# Pegasystems Inc. v. Appian Corporation

> District Court, D. Massachusetts · September 30, 2022

URL: https://www.frixlaw.com/law-library/cases/10200566

## Case

- **Court:** District Court, D. Massachusetts
- **Decided:** September 30, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10200566

## How later opinions describe it (automated extraction)

- finding evidence of direct competition would have sufficed to entitle plaintiff to disgorgement
- finding that rhetorical hyperbole are not actionable

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
________________________________________
)
PEGASYSTEMS INC., )
)
Plaintiff, )
) Civil Action
v. ) No. 19-11461-PBS
)
APPIAN CORPORATION and BUSINESS PROCESS )
MANAGEMENT, INC., )
)
Defendants. )
______________________________ )

MEMORANDUM AND ORDER
September 30, 2022
Saris, D.J.
INTRODUCTION1
Plaintiff Pegasystems Inc. sued Defendants Appian Corporation
and Business Process Management, Inc., accusing them of false
advertising and commercial disparagement arising from an online
report that portrayed Pegasystems unfavorably in the marketplace.
Appian filed parallel counterclaims against Pegasystems accusing
it of false advertising and commercial disparagement in its
marketing materials. After protracted discovery, Defendants moved
for summary judgment on Pegasystems’ claims and Pegasystems cross-
moved for partial summary judgment on its claims and moved for

1 The Court assumes familiarity with its prior opinions in this
case. See Pegasystems, Inc. v. Appian Corp., 424 F. Supp. 3d 214
(D. Mass. 2019) (“Pegasystems I”); Pegasystems, Inc. v. Appian
Corp., 463 F. Supp. 3d 152 (D. Mass. 2020) (“Pegasystems II”).
summary judgment on Appian’s counterclaims. After hearing, the
Court ALLOWS IN PART and DENIES IN PART Defendants’ motions for
summary judgment, DENIES Pegasystems’ cross-motion for partial

summary judgment on its claims, and ALLOWS IN PART and DENIES IN
PART Pegasystems’ motion for summary judgment on Appian’s
counterclaims.
FACTUAL BACKGROUND
The following facts are undisputed except where stated.
Pegasystems and Appian are publicly traded companies that compete
in the business process management (“BPM”) software field. BPM
software applications allow enterprises to automate and optimize
their business processes and functions. Pegasystems and Appian
typically sell their BPM platforms for millions of dollars to large
corporations or government agencies. The industry is competitive,
with many vendors besides Pegasystems and Appian all competing in

the BPM software space.
Defendant Business Process Management, Inc. (“BPM.com”), led
by Nathaniel Palmer, operated the BPM.com website, which reported
on the BPM industry.
This case concerns various marketing materials that Appian
and Pegasystems promulgated about each other, purportedly
containing falsehoods.
A. Appian Marketing Materials – The BPM.com Report
Pegasystems challenges the BPM.com Report, an Appian document
that Pegasystems alleges constituted false advertising. Appian
hired BPM.com to prepare the Report in 2018, and it was published
on both the BPM.com and Appian websites on or around May 16, 2019.2

Appian paid BPM.com $55,000 under the contract for the report.
The contract provided that BPM.com would conduct market research
and produce a white paper that would “clearly identify and
articulate[] the value delta of Appian over Pega.” Dkt. 575-64 at
5. The process of shaping the market survey and drafting the white
paper was iterative between BPM.com and Appian, and the parties
hotly contest whether the survey methodology was sound.
The BPM.com Report presented survey responses from customers
of various BPM vendors, most notably Appian, Pegasystems, and IBM.
The report published findings about each vendor across four areas:
(1) total cost of ownership (“TCO”); (2) project team breakdown
and total FTEs (i.e., full-time equivalents); (3) time to

market/speed of application delivery; and (4) enterprise platform
vs. departmental silos. The report’s results and associated
commentary portrayed Appian more favorably than its competitors,
including Pegasystems. For example, the report stated that “Pega
customers reported spending on average 11 times more than Appian
customers, and nearly twice that of IBM customers.” Dkt. 575-6 at
11. It also said that “Appian customers reported delivery on

2 BPM.com took down the report in July 2019, and Appian removed
it from its website on or around January 17, 2020.
average in one-fifth the amount of time cited by Pega customers,
and nearly 3 times faster than IBM customers.” Id. As to FTEs,
the BPM.com Report warned that “Pega customers required about 5

times more FTEs on average than Appian customers (who cited the
lowest TCO).” Id. And with regard to enterprise-wide deployments,
the report touted Appian for having “the most responses for
enterprise-wide deployments (59% of all deployments).” Id.
Appian encouraged its sales team to use the BPM.com Report,
particularly when competing against Pegasystems. Appian further
promoted the BPM.com Report by emailing it to customers and
partners, sharing it through social media, and using a third-party
marketing company to publicize the report.
B. Pegasystems Marketing Materials
In its counterclaims, Appian challenges a series of
Pegasystems documents that Appian asserts amounted to false

