Justia Virginia Supreme Court Opinion Summaries

Two competing software companies specializing in business process management platforms were embroiled in a dispute after one company's employee, acting as a covert consultant, obtained confidential information about the other’s products. The employee, who had access through a third-party government contractor, provided the competitor with detailed tutorials, internal documentation, and live presentations designed to help the competitor improve its own offerings and target the rival’s weaknesses in sales efforts. The information was disseminated within the competitor’s organization and used both to inform product development and to shape competitive strategy. The aggrieved company discovered the espionage years later when the consultant’s handler joined its staff and disclosed the conduct. The company then pursued claims for trade secret misappropriation under the Virginia Uniform Trade Secrets Act, among other causes.The Circuit Court for Fairfax County oversaw a lengthy trial and issued several key evidentiary and instructional rulings: it excluded evidence about the number of users who had access to the alleged trade secrets, limited the competitor’s damages defense based on a discovery response, prohibited the competitor from authenticating certain software versions except on a specified laptop, and issued a damages instruction that shifted the burden of proof to the competitor. The jury found for the plaintiff and awarded substantial damages. The Court of Appeals of Virginia affirmed the jury’s finding of misappropriation but reversed the judgment, holding that the circuit court committed multiple errors in its evidentiary rulings and jury instructions, and remanded for a new trial on the trade secret claims.On further appeal, the Supreme Court of Virginia affirmed the Court of Appeals’ judgment. It held that the circuit court erred by shifting the burden of proof for damages to the defendant, by limiting the defendant’s damages evidence, by precluding authentication of software exhibits, and by instructing the jury that the number of people with access to the trade secrets was irrelevant. The Supreme Court ordered a remand for further proceedings consistent with its opinion. View "Appian Corporation v. Pegasystems" on Justia Law