Comet Technologies USA Inc. v. EXP Power LLC

Case Name: Comet Technologies USA Inc. v. EXP Power LLC

Type of Case: Trade Secrets Missapropriation

Court: Northern District

Judge(s): Judge Nathanael M. Cousins

Plaintiff Lawyers: Kirkland & Ellis LLP, Adam R. Alper, Michael W. De Vries, Sharre S. Lotfollahi, Akshay S. Deoras, Leslie M. Schmidt, Kat Li, Sam Blake, Kyle Calhoun, Christian Erwin, Sarah Mikosz, Hannah Suh

Defense Lawyers: Latham & Watkins LLP, Joseph B. Farrell, Patricia Young, Thomas W. Yeh, Blake R. Davis

Defense witnesses made more than a few telling admissions from the stand during the two-week trade secrets trial between a pair of companies competing to develop some of the technology that will be critical for next-generation semiconductor manufacturing.

The plaintiff, Swiss-based Comet Technology, claimed that XP Power had hired away three engineers who intentionally brought with them thousands of highly technical documents, code and other proprietary trade secrets, according to Adam R. Alper, one of Comet's attorneys. Comet Technologies USA Inc. v. XP Power LLC, 5:20-cv-06408 (N.D. Cal., filed Sept. 11, 2020).

For instance, there was the time when partner Michael W. De Vries asked the defendant's CEO why the company hadn't fired one of the allegedly larcenous engineers. The CEO, who is British, replied, "We were afraid he was going to turn queen's evidence."

Michael De Vries

Asked for an explanation, the CEO said the company worried that if they fired the engineer, he would go back to Comet and tell his old colleagues that he and XP had done something wrong, De Vries said.

The Kirkland team also had obtained a recording that an XP executive had made of an early interview with some Comet engineers. In the recording, one of the engineers said that if XP wanted a "turnkey" design of a crucial component, they could bring it over.

"As you can imagine, that's something that we played at trial repeatedly," De Vries said.

The plaintiffs' team also put on computer forensic experts who traced the movement of Comet files to XP employees' devices and linked them to the projects those employees were working on at that time.

With that and other evidence, the Kirkland team were able to obtain admissions from several defense witnesses that they knew about the willful acts of their employees and were responsible for them, Alper said.

But the most startling admission came when Alper got the defense expert on liability to admit that the defendant was indeed liable. "Which is not a joke or an overstatement," De Vries said. "Literally, that's what happened."

Alper said he led the expert through evidence showing that engineers had gone to XP from Comet with substantial amounts of proprietary data. "He started providing admissions along those lines," Alper said until, finally, the expert agreed with the statement that XP should be liable for the acts of its employees.

"He was a little bit off kilter at that point, so we were able to continue pressing on that [and] got him to admit a few additional things," Alper said.

"The other side then got up and tried to tell the jury on a redirect that they shouldn't listen to him."

XP's lead attorney, Joseph Farrell did not respond to a request to comment on the case.

The jury awarded Comet $40 million, including $20 million in punitive damages. Several months later, the judge granted a permanent injunction that prevents XP from using Comet's technology to make competing products. Post-trial motions are pending.

-- Don DeBenedictis