advertising (the “Pegasystems Marketing Materials”).
1. Scalability White Paper and Slide Deck
In March 2012, then-Pegasystems employees John Petronio and
Michael Caton (who both now work for Appian) developed the
Scalability White Paper. The paper was titled “Appian Scalability
Limitations.” Dkt. 575-86 at 46. The Scalability White Paper
noted that some BPM initiatives fail because organizations do not
understand the importance of scalability. The paper summarized
its findings as follows:
This paper outlines the differences between the BPM
solutions from Pega and Appian, a privately-held, “pure
play” BPM vendor. While Appian has a number of
capabilities that will demonstrate well in a pilot
project, when faced with real-world scalability
challenges, we believe Appian to have many limitations
that threaten an organization’s success. Pega’s
solution is far more scalable for enterprises.
Id.
The Scalability White Paper compared Pegasystems favorably to
Appian across several factors that bear on each platform’s
scalability. In making these comparisons, the Scalability White
Paper made several claims that Appian asserts are false, including:
•
“Appian lacks basic backend performance/tuning tools.” Id.
at 49.
•
“There is no way to have more than one person working on a
process at one time.” Id. at 51.
•
“Because Appian requires a great deal of JavaScript,
especially for the user interface, it is not truly model-
driven.” Id. at 54.
In contrast, the paper concluded that “Pega is a platform for
modernization. It is agile and adaptive, can handle complexity to
not only perform under load but [also to] allow organization[s] to
automate processes and tasks. Furthermore, it will allow
organizations to leverage existing investments in enterprise
applications.” Id. at 62.
The Scalability Slide Deck accompanied the Scalability White
paper, and was titled “Why Appian is Not the Choice for Enterprise
BPM.” It contained just one substantive slide, which purported to
score both Pegasystems and Appian across ten factors related to
scalability. Pegasystems outscored Appian for each factor, with
Pegasystems averaging a 9.50/10 and Appian averaging a 4.16/10.
The deck does not reveal how Pegasystems arrived at these scores.
Pegasystems shared the Scalability White Paper externally at

least six times before September 3, 2015, and the Scalability Slide
Deck at least once in May 2012. Appian asserts that Pegasystems
likely shared these documents externally on additional occasions
that were not in the summary judgment record.
2. Technical Competitive Brief
While still employed at Pegasystems, Petronio and Caton
created the original version of the Technical Competitive Brief,
a document titled “Understanding Appian,” in August 2012. As with
the Scalability White Paper, the Technical Competitive Brief
maligned Appian’s scalability. A May 2014 version of the Technical
Competitive Brief stated that Appian:
[L]acks the ability to reuse and manage versions. It
has no tools for capturing objectives, testing and
troubleshooting performance. It lacks key capabilities
needed to scale and manage running systems. It lacks
depth with integration, decision management and
analytics. In short, Appian lacks the power to manage
enterprise challenges and complexities.
Dkt. 596-105.
The various versions of the Technical Competitive Brief make
several additional claims about Appian’s scalability that are
similar to those in the Scalability White Paper. See id.
Pegasystems shared the Technical Competitive Brief externally
on at least thirty occasions to a total of fifteen organizations
between its publication and November 2017. Pegasystems also
circulated both the Scalability White Paper and the Technical
Competitive Brief to its internal sales force to provide

salespersons with talking points.
3. Sinur Paper
Pegasystems and Appian were competing over projects at Bank
of America in early 2014. Around that time, Pegasystems hired Jim
Sinur, a researcher and influencer within the BPM community, to
draft a report comparing Pegasystems’ and Appian’s platforms.
Pegasystems paid Sinur $5,000 to draft the Sinur Paper.
Pegasystems provided Sinur with the contents of the Technical
Competitive Brief before he began drafting the paper and conveyed
to Sinur that Pegasystems wished to portray Appian’s platform as
less scalable than Pegasystems’. Upon receiving Sinur’s initial
draft, Pegasystems personnel edited the document after concluding

that it was too slanted toward Pegasystems and would (correctly)
appear to be a Pegasystems-commissioned piece.
The final Sinur Paper was dated February 24, 2014, and titled
“Appian and Pegasystems – Head to Head Comparison.” Dkt. 596-71
at 3. It did not disclose that Pegasystems commissioned the paper.
The document highlighted the “advantages” and “challenges” of both
companies. It concluded that “Appian has a highly appealing tool
from a visual and pricing perspective” but its approach leads to
“far greater total cost of ownership (TCO),” while “Pega does cost
more, but it supports these two critical strategies [i.e., reuse
and end-to-end processes] perfectly to keep the overall TCO much
lower over time.” Id. at 8. The report ended, “If you are picking

one over the other, you need to look at the nature of the processes
you will attempt over time. If they are strategic, pick Pega. If
you happen to own both tools, use Appian for tactical standalone
processes that will not grow in performance needs and use Pega for
strategic and wide impact processes.” Id.
Appian points to several claims in the Sinur Paper that it
views as false, including:
•
“While Appian has shown success in departmental
implementations, there is little evidence of cross
organizational process implementations. There is almost no
evidence of transformational implementations that have
enabled an organization to transform its business
incrementally on a large scale with deep business change.
In addition, there is not a significant mass of
professional support that would help an organization scale
to transformational efforts with only 600 consultants.”
Id. at 5.
•
“Appian’s vertical focus has been primarily in government.
In the past few years, Appian has started to develop
inroads in other verticals, including mid-sized banks,
healthcare, and utilities. Many of these implementations
are aimed at the functional level.” Id. at 4.
•
“Many of Appian’s implementations remain in the cloud once
in production.” Id.
Pegasystems hosted the Sinur Paper on its website from
approximately March 2014 to January 2019. It encouraged its sales
force to direct clients to the Sinur Paper.
Pegasystems also used statements in the Sinur Paper in other
marketing materials. In March 2016, Pegasystems created a document
called the “Appian vs. Pega 7 BPM Comparison Chart” (the
“Competitive Comparison Chart”) for use with prospective client
Intel Corporation, which was considering both companies for its

enterprise BPM platform. The Competitive Comparison chart quoted
many of the statements that Appian challenges from the Sinur Paper
and attributed them to Sinur. Similarly, in May 2018, Pegasystems
created a document titled “Pega vs. Appian Technology Assessment”
(the “Technology Assessment”) that linked to the Sinur Paper and
quoted many of its claims about Appian’s ability to scale.
Pegasystems used the Technology Assessment to compete for an
opportunity with the Social Security Administration that the two
companies were vying for.
4. Pega 7 vs. Appian Comparison
The Pega 7 vs. Appian Comparison is a Pegasystems-branded
slide deck that Caton created in January 2015. It listed several

