Welcome to the inaugural edition of Debevoise’s Trade Secrets Spotlight, our monthly newsletter highlighting three significant developments in trade secret law. Each issue will distill decisions of practical importance to companies navigating trade secret risks and disputes. Please contact any member of our trade secrets team with questions.
1. Comet Technologies USA, Inc. v. XP Power, LLC—plaintiffs bear the burden on ready ascertainability under the DTSA
The Ninth Circuit reversed a $40 million verdict after the jury was incorrectly instructed that the defendant had to prove the alleged secrets were readily ascertainable.
Under the Defend Trade Secrets Act, the plaintiff must establish that the alleged trade secrets derive value from being neither generally known nor “readily ascertainable through proper means.” In contrast, under the California Uniform Trade Secret Act (“CUTSA”), the defendant bears the burden of proving, as an affirmative defense, that the information was “readily ascertainable by proper means at the time of the alleged” misappropriation.
Before trial, Comet, the plaintiff, dropped its CUTSA claim and proceeded on its DTSA claim. The district court, however, instructed the jury that ready ascertainability was an affirmative defense and assigned defendant XP Power the burden of proof. The Ninth Circuit held that this erroneous instruction was not harmless error because it “flipped the burden of proof on lack of ready ascertainability” and Comet’s reliance on this error would “effectively rewrite the DTSA.” The court therefore vacated the verdict, permanent injunction, and more than $17 million in attorney’s fees and ordered a new trial.
This case highlights the differences between state trade secret acts and the DTSA. These differences are not only important at trial, but also should be considered before litigation begins, and when parties are drafting agreements that include, for example, choice of law provisions.
2. dmarcian, Inc. v. DMARC Advisor BV—Fourth Circuit confirms the DTSA’s extraterritorial reach
The Fourth Circuit held that the DTSA reaches foreign misappropriation when the defendant commits an act in furtherance of the offense in the United States.
A Dutch software company argued that under the framework announced by the U.S. Supreme Court in Abitron, which held that the Lanham Act does not apply extraterritorially absent an infringing “use in commerce” occurring inside the United States, the company’s activities were beyond the reach of U.S. law. The Fourth Circuit disagreed. The court held that 18 U.S.C. § 1837 expressly “rebut[s] the presumption against extraterritoriality” and gives the DTSA a “global” reach, subject to the statutory requirement of a domestic “act in furtherance of the misappropriation.” The court emphasized, “[i]n the modern world, intellectual property theft often cannot be confined to a single sovereign.”
The court ultimately found the domestic act requirement satisfied where defendant DMARC Advisor BV had obtained access to trade-secret data stored on U.S. servers, exceeded the parties’ authorized-use arrangement, used the information in competing software, and targeted U.S. customers. It therefore affirmed the preliminary injunction. This decision joins several other circuit decisions in recent years recognizing the DTSA’s extraterritorial reach, including the Seventh Circuit’s decision in Motorola Solutions v. Hytera Communications (2024).
3. Wilbur-Ellis Co. v. Gompert—overbroad trade-secret descriptions can result in summary judgment for defendant
The Eighth Circuit affirmed summary judgment where the plaintiff described broad categories of business information but failed to identify the specific secrets or acts of misappropriation.
Plaintiff Wilbur-Ellis identified categories such as business strategy, customer information, pricing, and rebate data as its alleged trade secrets. The Eighth Circuit agreed with the lower court that these descriptions did not adequately identify what particular information was secret, which defendant allegedly took it, or how it was improperly acquired or used. “Wilbur-Ellis’s reliance on broad terms, general descriptions, non-specific references,” the district court concluded and the Eighth Circuit agreed, “do not suffice.” Further, general allegations of a suspicious events surrounding the employees’ simultaneous departure did not adequately “explain how these events were connected to any specific trade secret.” This decision, like recent decisions from the Federal Circuit including Coda Development v. Goodyear (2025), underscores that a trade secret plaintiff’s failure to articulate its alleged trade secrets with specificity can be fatal to the claim.
This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.