Insurance software giant wins preliminary injunction after competitor allegedly created fake agency to access its platform
February 13th, 2026: Court Grants Preliminary InjunctionNew here? Follow stories to track developments over time. Create a free account to get updates when stories you care about change.
Applied Systems, the dominant provider of insurance agency management software, has won a key legal battle against upstart competitor Comulate. A federal judge found that Comulate likely violated its contract by creating a fake insurance agency—PBC Consulting—to gain unauthorized access to Applied's Epic platform for 19 months, conducting product demonstrations and improving its own integration software.
The preliminary injunction marks a significant turn in an increasingly bitter dispute. Comulate, founded in 2022, has fired back with antitrust claims, alleging Applied launched a coordinated campaign to destroy a competitor it couldn't acquire. Applied tried to buy Comulate three times between 2023 and 2025; each time, the founders refused. Now both companies are fighting in federal court over whether this is a legitimate trade secrets case or an attempt by a market leader to crush an innovative rival.
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Fictional AI pastiche — not real quote.
"How touching—a titan of insurance software, rebuffed three times like a persistent suitor at a garden party, suddenly discovers its virtue has been compromised. One might almost believe Applied's wounded dignity if monopolists weren't always so shocked to find that locked doors inspire the picking of locks."
Fictional AI pastiche — not real quote.
"A monopolist who cannot acquire his rival resorts to the courts—the strategy is as old as commerce itself. I observe that the marketplace has its own mechanisms for determining winners, yet some prefer the expensive machinery of litigation to the simple discipline of competition. Three refused offers suggest either extraordinary conviction or extraordinary folly; the court's verdict on subterfuge may now determine which."
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Provider of the insurance industry's most widely used agency management software, serving mid-size and enterprise independent agencies worldwide.
AI-powered insurance accounting automation platform that integrates with agency management systems to automate financial reconciliation.
Judge Manish Shah grants Applied's motion for preliminary injunction, finding Comulate likely violated its contract through the fake agency scheme.
Comulate files Sherman Act antitrust claim in federal court, alleging Applied weaponized litigation to destroy a competitor it couldn't acquire.
Delaware court denies Comulate's request for a temporary restraining order but allows Epic integration for joint customers through Q2 2026.
Comulate files lawsuit in Delaware Court of Chancery seeking injunctive relief and damages against Applied Systems.
Applied Systems sues Comulate and PBC Consulting in U.S. District Court for the Northern District of Illinois, alleging trade secret misappropriation.
Comulate closes Series B funding led by BOND and Workday Ventures, valuing the rapid-growth startup's expansion plans.
According to Applied's lawsuit, Comulate creates PBC Consulting, a fake California insurance agency, to gain access to Applied's Epic platform.
Applied Systems attempts to acquire Comulate. The founders refuse the offer.
Jordan Katz and Michael Mattheakis launch Comulate to automate insurance accounting workflows using AI.
Discussed by: Insurance industry analysts and trade secrets litigation experts
If the court finds Comulate willfully misappropriated trade secrets, damages could be substantial. The Defend Trade Secrets Act allows for treble damages in cases of willful misappropriation. Given the preliminary injunction findings, Applied has demonstrated likelihood of success on the merits. A verdict could force Comulate to pay significant damages and potentially rebuild its integration technology from scratch.
Discussed by: Cohen Milstein attorneys representing Comulate; antitrust legal commentators
Comulate's Sherman Act claims could expose Applied to antitrust liability if courts find the trade secrets lawsuit was a pretextual attack on competition. The pattern of failed acquisition attempts followed by litigation against a fast-growing rival echoes other tech antitrust disputes. If Comulate can demonstrate that Applied's customer threats and litigation strategy constitute anticompetitive conduct, the power dynamic could shift dramatically.
Discussed by: Insurance industry trade publications; litigation finance analysts
Both companies face significant legal costs and business disruption from prolonged litigation. Applied may prefer settlement to avoid antitrust discovery that could expose internal communications about competitive strategy. Comulate may accept resolution to preserve customer relationships and focus on growth. A settlement could include licensing arrangements, conduct restrictions, or financial terms that allow both companies to declare partial victory.
Discussed by: Insurtech investors and startup advisors
The litigation could drain Comulate's resources despite its Series B funding, making the company more vulnerable to acquisition or forcing a strategic exit. If customer relationships suffer from Applied's alleged pressure campaign, Comulate may struggle to maintain its growth trajectory. A larger technology company or private equity firm could see opportunity in acquiring Comulate's technology and team at a distressed valuation.
Appian accused competitor Pegasystems of stealing trade secrets through 'Project Crush,' a scheme where a contractor used bogus credentials to access Appian's software. A Virginia jury awarded Appian $2.036 billion—the largest verdict in state history—after finding willful and malicious misappropriation.
The massive verdict sent shockwaves through the enterprise software industry and put competitors on notice about unauthorized access tactics.
Virginia's appeals court overturned the verdict in 2024, finding errors in jury instructions and evidence handling. The case was remanded for retrial, demonstrating how difficult it is to sustain large trade secrets damages on appeal.
Both cases involve competitors allegedly using deceptive access methods to study rival software. The Appian appeal outcome suggests Applied may face challenges proving damages even if it establishes misappropriation liability.
Oracle sued SAP after SAP's subsidiary TomorrowNow downloaded thousands of copyrighted Oracle documents and programs through Oracle's customer support website. SAP admitted liability, and a jury awarded Oracle $1.3 billion in damages.
The judge vacated the jury verdict as excessive and offered Oracle a choice between a new trial or accepting $272 million.
After years of appeals, SAP paid $356.7 million plus interest and Oracle's legal fees. The case established that unauthorized access to competitor systems through customer channels carries serious legal consequences, but damages are difficult to quantify.
Like the Applied-Comulate dispute, Oracle-SAP involved a larger incumbent accusing a competitor of improperly accessing its platform. The settlement after years of litigation suggests even strong cases often end in negotiated resolution rather than trial victory.