software capabilities and their benefits, then stated whether the
two companies had these capabilities; in all cases, the deck listed
Pegasystems as having the capabilities but in many cases Appian
did not. For example, the deck described Pegasystems as having,
and Appian as lacking, a “[c]ollaborative, concurrent development
environment” which “[s]peeds development by ensuring developers
can work on different aspects of an application simultaneously,
while having access to end user feedback mechanisms within the
development environment to ensure user feedback is incorporated
quickly and accurately.” Dkt. 575-86 at 74.
Pegasystems circulated the Pega 7 vs. Appian Comparison
externally on at least five occasions, ending in June 2016. It

also circulated the deck to its sales team.
5. LinkedIn Post
Appian also challenges a LinkedIn post that Pegasystems
Senior Vice President and Chief Marketing Officer Tom Libretto
made in connection with this lawsuit. On December 5, 2019, this
Court denied Appian’s motion to dismiss Pegasystems’ Complaint in
part, allowing Pegasystems’ claims to proceed. See generally
Pegasystems I. In the immediate aftermath of the decision,
Libretto wrote on LinkedIn:
We all encounter examples of business ethics we find
questionable . . . patent trolls, paid content promoted
as ‘unbiased truth,’ and sometimes just blatant lies.
I’m proud to work for a company that is not afraid to
undertake the unpleasant action of litigating against
those whose actions we believe are unlawful and
unethical. If you’re thinking about Appian, you should
read this first[.]
Dkt. 599-1 at 175.
The post then linked to an article on the website
universalhub.com that summarized the Court’s ruling. Libretto and
Pegasystems management encouraged salespersons to share the post
and to use it when competing against Appian.
PROCEDURAL BACKGROUND
Pegasystems filed its initial Complaint against Appian and
BPM.com on July 3, 2019, and an Amended Complaint (Dkt. No. 55) on
December 4, 2019. The Amended Complaint brings claims of False
Advertising under the Lanham Act, 15 U.S.C. § 1125 (Count I);
violations of Mass. Gen. Laws ch. 93A §§ 2 and 11 (Count II); and

common law commercial disparagement or injurious falsehood (Count
IV), all based on the BPM.com Report. The Court dismissed an
additional claim for common law false advertising and unfair
competition (Count III). See Pegasystems I, 424 F. Supp. 3d at
225–26.
Appian’s operative pleading is its Amended Answer and
Counterclaims, which it filed on June 22, 2021 (Dkt. No. 335).
The Amended Counterclaims include claims for violation of the
Lanham Act (Counterclaim I), violations of Mass. Gen. Laws ch. 93A
§§ 2 and 11 (Counterclaim II), common law commercial disparagement
or injurious falsehood (Counterclaim III), and defamation
(Counterclaim IV) based on the Pegasystems Marketing Materials,

with Count IV relating only to the LinkedIn Post.
DISCUSSION
A. Legal Standard
Summary judgment is appropriate if “the movant shows that
there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56.
An issue is genuine for summary judgment purposes when “a rational
factfinder could resolve it in either direction.” Boudreau v.
Lussier, 901 F.3d 65, 71 (1st Cir. 2018) (cleaned up). A fact is
material “when it has potential of changing a case’s outcome.”
Doe v. Trs. of Bos. Coll., 892 F.3d 67, 79 (1st Cir. 2018). In
general, the moving party may satisfy its initial burden by

“affirmatively produc[ing] evidence that negates an essential
element of the non-moving party’s claim” or “point[ing] to
evidentiary materials already on file . . . that demonstrate that
the non-moving party will be unable to carry its burden of
persuasion at trial.” Carmona v. Toledo, 215 F.3d 124, 132 (1st
Cir. 2000). The burden then shifts to the nonmoving party to “set
forth specific facts showing that there is a genuine issue for
trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986).
This requires production of “evidence that is significantly
probative,” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1,
5 (1st Cir. 2010) (cleaned up), and not based upon “conclusory
allegations, improbable inferences, and unsupported speculation,”

Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.
1990). With respect to each motion for summary judgment, the court
“view[s] the facts in the light most favorable to the non-moving
party, drawing all reasonable inferences in that party’s favor.”
Barbour v. Dynamics Research Corp., 63 F.3d 32, 36 (1st Cir. 1995).
B. Analysis
The core issue in this case is whether Appian and BPM.com on
the one hand, and Pegasystems on the other hand, engaged in false
advertising under the Lanham Act and Mass. Gen. Laws ch. 93A and
the common law tort of commercial disparagement.
The Lanham Act makes liable any person who communicates any
“false or misleading description of fact, or false or misleading

