Appian-Pega lawsuit gets Fairfax retrial

The Virginia Supreme Court has ordered a new trial in a $2 billion trade secrets lawsuit involving McLean-based software company Appian, which sought to reinstate its 2022 jury award from Massachusetts-based Pegasystems.

In 2020, Appian sued competitor Pega and Youyong Zou, a consultant who allegedly acted as Pega’s “spy,” providing the company with copies of Appian’s software and documentation.

Pega disputed the claim, saying that anything it viewed via Zou was available to the public. A Fairfax County Circuit Court jury found in Appian’s favor and returned the record $2.04 billion verdict against Pega. However, a Virginia Court of Appeals panel reversed the decision in 2024, saying that Appian was improperly relieved of the burden of proving that Pega financially benefited from misappropriating Appian’s trade secrets.

Appian then sought relief by appealing to the Virginia Supreme Court, which took up its petition in March 2025 and in January backed the appeals court’s reversal.

Representing the bench, Justice Wesley G. Russell Jr. wrote that the circuit court erred “in concluding that the number of people with access to the claimed trade secrets was irrelevant,” and it also erred in giving an instruction that Pega, rather than Appian, was required to prove that “portions of its raw sales figures did not represent profits tied to the misappropriation” of Appian’s software. That was supposed to be Appian’s burden, both the appeals court and the Virginia Supreme Court found.

Although the Supreme Court’s ruling favors Pega by ordering a retrial, Russell did not go easy on the company.

His 43-page opinion noted that the company’s internal communications “characterized Zou as its Appian ‘spy,’” and said that Pega’s leaders “spent hours and hours removing [Zou’s] name from the videos” he prepared for the company, passing along tutorial videos he received from Appian. In early 2012, Zou, who was employed by government contractor Serco, “started moonlighting as a consultant for Pega,” according to the opinion.

Zou lost access to Appian’s server in 2014, Russell wrote, but “Pega continued to attempt to access Appian’s systems surreptitiously,” until Appian became aware of the issue in 2020, according to the opinion.

Now, the case will go back to Fairfax County Circuit Court, where a new judge will take it up, as the 2020 trial judge has since retired. An initial status conference for the retrial is scheduled for May 7.