Protecting Verdict From Streamlined Case

In Comet Technologies v. XP Power, Comet strategically chose to streamline its trial to prove a trade secret claim under the federal Defend Trade Secret Act (DTSA) and dropped its claims under the California Uniform Trade Secret Act (CUTSA). As the case went to the jury, the court instructed the jury that it was the defendant's burden to prove the trade secrets were not readily ascertainable. 

The 9th Circuit ruled in its recent opinion that this instruction was in error because, under the DTSA, it is the plaintiff's burden to prove that trade secrets are not readily ascertainable, whereas, under the state-court claim, that burden falls to the defendant. 

Thus, this decision serves as a good reminder that, as parties streamline their cases for trial, they have to be extra vigilant to ensure that the jury instructions conform with the requirements for proving a claim. Otherwise, a hard-fought victory could be set aside and reversed like it was in the Comet case. 

Comet initially brought claims under both the federal Defend Trade Secrets Act and California's trade secret law, but it dropped the state claims during trial to streamline the case. That change proved consequential because the California claims placed the burden on XP to prove that the trade secrets were readily ascertainable, while the DTSA requires the plaintiff to establish that its claimed secrets could not be readily ascertained through proper means. XP asked the trial court to revise the instruction after the state claims were dismissed, but it left it unchanged.

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