representation of fact, which . . . in commercial advertising or
promotion, misrepresents the nature, characteristics, qualities,
or geographic origin of his or her or another person’s goods,
services, or commercial activities.” 15 U.S.C. § 1125(a)(1)(B).
A plaintiff bringing a Lanham Act false advertising claim must
prove that:
(1) the defendant made a false or misleading description
of fact or representation of fact in a commercial
advertisement about his own or another’s product;
(2) the misrepresentation is material, in that it is
likely to influence the purchasing decision; (3) the
misrepresentation actually deceives or has the tendency
to deceive a substantial segment of its audience;
(4) the defendant placed the false or misleading
statement in interstate commerce; and (5) the plaintiff
has been or is likely to be injured as a result of the
misrepresentation, either by direct diversion of sales
or by a lessening of goodwill associated with its
products.
Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d
302, 310–11 (1st Cir. 2002).
The elements of a false advertising claim under Chapter 93A
are the same as under the Lanham Act, and thus, on a motion for
summary judgment, “claims under the Lanham Act and Chapter 93A
rise and fall together.” Spruce Envtl. Techs., Inc. v. Festa Radon
Techs., Co., 248 F. Supp. 3d 316, 321 (D. Mass. 2017).
To establish a commercial disparagement claim, a plaintiff
must prove that the defendant:
(1) published a false statement to a person other than
the plaintiff; (2) “of and concerning” the plaintiff’s
products or services; (3) with knowledge of the
statement’s falsity or with reckless disregard of its
truth or falsity; (4) where pecuniary harm to the
plaintiff’s interests was intended or foreseeable; and
(5) such publication resulted in special damages in the
form of pecuniary loss.
HipSaver, Inc. v. Kiel, 984 N.E.2d 755, 763 (Mass. 2013).
A commercial disparagement claim differs from a Lanham Act or
Chapter 93A false advertising claim in that it (1) “imposes
liability only for false statements, while the Lanham Act also
encompasses misleading statements”; (2) “requires ‘actual malice,’
meaning the defendant either has knowledge of a statement’s falsity
or acts with reckless disregard of its truth or falsity”; and (3)
“does not require that the false statement be made in advertising,
as the Lanham Act does.” Pegasystems I, 424 F. Supp. 3d at 226
(citing Kiel, 984 N.E.2d at 767).
1. Appian and BPM.com’s Motions on Pegasystems’ Claims
a. Lanham Act — Injury
Appian and BPM.com challenge the fifth element of
Pegasystems’ Lanham Act claim: that the BPM.com Report caused
Pegasystems a legally cognizable injury. A plaintiff may prove
injury through loss of sales or goodwill. See Cashmere, 284 F.3d
at 311. “[A]lthough diversion of sales to a direct competitor may
be the paradigmatic direct injury from false advertising, it is
not the only type of injury cognizable under § 1125(a).” Lexmark
Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 138
(2014). One type of injury arises when “a defendant harms a
plaintiff’s reputation by casting aspersions on its business,” as

“the plaintiff’s injury flows directly from the audience’s belief
in the disparaging statements.” Id. A presumption of injury and
causation may arise where a defendant makes literally false
comparative statements about competing products. See Merck Eprova
AG v. Gnosis S.P.A, 760 F.3d 247, 259 (2d Cir. 2014); HipSaver
Co., Inc. v. J.T. Posey Co., 497 F. Supp. 2d 96, 106 (D. Mass.
2007).
Defendants contend that Pegasystems is not entitled to a
presumption of injury because multiple firms compete in the BPM
market. In HipSaver, this Court held that “the weight of the
caselaw in this circuit supports a rebuttable presumption of
causation and injury for willful literally false advertising in a

two firm market where a defendant makes comparative statements
targeting a direct competitor’s products.” Id. at 109. However,
a two-player market is not always required to give rise to the
presumption. The presumption of injury applies in cases involving
a “misleading comparison to a specific competing product [because
the comparison] necessarily diminishes that product’s value in the
minds of the consumer.” Merck Eprova, 760 F.3d at 259 (quoting
McNeilab, Inc. v. Am. Home Prods. Corp., 848 F.3d 34, 38 (2d Cir.
1988)); see also Porous Media Corp. v. Pall Corp., 110 F.3d 1329,
1336 (8th Cir. 1997); Harper House, Inc. v. Thomas Nelson, Inc.,
889 F.2d 197, 209 n.8 (9th Cir. 1989). One court recently
identified three scenarios in which the presumption of injury

applies: (1) “where the defendant made a false comparative
advertising claim”; (2) “where the statement at issue was
derogatory and undoubtedly referred only to the plaintiff”; or (3)
“in a ‘two-player market’ where there is evidence of ‘deliberate
deception.’” In re Elysium Health-ChrornaDex Litig., No. 17-cv-
7394, 2022 U.S. Dist. LEXIS 25090, at *158–59 (S.D.N.Y. Feb. 3,
2022) (quoting Merck Eprova, 760 F.3d at 259–61).
This is a false comparative advertising case to which the
presumption of injury applies. For purposes of this motion, Appian
and BPM.com do not dispute that the BPM.com Report contained
falsities, or even that the false statements were willful.
Further, the BPM.com Report is replete with comparative

statements. For example, it states that “Pega customers reported
spending on average 11 times more than Appian customers.” Dkt.
575-6 at 11. It also says that “Appian customers reported delivery
on average in one-fifth the amount of time cited by Pega
customers.” Id. Because the BPM.com Report’s comparative
statements would diminish Pegasystems in the minds of consumers,
it is entitled to the presumption of injury at this stage. See
Merck Eprova, 760 F.3d at 259.
The summary judgment record also presents a fact question
regarding whether the BPM.com Report caused Pegasystems
reputational injury. Three Pegasystems customers, Ford Motor
Company, Tracfone Wireless, and Great West Casualty Company raised

questions about the BPM.com Report’s claims to Pegasystems
following its publication. These customers did not move their
business from Pegasystems, but a reasonable jury could infer, based
on their concerns, that the BPM.com Report generated similar
concerns in the marketplace. Thus, there is a triable issue on
whether Pegasystems suffered reputational injury.
b. Damages
Appian and BPM.com argue that there is insufficient evidence
of economic injury to support a claim of monetary damages.
Pegasystems conceded at various points during discovery that it
had not identified any business it lost because of the BPM.com
Report.

