Insight
Comet v. XP Power and the Burden on Ascertainability
Under the federal trade secret statute, the plaintiff must prove its information was not readily ascertainable. A jury instruction that said otherwise cost the plaintiff its verdict.
Law checked through
On July 14, 2026, the Ninth Circuit decided Comet Technologies USA, Inc. v. XP Power, LLC. The court vacated the district court’s amended final judgment in its entirety, including $20 million in compensatory damages, $20 million in punitive damages, a permanent injunction and more than $17 million in fees, because the district court instructed the jury that the defendant bore the burden of proving the information was readily ascertainable. Under the Defend Trade Secrets Act (DTSA), 18 U.S.C. § 1839(3)(B), the court held, that burden belongs to the plaintiff as part of proving a trade secret exists. The court remanded for a new trial on liability and damages for the three trade secrets the jury found misappropriated. The unchallenged findings remain undisturbed: the jury’s verdict that XP did not misappropriate Trade Secret S, and the grant of judgment as a matter of law for XP on Trade Secret T.
Comet is a DTSA burden-of-proof case, not an AI case. It did not find that an AI tool made a secret readily ascertainable. In an AI reconstruction dispute, the party advancing that theory needs evidence of lawful inputs, reproducibility and the effort required. The opinion does not supply that evidence or establish that every AI-surfaceable fact is public.
The Ninth Circuit decision is persuasive, not binding, in Texas, and it is not an AI case; it concerned radio-frequency components for semiconductor manufacturing. It addresses the DTSA definition and jury instruction; it does not decide the allocation of every Texas Uniform Trade Secrets Act (TUTSA) issue. The DTSA and TUTSA definitions use the same operative test: information derives independent economic value from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from its disclosure or use (18 U.S.C. § 1839(3)(B); Civil Practice and Remedies Code § 134A.002(6)(B)). Because TUTSA places non-ascertainability inside the trade-secret definition, a Texas claimant proving that a trade secret existed must address that definitional element. The Fifth Circuit has applied that test alongside TUTSA in a preliminary-injunction setting: in CAE Integrated, L.L.C. v. Moov Technologies, Inc., No. 22-50034 (5th Cir. Aug. 9, 2022), the court affirmed the denial of a preliminary injunction where customer information in a closed industry was not shown to be a trade secret and the claimant had not shown a likelihood of success on the merits. That decision reviewed preliminary-injunction proof, not a jury instruction, so it does not answer Comet’s burden-allocation question. Texas claimants should distinguish statutory elements, the information identified and the circuit whose law governs.
Sources
- Comet Technologies USA v. XP Power
- Federal Trade Secret Definitions
- Texas Uniform Trade Secrets Act
- CAE Integrated, L.L.C. v. Moov Technologies, Inc.