9th Circ. Ruling Exposes A Flaw In Federal Trade Secrets Law

By Dylan Wiseman and Brian Weikel – Law360, August 12, 2026

On July 14, the U.S. Court of Appeals for the Ninth Circuit addressed the difference between the statutory definition of trade secrets under the federal Defend Trade Secrets Act and California’s Uniform Trade Secrets Act in Comet Technologies USA Inc. v. XP Power LLC.

In doing so, the Ninth Circuit reversed a $40 million jury verdict and $17 million in attorney fees because the trial court misapplied the burden of proof on a central element of the plaintiff’s DTSA claim.

Specifically, the Ninth Circuit found the trial court incorrectly instructed the jury that the defendant, and not the plaintiff, had the burden to establish a prima facie element of the definition of a trade secret. In doing so, the Ninth Circuit exposed a major problem with the DTSA.

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