Pegasystems now argues that it lost an opportunity with
Oklahoma Gas & Electric (“OG&E”) because of the BPM.com Report,
but its evidence on that score is weak. Ryan Byrne of Appian sent
two OG&E employees the BPM.com Report on May 14, 2019, in an email
noting that the document was “referenced in our discussion.” Dkt.
578-43 at 3. On May 15, Byrne wrote to several Appian colleagues
that “the OG&E folks were really excited to hear about” the BPM.com
Report. Dkt. 578-42 at 2. However, there is no testimony or
documentary evidence from OG&E that the BPM Report was a
substantial factor in its decision. Even assuming OG&E read the
report (which is far from clear), on this record, no reasonable
jury could conclude that Pegasystems lost the OG&E opportunity

because of the BPM.com Report.
Neither of Pegasystems’ experts provides an opinion which
supports a claim for monetary damages.3 Accordingly, the Court
allows defendants’ motions for summary judgment on the claim for
money damages for lost business.
c. Disgorgement
While Pegasystems may not seek monetary damages at trial, it
can seek disgorgement from Appian. “If a plaintiff without
specific evidence of injury proves direct competition and
willfulness, an accounting may be available to the plaintiff
‘subject to the principles of equity.’” Hipsaver, 497 F. Supp. 2d
at 107 (quoting Tamko Roofing Prods., Inc. v. Ideal Roofing Co.,

Ltd., 282 F.3d 23, 35 (1st Cir. 2002)); see also Merck Eprova, 760
F.3d at 261–62. Additional principles of equity that courts look
to in determining whether disgorgement is appropriate include:
(a) the degree of certainty that the actor benefitted
from the unlawful conduct; (b) the relative adequacy to
the plaintiff of other remedies, including an award of
damages; (c) the interests of the public in depriving
the actor of unjust gains and discouraging unlawful
conduct; (d) the role of the actor in bringing about the
infringement or deceptive marketing; (e) any
unreasonable delay by the plaintiff in bringing suit or

3 The Court will address Appian’s Daubert motions (Dkt. 582; Dkt.
587) at a later date.
otherwise asserting its rights; and (f) any related
misconduct on the part of the plaintiff.
Hipsaver, 497 F. Supp. 2d at 109 (quoting Restatement (Third) of
Unfair Competition § 37(2) (Am. L. Inst. 1995)).
Critically, “[i]n assessing profits the plaintiff shall be
required to prove defendant’s sales only; defendant must prove all
elements of cost or deduction claimed.” 15 U.S.C. § 1117(a). This
means that “the plaintiff does not need to show which of the
defendant’s profits were attributable to the false advertising; on
the contrary, the defendant bears the burden of showing any portion
of sales that was not due to the allegedly false advertising.”
Wing Enters., Inc. v. Tricam Indus., Inc., 511 F. Supp. 3d 957,

974 (D. Minn. 2021); see also Fishman Transducers, Inc. v. Paul,
684 F.3d 187, 196 (1st Cir. 2012) (finding evidence of direct
competition would have sufficed to entitle plaintiff to
disgorgement); Tamko Roofing Prods., 282 F.3d at 37 (“once
plaintiff has shown direct competition and infringement, the
statute places the burden on the infringer to show the limits of
the direct competition”).
“[A] showing of direct competition requires a substantial
degree of equivalence and substitutability.” Fishman, 684 F.3d at
196. Willfulness “requires a conscious awareness of wrongdoing by
the defendants or at least conduct deemed ‘objectively reckless’
measured against standards of reckless behavior.” Id. at 191. It

“is a question of fact, which must be submitted to a jury.”
HipSaver, 497 F. Supp. 2d at 107 (citing Segrets, Inc. v. Gillman
Knitwear Co., 207 F.3d 56, 66 (1st Cir. 2000)).
Pegasystems may obtain disgorgement of Appian’s profits

without showing which of Appian’s sales were attributable to the
alleged false advertising. See 15 U.S.C. § 1117(a). Its expert
report is adequate to show that Appian has generated profits since
the publication of the BPM.com Report (an estimated $29.1 million).
Thus, Pegasystems may proceed to trial against Appian on its claim
for disgorgement of Appian’s profits.
d. Injunctive Relief
Appian argues that Pegasystems’ claim for injunctive relief
is moot because it removed the BPM.com Report from its website and
ceased distributing it once Pegasystems filed this lawsuit.
Pegasystems asserts that its claim for injunctive relief is not
moot under the voluntary cessation doctrine.

A defendant’s voluntary cessation of challenged conduct moots
a case where “subsequent events made it absolutely clear that the
allegedly wrongful behavior could not reasonably be expected to
recur.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC),
Inc., 528 U.S. 167, 189 (2000) (citation omitted).
It is uncontroverted that Appian has discontinued use of the
BPM.com Report since the onset of this litigation. Appian further
submitted a declaration from its Chief Marketing Officer attesting
that (1) Appian has instructed its personnel to discontinue use of
the BPM.com Report, and (2) Appian will not at any time in the
future resume use of the BPM.com Report. The Court concludes
Appian has ceased reposting the BPM.com Report on its website and

will not do so again. The issue is therefore moot.
2. Pegasystems’ Motion on Its Claims
Pegasystems moves for summary judgment on the issue of
liability (but not damages) for its own Lanham Act claim. As to
the element of falsity, Pegasystems argues that the BPM.com
Report’s claim that the average total cost of ownership of
Pegasystems’s products was more than ten times greater than that
of Appian’s products was literally false. Pegasystems takes aim
at the BPM.com Report’s methodology, but does not show the actual
cost to own its solutions as compared to Appian’s. Appian points
to internal Pegasystems emails in which Pegasystems employees
state that Pegasystems is much more expensive than Appian, and an

independent report concluding that Pegasystems is “relatively
expensive.” Dkt. 599-1 at 120-21. There is a genuine issue of
material fact on the question of whether the BPM.com Report’s claim
comparing the two companies’ TCOs was false. Pegasystems’ motion
is denied.
3. Pegasystems’ Motion on Appian’s Counterclaims
a. Timeliness of Appian’s Counterclaims
i. Laches
Pegasystems argues that Appian’s Lanham Act counterclaim is
barred by the equitable principle of laches. There is a strong
presumption that laches applies if the counterclaim was filed
outside of the analogous state limitations period—here, the four-

