By Mike Scarcella

WASHINGTON, July 14 (Reuters) - A U.S. federal appeals court on Tuesday overturned a $40 million jury verdict for technology company Comet Technologies and an award of more than $17 million in legal fees in a lawsuit accusing chip industry rival XP Power of stealing trade secrets.

Here are the details:

• A three-judge panel of the San Francisco-based 9th U.S. Circuit Court of Appeals ordered a new trial in the trade secrets lawsuit that Comet filed in 2020 against XP. The companies manufacture components used in making computer chips.

• Comet, represented by law firm Kirkland & Ellis, prevailed at trial in 2020 on some of its claims that XP stole trade secrets when three employees joined the company from Comet. XP, represented by Latham & Watkins, has denied any wrongdoing. The $40 million verdict included $20 million in punitive damages.

• The appeals court, in a divided 2-1 order, said the federal judge who presided over the trial wrongly informed the jury that XP had a burden to disprove a key part of Comet’s allegations. “XP did not invite the error, and Comet has not convinced us that the error was harmless,” Circuit Judge David Hamilton wrote.

• In a dissent, Circuit Judge Patrick Bumatay said the trial court’s instruction was incorrect but the jury was likely to reach the same verdict even if it had been instructed properly.

• After the trial, Kirkland sought and was awarded compensation for the work of 18 attorneys who said they spent more than 15,400 hours on the case for Comet.

• Lawyers for Comet and XP did not immediately respond to requests for comment about the appeals court order.