9th Cir.

Comet Technologies USA, Inc. v. XP Power, LLC

July 14, 2026 ·23-15709 ·Published ·David F. Hamilton · By Aisha Johnson

The Ninth Circuit reversed a jury verdict in a trade secret misappropriation case due to an erroneous jury instruction on the burden of proof. The court held that the district court incorrectly placed the burden on the defendant to prove that trade secrets were readily ascertainable, rather than on the plaintiff to prove they were not.

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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.