year period under Chapter 93A. See Pegasystems II, 463 F. Supp.
3d at 161. “The laches period starts to run when ‘the plaintiff
knew or should have known’ of the defendant’s wrongful conduct.”
Id. (citing Oriental Fin. Grp., Inc. v. Cooperativa de Ahorro y
Credito Oriental, 698 F.3d 9, 21 (1st Cir. 2012)). Where laches
presumptively applies, it additionally “requires proof of (1) lack
of diligence by the party against whom the defense is asserted,
and (2) prejudice to the party asserting the defense.” Oriental,
698 F.3d at 21. The burden of proving unreasonable delay and
prejudice is allocated to the party asserting laches where the
complaint is filed within the limitations period, and the burden
of proving their absence falls on the nonmoving party where the

complaint is filed outside of the limitations period. See In re
Bankvest Capital Corp., 375 F.3d 51, 61 (1st Cir. 2004).
Appian seeks to expand the limitations period for Chapter 93A
claims by arguing that it begins to run not when it knew or should
have known of Pegasystems’ alleged false advertising, but when it
knew that the advertising had caused it injury. Contrary to
Appian’s position, the laches period begins to run once it should
have known of Pegasystems’s wrongful conduct, which occurred when
it became aware of the allegedly false advertisements. See
Pegasystems II, 463 F. Supp. 3d at 161; Jarrow Formulas, Inc. v.
Nutrition Now, Inc., 304 F.3d 829, 837–38 (9th Cir. 2002) (“Laches
penalizes dilatory conduct; as such, the presumption is that a

§ 43(a) plaintiff is barred if he fails to file suit promptly when
the defendant commences the wrongful conduct.”). Moreover, laches
bars Lanham Act claims in the context of a continuing wrong. See
Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 821 (7th Cir.
1999); Jarrow, 304 F.3d at 837.
Appian filed its initial counterclaim concerning the Sinur
Paper on December 17, 2019, meaning laches presumptively applies
if it knew or should have known of its claims arising from the
Sinur Paper before December 17, 2015. Appian contends that there
is no evidence that it knew Pegasystems commissioned the Sinur
Paper until the commencement of this action. Yet in the spring of
2014, Appian employee Malcolm Ross drafted a rebuttal to the Sinur

Paper that stated that it was a “known fact” that the Sinur Paper
“was paid for by Pegasystems without input from Appian.” Dkt.
599-1 at 81. It stated in other places that Pegasystems
commissioned the Sinur Paper. Thus, Appian at least should have
known by the spring of 2014 that it had a potential Lanham Act
claim against Pegasystems.
Appian filed its amended counterclaim concerning the
remaining Pegasystems Marketing Materials on June 17, 2021, so
laches presumptively applies if it knew or should have known of
its claims arising from those documents before June 17, 2017.
Pegasystems concedes that there is no evidence showing when Appian
learned of the specific Pegasystems Marketing Materials other than
the Sinur Paper. See Reply, Dkt. 621 at 10. Pegasystems instead

submits evidence that Appian was aware that Pegasystems was
generally attacking Appian’s ability to scale at presentations and
in marketing materials as early as 2013. See id. But the Lanham
Act regulates specific instances of commercial advertising, and
here, that means that Pegasystems must show when Appian learned of
each of the Pegasystems Marketing Materials. Accordingly, Appian
bears the burden to show reasonable diligence and lack of prejudice
as to its Lanham Act claims arising from the Sinur Paper, while
Pegasystems must show unreasonable delay and prejudice as to
Appian’s claims arising from the remaining Pegasystems Marketing
Materials.

Appian has not shown that its delay in suing over the Sinur
Paper was reasonable or that Pegasystems was unharmed by the delay.
It has not meaningfully attempted to explain why it did not bring
suit until 2019 despite being aware of the Sinur Paper in 2014.
Thus, its delay was unreasonable for laches purposes. Similarly,
Appian has not produced evidence demonstrating a lack of prejudice
to Pegasystems. For example, Pegasystems continued to promote the
Sinur Paper without any notice that Appian was challenging its
truthfulness. Similarly, Pegasystems lost certain emails, some of
which may have been on point, in a 2017 system upgrade. Laches
therefore applies, and summary judgment will enter for Pegasystems
on Appian’s Lanham Act counterclaim arising from the Sinur Paper.

On the other hand, Pegasystems has not proven unreasonable
delay or prejudice as to Appian’s Lanham Act counterclaim arising
from the remaining Pegasystems Marketing Materials. Pegasystems’
core argument on unreasonable delay—that Appian chose to respond
to the objectionable marketing materials in the marketplace and
cannot now file suit—applies only to the Sinur Paper. Pegasystems
has not produced evidence showing when Appian became aware of the
additional Pegasystems Marketing Materials, so there is no
evidence of unreasonable delay. Laches does not apply to Appian’s
counterclaims arising from the Pegasystems Marketing Materials
other than the Sinur Paper.
ii. Statute of Limitations

