July 24, 2026 — Ayr Energy Inc., a California-based
maker of custom power transformers, has filed counterclaims in the United
States against Zetwerk Manufacturing Businesses Pvt Ltd and three affiliated
entities, alleging trade secret theft and trademark misuse, and seeking damages
of at least $1 billion along with an import ban on certain transformers.
Zetwerk has rejected the allegations.
The escalation lands at a sensitive moment for
Zetwerk, which received clearance from the Securities and Exchange Board of
India this month for a proposed initial public offering. Litigation disclosures
involving a company's overseas operations are typically scrutinised by
investors ahead of a listing.
What has been filed, and where
According to accounts published by Business
Standard, Inc42 and Outlook Business, Ayr Energy has moved on two fronts.
Before the US International Trade Commission, it has asked the commission to
open an investigation and issue a limited exclusion order barring the
transformers named in the complaint from entering the United States, along with
cease-and-desist orders covering their marketing, sale, and distribution.
Separately, in the Texas Business Court, Ayr
is seeking monetary damages of no less than $1 billion, plus exemplary damages,
disgorgement of profits, corrective advertising, and injunctive relief.
The filings name Zetwerk Manufacturing
Businesses Pvt Ltd, Zetwerk Manufacturing USA Inc., Unimacts Global LLC, and
KRYFS Power Components Ltd as respondents.
The allegations, and the denial
Ayr's filings allege that Zetwerk placed an
individual at the startup under false pretences, that this person accessed
confidential material relating to Ayr's transformer business without
authorisation, and that the person left after roughly six weeks before joining
Zetwerk to head a new transformer line. The filings further allege that Zetwerk
subsequently marketed custom transformer capabilities it had not previously
held, and ran online advertising that used the Ayr Energy name.
The claims listed include trade secret
misappropriation, false advertising, trademark infringement, fraud, civil
conspiracy, and unfair competition. None of the allegations has been tested in
court.
Zetwerk has disputed them. In a statement to
Outlook Business, the company said Ayr's complaint followed the withdrawal of
an earlier Ayr claim in California that had gained no traction, and
characterised the new action as a response to litigation Zetwerk had already
brought. "We will prove these allegations in court," the company
said.
A dispute that began in 2025
The Texas proceedings between the parties have
been ongoing since October 2025, when Zetwerk Manufacturing USA and Unimacts
Global sued Ayr Energy and its founder, Anirudh Reddy Edla, a former Zetwerk
executive, in Texas, seeking $100 million in damages.
That petition alleged that Edla incorporated
Ayr while still employed at Zetwerk, that Ayr recruited former Zetwerk and
Unimacts staff, and that it drew on confidential information to win contracted
orders. Ayr's attempt to have that case dismissed was rejected, according to
Zetwerk. Ayr has not accepted those characterisations.
Why it matters
Both companies compete in the US market for
grid and data-centre power equipment, where transformer lead times have
tightened sharply. An ITC exclusion order, if granted, would restrict US entry
of the products named — a commercial consequence that does not depend on the
Texas damages claim succeeding.
Zetwerk, founded in 2018, has raised more than
$700 million from investors including Peak XV Partners, Lightspeed, Accel,
Khosla Ventures, and Baillie Gifford. Ayr Energy was founded in 2024.
Neither the ITC investigation nor the Texas
proceedings has reached a determination. The story is developing.
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