Background
Comet Technologies sued XP Power for misappropriating trade secrets under the federal Defend Trade Secrets Act. A jury found for Comet, awarding forty million dollars in damages and a permanent injunction. The district court instructed the jury that XP bore the burden of proving the trade secrets were readily ascertainable, an error that occurred after Comet dropped its state law claims.
The court’s reasoning
The panel held that the district court erred by instructing the jury that XP bore the burden of disproving that its trade secrets were not readily ascertainable. The Defend Trade Secrets Act requires the plaintiff to prove this element. The court found the error was not harmless because the jury heard conflicting evidence on ready ascertainability, and the damages calculation was intertwined with the disputed issues.
The dissent
What it means going forward
The case is remanded for a new trial on liability and damages. The ruling clarifies that under the federal Defend Trade Secrets Act, the plaintiff must prove that trade secrets were not readily ascertainable by proper means.