Pegasystems raises a statute of limitations defense to
Appian’s Chapter 93A and commercial disparagement counterclaims
that the Court finds persuasive only as to Appian’s Sinur Paper
claims. The limitations period for the Chapter 93A counterclaim
is four years and for the commercial disparagement counterclaim is
three years. See Pegasystems II, 463 F. Supp. 3d at 162. For the
limitations period to begin to run for tort claims, a plaintiff
must have “enough information to suggest that he has suffered an
injury caused by the defendant’s conduct,” which is an “inquiry
notice” standard. Wolinetz v. Berkshire Life Ins. Co., 361 F.3d
44, 48 (1st Cir. 2004). A reasonable plaintiff in Appian’s
position would have been on inquiry notice that it had suffered an

injury from the Sinur Paper in early 2014. Thus, Appian’s state
law counterclaims arising from the Sinur Paper alone are time
barred.
b. Merits of Appian’s Counterclaims
i. Lanham Act and Chapter 93A Counterclaims
Pegasystems argues that Appian’s Lanham Act and Chapter 93A
counterclaims arising from the remaining Pegasystems Marketing
Materials fail on the merits because they are not commercial
advertising and on the grounds of injury, materiality, and falsity.
To qualify as commercial advertising, a representation must:
(a) constitute commercial speech (b) made with the
intent of influencing potential customers to purchase
the speaker’s goods or services (c) by a speaker who is
a competitor of the plaintiff in some line of trade or
commerce and (d) disseminated to the consuming public in
such a way as to constitute “advertising” or
“promotion.”
Podiatrist Ass’n, Inc. v. La Cruz Azul De. P.R., Inc., 332 F.3d 6,
19 (1st Cir. 2003).
Pegasystems contests the fourth element: that the Pegasystems
Marketing Materials did not reach enough customers to constitute
commercial advertising. While there is no magic number of
customers that an advertisement must reach, “the touchstone of
whether a defendant’s actions may be considered ‘commercial
advertising or promotion’ under the Lanham Act is that the
contested representations are part of an organized campaign to
penetrate the relevant market.” Fashion Boutique of Short Hills,

Inc. v. Fendi USA, Inc., 314 F.3d 48, 57 (2d Cir. 2002).
It is undisputed that the BPM market is large, with over
twenty vendors competing for business from a wide array of large
corporations and government agencies. The evidence before the
Court shows that Pegasystems distributed the Scalability White
Paper 6 times to 5 organizations, and the Technical Competitive
Brief 30 times to 15 organizations. There is no evidence of
distribution of the Competitive Comparison Chart or the Technology
Assessment. Further, Appian does not argue that the Scalability
Slide Deck, the Pega 7 v. Appian Comparison, the Competitive
Comparison Chart, or the Technology Assessment were commercial
advertising. As to the Scalability White Paper and Technical

Competitive Brief, Appian relies on the degree to which Pegasystems
circulated both documents internally, noting that Pegasystems
executives gave them to their sales force and encouraged
salespersons to use them with customers. A reasonable jury could
conclude that the Scalability White Paper and the Technical
Competitive Brief alone were commercial advertising. Summary
judgment must enter for Pegasystems on Appian’s Lanham Act and
Chapter 93A counterclaims with respect to all other marketing
materials.
Pegasystems’ remaining arguments for summary judgment on
Appian’s Lanham Act and Chapter 93A counterclaims are unavailing.
As to injury, Pegasystems’ statement that the BPM sales process is

so lengthy and complex that the Pegasystems Marketing Materials
could not have influenced purchaser decisions is conclusory.
Appian, however, points to seven customers that it claims to have
lost at least in part because of Pegasystems’ conduct, which its
expert states cost Appian $26 million in lost profits. For
example, in 2012, Pegasystems provided potential customer Rabobank
with both the Technical Competitive Brief and the Scalability White
Paper. When Rabobank chose Pegasystems over Appian, it informed
Appian that Rabobank needed a platform that could perform “on
enterprise architecture level,” which mimics the Technical
Competitive Brief’s criticism of Appian’s inability to handle the
“needs of an enterprise BPM program.” Dkt. 599-1 at 255–56. A

reasonable factfinder could infer that Rabobank, along with the
other six companies that represent similar examples, chose
Pegasystems at least in part because of the Pegasystems Marketing
Materials. There is a genuine issue of material fact on the issue
of injury.
“[M]ateriality is generally a question of fact.” Pegasystems
II, 463 F. Supp. 3d at 161 (quoting LivePerson, Inc. v. 24/7
Customer, Inc., 83 F. Supp. 3d 501, 518 (S.D.N.Y. 2015)). A
statement is material if it is likely to influence a customer’s
purchasing decision, which can be established by “showing that the
false or misleading statement relates to an inherent quality or
characteristic of the product.” See Cashmere, 284 F.3d at 311–12

(cleaned up). Pegasystems does not point to any evidence that the
statements about Appian’s ability to scale contained in the
Pegasystems Marketing Materials were immaterial. Moreover, as
Appian points out, one of Pegasystems’ own employees testified
that scalability is “one of the things that you would need to be
able to show to compete for business.” Dkt. 599-1 at 208. Appian’s
expert also submits that scalability is an essential factor in the
decision-making processes of potential purchasers. There is a
genuine issue of material fact on the question of materiality.
There is also a triable issue regarding the falsity of the
Pegasystems Marketing Materials. Pegasystems does not claim that
the challenged statements were true, but rather tries to show that

they were vague or open to interpretation and therefore not
literally false. Yet a statement, like that in the Technical
Competitive Brief, that Appian “lacks key capabilities needed to
scale” is unambiguous. Pegasystems contends that its statements
that Appian’s total cost of ownership is “higher” cannot be
literally false because “[h]igher than what is not specified.”
Dkt. 574-1 at 27. But any reasonable reader would understand the
documents to compare the TCOs of Appian and Pegaystems. Moreover,
the statements of Pegasystems employees suggesting that they knew
their claims about Appian’s scalability were made up are probative
of falsity. See, e.g., Dkt. 599-1 at 211–13 (“[w]hat we have
stated about [Appian’s] scalability does not seem to jive with the

