Appian shares soared and Pegasystems shares tumbled after a Virginia jury ordered Pegasystems to pay its software rival US$2.04 billion in damages for misappropriating trade secrets.
The damages award issued by the Fairfax County Circuit Court jury followed a seven-week trial, and maybe the largest in Virginia's history, Appian said.
Shares of Appian rose as much as 38 percent, while Pegasystems fell as much as 45 percent.
Appian, based in McLean, Virginia, alleged in its May 2020 lawsuit that Pegasystems retained an employee of a government contractor from 2012 to 2014 to access its software, helping it to improve its own products and better train its sales force.
It said Pegasystems, based in Cambridge, Massachusetts, referred internally to the contractor as a "spy" and to its scheme as "Project Crush," with some employees using bogus credentials to fool Appian into providing access.
Appian said the jury found the misappropriation willful and malicious, which could enable it to recoup legal fees.
Pegasystems spokeswoman Lisa Pintchman said the verdict resulted from a "significant error" and was not supported by the facts or law, and that the company "will certainly appeal what we believe is an unjust result."
The damages award included US$1 for a violation of the Virginia Computer Crimes Act, Pegasystems said.
In 2021, Appian posted a US$88.6 million net loss on US$369.3 million of revenue, while Pegasystems lost US$63 million on revenue of US$1.21 billion, regulatory filings show.
Appian general counsel Christopher Winters said in a statement: "The award of substantial damages to Appian is entirely appropriate given the nature and extent of what Pegasystems did."