiff may recover damages for the actual loss caused by misappropriation and for any unjust enrichment not captured by actual loss. The operative word is *caused*: the statute compensates harm attributable to the misappropriation, not all revenue a defendant happened to earn.

At trial, the circuit court granted Instruction #14 at Appian's request. It told the jury that Appian had "the burden of establishing by greater weight of the evidence Pegasystems' sales," but that Pega bore the "burden of establishing by greater weight of the evidence any portion of the sales not attributable to the trade secret or trade secrets and any expenses to be deducted in determining net profits." As the Supreme Court of Virginia described the effect, the instruction entitled Appian, once it had shown misappropriation and sales, to all of Pega's sales revenue as damages unless Pega could convince the jury the sales were unrelated to the misappropriation or offset by expenses.

Both appellate courts held this misstated Virginia law. The court grounded the point in common law rather than in anything peculiar to VUTSA: it has "long ... been a fundamental precept of Virginia law that a plaintiff bears the burden of proving both that he has been harmed by the defendant's wrongful act and that the defendant's wrongful act proximately caused the damages the plaintiff seeks to recover." The instruction relieved Appian of that burden and let the jury equate Pega's gross sales with compensable harm.

Instruction #14 is the most quotable error, but it was not the only one, and this is where most summaries of the case go wrong. The Court of Appeals identified four: (1) Instruction #14's burden-shifting; (2) improperly foreclosing Pega, based on its response to Interrogatory #18, from showing that many of its sales came from areas where Appian did not compete; (3) refusing to let Pega authenticate its software evidence, which the Court of Appeals called "a principal means of demonstrating it did not steal secrets through Zou"; and (4) Instruction #13-1, which told the jury the number of people with access to Appian's platform was "not relevant."

Those last two matter for scope. The software evidence went to whether Pega copied anything, and the number of people with access bears on whether Appian made "efforts that are reasonable under the circumstances to maintain" secrecy, which is an element of trade-secret status itself. So the errors were not confined to the damages figure. The Court of Appeals "reverse[d] the judgment as to the VUTSA claims and remand[ed] for a new trial," and the Supreme Court affirmed, noting that its affirmance "results in the verdict in the circuit court being set aside" and that it could not call the "combination of the errors" harmless.

On the number-of-people question the Supreme Court took care to distinguish two ideas. Sharing information with others does not automatically destroy trade-secret protection. Under *Dionne v. Southeast Foam Converting & Packaging, Inc.*, 240 Va. 297, 302 (1990), the owner of a trade secret "may, without losing protection, disclose it to a licensee, an employee, or a stranger, if the disclosure is made in confidence, express or implied." Reading *Dionne*, the Supreme Court observed that purported trade secrets can be disclosed to a million people and remain protected so long as the disclosures were made in confidence. But it does not follow that the raw number is irrelevant, because "the more people who learn of a secret, the less likely it is that it will remain a secret." Treating the number as categorically irrelevant was error. Note the direction of that ruling: it favors Pega on retrial, and it restates existing precedent rather than announcing a new rule.

## Why it matters beyond Virginia

VUTSA is Virginia's enactment of the Uniform Trade Secrets Act, and the causation principle the court enforced is common to UTSA jurisdictions and echoes the federal Defend Trade Secrets Act. The decision's reasoning therefore travels. Its central teaching is a caution to plaintiffs everywhere who are tempted to let a large, round revenue figure stand in for a rigorous causation analysis: a damages model equating a defendant's total revenue with the plaintiff's loss, without proof that the misappropriation caused that revenue, is legally infirm.

It is equally a reminder that the size of a verdict is no guarantee of its durability. A record-breaking award built on a flawed instruction is a fragile thing, and the more a damages theory depends on burden-shifting or on revenue untethered from causation, the more exposed it is on appeal. Note too how the errors compounded: the Supreme Court declined to find them harmless because of their combination, not because any single one was fatal on its own.

## Open questions

The remand puts the whole VUTSA case back in play, not just the number. Appian must again prove misappropriation, this time against software evidence Pega was previously not allowed to authenticate and against evidence of how many people had access to the platform. If it clears that bar, it must then prove causation-linked damages on a proper instruction: whether it can tie specific Pega gains to the misappropriated information, and what figure a correctly instructed jury returns. More broadly, the case sharpens an unresolved tension in trade-secret law between unjust-enrichment recovery (which looks to the defendant's gains) and the causation requirement (which demands a link to the misappropriation), a tension that recurs whenever a plaintiff seeks to disgorge a defendant's revenue.

## Implications for litigants and businesses

- **Plaintiffs: prove causation, not just revenue.** Build a damages case that connects the misappropriation to identifiable gains or losses. Do not rely on instructions that shift the causation burden to the defendant.
- **Defendants: attack the damages model and the instructions.** Even where liability is strong, a revenue-equals-damages theory and any burden-shifting instruction are prime targets on appeal. Preserved evidentiary objections matter too: here they were what widened the retrial beyond damages.
- **For all companies: confidentiality can arise without a contract, but the headcount still counts.** Information shared under circumstances implying confidence may qualify as a trade secret even without an express agreement. That said, the number of people given access is relevant to whether the owner's secrecy efforts were reasonable, so access control is not a formality.

## Frequently asked questions

**Did Pegasystems win?** Partially. It did not win outright: the courts held the evidence was sufficient to support the jury's misappropriation finding, so Appian's claim survives and can be retried. But the ~$2 billion verdict was set aside and the VUTSA claims go back for a new trial on liability and damages alike.

**What was wrong with the damages award?** Jury Instruction #14 let Appian treat Pega's total sales as damages unless Pega proved which portion was not attributable to the trade secrets. The Supreme Court of Virginia held that a plaintiff bears the burden of proving the defendant's wrongful act caused the damages it seeks, so the instruction misstated Virginia law.

**Was the retrial limited to damages?** No. The Court of Appeals reversed the judgment as to the VUTSA claims and remanded for a new trial, and the Supreme Court of Virginia affirmed. Two of the four errors went to whether the information was a trade secret at all, so the retrial is not confined to the damages figure.

## Authorities and sources

- *Appian Corp. v. Pegasystems, Inc.*, Record No. 240736 (Va. Jan. 8, 2026): [slip opinion (Supreme Court of Virginia)](https://www.vacourts.gov/opinions/opnscvwp/1240736.pdf); [decision-date summary (Virginia Appellate Law Blog)](https://virginiaappeals.org/2026/01/08/appian-corp-v-pegasystems-inc-record-no-240736-va-jan-8-2026/).
- *Pegasystems Inc. v. Appian Corp.*, 81 Va. App. 433 (July 30, 2024): [opinion (Court of Appeals of Virginia)](https://www.vacourts.gov/opinions/opncavwp/1399224.pdf) (the decision affirmed above; the disposition reverses "the judgment as to the VUTSA claims" and remands for a new trial).
- Va. Code § 59.1-336 (VUTSA definitions, including "efforts that are reasonable under the circumstances to maintain its secrecy"): [Virginia Law Library](https://law.lis.virginia.gov/vacode/title59.1/chapter26/section59.1-336/).
- Analysis: [Holland & Knight, "Virginia High Court Upholds Reversal of Trade Secret Damages Award"](https://www.hklaw.com/en/insights/publications/2026/01/virginia-high-court-upholds-reversal-of-trade-secret-damages-award); [Holland & Knight on the 2024 Court of Appeals reversal](https://www.hklaw.com/en/insights/publications/2024/08/virginia-court-of-appeals-reverses-historic-trade-secret-verdict).