Appian documentation.”). A reasonable jury could conclude that
Pegasystems made false statements about Appian.
ii. Commercial Disparagement Counterclaim
Pegasystems challenges Appian’s commercial disparagement
counterclaim on three grounds: lack of injury, lack of falsity,
and lack of actual malice. As discussed above, Pegasystems has
failed to establish a lack of injury or falsity. There is also a
triable issue regarding actual malice, which requires Appian to
show that Pegasystems “ha[d] knowledge of a statement’s falsity or
act[ed] with reckless disregard of its truth or falsity.”
Pegasystems I, 424 F. Supp. 3d at 226. The record contains
evidence from which a jury could decide that Pegasystems knew it

was making false statements about Appian. As noted, certain
Pegasystems employees made statements suggesting that they knew
their claims about Appian’s scalability were fabricated. The Court
denies Pegasystems’s motion for summary judgment on Appian’s
commercial disparagement counterclaim, with the exception of
claims arising from the Sinur Paper.
iii. Defamation Counterclaim
Appian brings a defamation counterclaim based on the LinkedIn
Post, which implied that the Court’s opinion in Pegasystems I
supported the notion that Appian had told “blatant lies” in the
BPM.com Report. Appian must prove that (1) Pegasystems made a
statement concerning Appian to a third party; (2) the statement

“could damage Appian’s reputation in the community”; (3)
Pegasystems was “at fault” in making the statement, meaning that
it acted negligently if Appian is a private actor or with actual
malice if Appian is a public figure; and (4) the statement caused
Appian economic loss, or was actionable without proof of economic
loss, for example a statement that may prejudice Appian’s business.
Ravnikar v. Bogojavlensky, 782 N.E.2d 508, 510–11 (Mass. 2003).
The First Amendment imposes a number of constraints on a plaintiff
who seeks relief from defamation. See Sindi v. El-Moslimany, 896
F.3d 1, 14 (1st Cir. 2018) (finding that rhetorical hyperbole are
not actionable). An undamaged person may recover nominal damages.
See Ravnikar, 782 N.E.2d at 509.

Pegasystems first argues that the LinkedIn Post is protected
by its First Amendment right to publicly comment on judicial
proceedings. However, false commercial speech is not entitled to
First Amendment protection. See Ibanez v. Fla. Dep’t of Bus. &
Prof’l Regul., Bd. of Accountancy, 512 U.S. 136, 142 (1994). A
jury could reasonably find that the LinkedIn Post was commercial
speech, as it encourages readers to review an article about the
Court’s opinion if they are “thinking about Appian” and Pegasystems
urged its sales force to share the post.
Second, Pegasystems argues that the LinkedIn Post is
protected by the “fair reporting” privilege. A report on court
proceedings is privileged if it “conveys to the persons who read

it a substantially correct account of the proceedings” and does
not “omit or misplace facts or make additions that ‘convey an
erroneous impression to those who hear or read it.’” Howell v.
Enter. Publ’g Co., LLC, 920 N.E.2d 1, 21 (Mass. 2010) (quoting
Restatement (Second) of Torts § 611 cmt. F (Am. L. Inst. 1977)).
Here, a jury could find that the LinkedIn Post creates the mistaken
impression that the Court found that Appian told “blatant lies.”
Third, Pegasystems argues that everything in the LinkedIn
Post is true. This Court previously found that “accusing another
party of being a ‘liar’ has generally been held to be defamatory”
and “[a]lthough the LinkedIn Post ostensibly relied on this Court’s
prior opinion regarding Pegasystems’ claims against Appian, that

opinion does not support the statement that Appian told ‘blatant
lies.’” Pegasystems II, 463 F. Supp. 3d at 163 (citing Milkovich
v. Lorain Journal Co., 497 U.S. 1, 18-19 (1990)). While
Pegasystems can point to aspects of the LinkedIn Post that are
true, there are also elements that a jury could find are false.
Fourth, Pegasystems asserts that there is no evidence of
actual malice. The actual malice standard applies only to
defamation claims brought by public figures, who are people who
achieve “pervasive fame or notoriety” or those who “voluntarily
inject[] [themselves] or [are] drawn into a particular public
controversy and thereby become[] a public figure for a limited
range of issues.” Lluberes v. Uncommon Prods., LLC, 663 F.3d 6,

13 (1st Cir. 2011). A public controversy “must be more than a
cause célèbre or a matter that attracts public attention.” Id.
(cleaned up). Further, “it must be shown that persons actually
were discussing some specific question and a reasonable person
would have expected persons beyond the immediate participants in
the dispute to feel the impact of its resolution.” Id. Under
that standard, Appian is not a public figure. There is no reason
to think that the Appian-Pegasystems dispute attracted public
attention. The actual malice standard does not apply, and there
is a genuine issue of material fact on Appian’s defamation
counterclaim.
ORDER

For the foregoing reasons, Defendants’ motions for summary
judgment (Dkt. 570; Dkt. 583) are ALLOWED IN PART and DENIED IN
PART. Pegasystems’ motion for partial summary judgment on its
claims (Dkt. 573) is DENIED. Pegasystems’ motion for summary
judgment on Appian’s counterclaims (Dkt. 573) is ALLOWED IN PART
and DENIED IN PART. At trial, Pegasystems may seek disgorgement,
but not monetary damages or injunctive relief. Appian may present
its Lanham Act and Chapter 93A counterclaims arising from the
Scalability White Paper and the Technical Competitive Brief, its
commercial disparagement counterclaim arising from all of the
Pegasystems Marketing Materials except for the Sinur Paper, and
its defamation counterclaim. The parties shall submit briefs

within fourteen days of entry of this Order on whether any viable
claims against Business Process Management, Inc. survive in light
of this opinion.
SO ORDERED.
/s/ PATTI B. SARIS
Hon. Patti B. Saris
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10200566. Public record. Not legal advice.