Virginia Supreme Court orders new trial in $2B Appian-Pega case

The Virginia Supreme Court 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 an individual, Youyong Zou, an employee of a government contractor 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 three-judge panel reversed the decision in 2024 and ordered a new trial, 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. In October 2025, the court heard arguments from both companies. However, the five justices backed the Court of Appeals’ reversal ruling in Thursday’s opinion, authored by Justice Wesley G. Russell Jr.

Representing the bench, Russell 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 in their rulings.

Although the Supreme Court’s ruling favors Pega by ordering the case back to circuit court, 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 Serco, “started moonlighting as a consultant for Pega,” the opinion said.

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.

The opinion concludes with an order to remand the case to the Court of Appeals, which must send the case back to Fairfax County Circuit Court.

“We are pleased that the Supreme Court of Virginia fully and unanimously agreed that there was reversible error in the trial court,” a Pegasystems spokesperson said in a statement Thursday. “In a future retrial, we’ll be able to introduce important evidence that was precluded, and the burden of proof will be properly placed on Appian.”

Appian released a statement Thursday, saying it intends to press its trade secrets case against Pegasystems and quoting from the court’s opinion.

“None of the issues addressed by the Supreme Court of Virginia go to the principal facts regarding Pega’s misappropriation of Appian trade secrets. We will present that evidence to a new jury and remain confident our claims will be properly addressed by Virginia courts,” said Jaye Campbell, Appian’s general counsel.