Corporate espionage? Trade Secrets? Statutory construction? Don’t skip the Supreme Court’s recent opinion in Appian Corp. v. Pegasystems, Inc.

Here’s what you need to know:

1. This is an important Virginia’s Uniform Trade Secrets Act opinion. The SCV decided questions about the burden of proof on damages as well as how to interpret our VUTSA statute.
2. Looking for an example of when a Circuit Court abuses its discretion for your next appeal? Look no further! Hint: It doesn’t happen often.
3. At the VBA’s appellate summit, I spoke on a panel with some fantastic lawyers who opined that Amicus Briefs are becoming more popular and important in Virginia. Here, the SCV mentions one such amicus in the Opinion. If you’re on the fence about whether an amicus brief matters, add this data point into the mix.
4. Is it possible to be the villain of the story and still win on appeal? Yep. So next time you think “everyone is going to hate my case,” just remember this one 😉

Let’s talk about the opinion.

Justice Russell wrote for the Court. Interestingly, there wasn’t a single dissent even though some might have said that reasonable folks could have disagreed here on some of the issues.

Background: Appian won $2 billion against its competitor, Pegasystems, for misappropriating trade secrets. The CAV reversed Appian’s victory, but the SCV granted this appeal (and Pega’s assignment of cross-error).

Here’s a takeaway for trial lawyers: the Circuit Court excluded some of Pega’s important evidence and even prevented it from attempting to authenticate some relevant software. The SCV was only able to review these issues because the trial lawyers did something hard—they proffered the missing evidence. A proffer is an offer of excluded evidence, made in an appropriate format and at the right time, so that the appellate courts can: (1) see if the evidence was admissible or not; and (2) decide if any error was harmless. Don’t forget to proffer! Now, did the Circuit Court judge seem annoyed? Absolutely. But did the Circuit Court judge get reversed? They sure did.

Issues: The SCV decided the evidence was sufficient to show misappropriation of trade secrets. The SCV also decided that Appian, as plaintiff, bore the entire burden of proof on damages (this was an open question). When the Circuit Court judge went “nuclear” in its discovery sanctions, the SCV found this was a rare abuse of discretion. There was also a problematic jury instruction that misstated the law (jury instructions can make good appeal issues!). Harmless error? Not a chance. Presumably the billions of dollars at stake played a role in that analysis but the SCV didn’t explain. The opinion is worth a read, even if you don’t plan on committing corporate sabotage anytime soon.Did any of you play a game in school where you would create your own Bingo board with your friends? Maybe it was when you watched a movie or during BarBri lectures (Guilty!). This case checks all the boxes for a nerdy appellate lawyer Bingo game. It wouldn’t be a quintessential Virginia appeal if we didn’t have some references to common law, favorite treatises, and Virginia courts saying they are not persuaded by other jurisdictions or model statutes. Classic.