Split CAFC Issues Precedential Decision on Trade Secret Statute of Limitations Standard

Insulet sued EOFlow and its CEO and major stockholder over alleged misappropriation of trade secrets related to Insulet’s Omnipod wearable insulin patch pump and EOFlow’s EOPatch 2. The alleged misappropriation occurred after EOFlow hired former Insulet employees to develop and commercialize the EOPatch 2. A jury found four trade secrets were misappropriated and awarded damages, later reduced by the district court. The Federal Circuit reversed, holding the statute of limitations for a claim under the Defend Trade Secrets Act had expired. The reversal eliminated the damages award and the associated judgment, with a dissent from Judge Prost.

"The relevant question is ultimately whether Insulet had sufficient knowledge to state a claim for trade secret misappropriation before the critical date, not whether it had sufficient evidence to prove misappropriation of its trade secrets."

"The CAFC majority, with Judge Prost dissenting, found that the statute of limitations to bring a claim under the Defend Trade Secrets Act (DTSA) had expired. The decision reverses a $59.4 million damages award and was authored by Judge Dyk."

"Insulet Corporation sued EOFlow, Co. Ltd., EOFlow, Inc., and its chief executive officer and major stockholder Jesse Kim (EOFlow) for misappropriation of its trade secrets relating to its adhesive, wearable insulin patch pump called the Omnipod and EOFlow's own patch pump, called the EOPatch 2. The misappropriation was alleged to have occurred after EOFlow hired several former Insulet employees to help develop and commercialize the EOPatch 2."

"A jury in the U.S. District court for the District of Massachusetts found that EOFlow had misappropriated four Insulet trade secrets and that the claims were not time-barred, and awarded damages that were ultimately reduced by the district court to $25.8 million in compensatory damages and $33.6 million in exemplary damages following the verdict."

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