Insulet Corp. v. EOFlow — Federal Circuit Reverses $452M Trade Secret Verdict as Time-Barred Under DTSA

Background

Insulet Corporation manufactures the Omnipod, a wearable insulin patch pump first marketed in 2005. EOFlow developed a competing product called the EOPatch. Insulet alleged that EOFlow misappropriated Insulet’s trade secrets by hiring several former Insulet employees — most notably Steve DiIanni, Insulet’s former Director of Mechanical Engineering — who then disclosed confidential technical information including CAD files, soft cannula designs, design history files, and an occlusion-detection algorithm to EOFlow between March and May 2018.

Insulet filed suit in August 2023, asserting trade secret misappropriation under the Defend Trade Secrets Act (DTSA) and patent infringement. After a five-week jury trial, the jury found misappropriation of four trade secrets and awarded $170 million in compensatory damages and $282 million in exemplary damages — a $452 million verdict. The district court later reduced the total damages to approximately $59 million to avoid overlap with a permanent injunction.

EOFlow appealed, arguing that Insulet’s DTSA claim was time-barred because Insulet knew or should have known of the misappropriation more than three years before filing suit. The DTSA requires that claims be brought within three years of when the misappropriation “is discovered or by the exercise of reasonable diligence should have been discovered.”

The Court’s Holding

The Federal Circuit reversed the jury verdict, holding that the statute of limitations had expired before Insulet filed its complaint. Writing for the majority, Judge Dyk applied the “access-plus-similarity” framework: a plaintiff has sufficient knowledge to bring a trade secret claim when it knows (1) the alleged misappropriator had access to its trade secrets through a former employee, and (2) there is similarity between the trade secrets and the competitor’s product.

The undisputed evidence showed that by March 2019 — well before the August 2020 “critical date” (three years prior to filing) — Insulet knew Mr. DiIanni was working with EOFlow on the EOPatch 2. And at the June 2018 ADA Conference, Insulet employees observed the EOPatch 2 and noted it “cloned” the Omnipod. One employee emailed management that “EOFlow has cloned our product.” An intelligence summary described EOFlow’s product as having a “very similar product” started by a former Insulet engineer. These facts, the court held, were sufficient to state a trade secret misappropriation claim.

The court also made two important legal holdings. First, it adopted the view that a “continuing misappropriation constitutes a single claim” under the DTSA, meaning that once the statute of limitations begins running on one trade secret in a related set of disclosures, it runs on all related secrets disclosed by the same person, to the same defendant, at the same time, and for the same purpose. Second, it held that detailed knowledge of manufacturing specifications or precise dimensions is not required to trigger the limitations period — knowledge of access and general product similarity is enough.

Key Takeaways

• Time is of the essence in trade secret cases. Under the DTSA’s three-year statute of limitations, the clock starts when a company knows or should know that a former employee is working for a competitor on a similar product — not when it obtains detailed proof of misappropriation.
• “Continuing misappropriation” is a single claim. The Federal Circuit held that when related trade secrets are disclosed by the same person to the same defendant during the same period, they constitute a single claim for limitations purposes. A company cannot “compartmentalize” its suspicion of wrongdoing to extend the statute for related secrets.
• Access plus similarity suffices. Knowledge that a former employee with access to trade secrets is developing a visually similar competing product is enough to trigger the limitations period, even without reverse-engineering or detailed technical comparisons.
• Public disclosures matter. Trade show displays, prospectuses, and public filings can demonstrate that product similarities were discoverable before the critical date, undercutting arguments that internal workings were hidden.

Why It Matters

This precedential decision is one of the most significant Federal Circuit rulings on the DTSA statute of limitations to date, reversing a nine-figure jury verdict. It sends a clear message to companies: if you suspect a competitor has hired your employees and is developing a suspiciously similar product, you cannot take years to investigate before filing suit. The three-year clock starts ticking when you learn the basic facts of access and similarity, not when you compile ironclad evidence of exactly how your secrets were used.

The ruling also resolves an important question about how the DTSA treats related trade secrets. By holding that all secrets disclosed in a single course of conduct constitute one claim for limitations purposes, the court prevents plaintiffs from bringing successive trade secret suits based on the same underlying breach of confidence. For in-house counsel and outside litigation teams, the practical takeaway is to act quickly once red flags emerge — waiting to build a “perfect” case may mean having no case at all.

Judge Prost’s dissent argued that the majority’s approach effectively collapses the discovery rule into the inquiry-notice standard and encourages premature lawsuits based on “mere suspicion.” This 2-1 split signals that the boundaries of the DTSA limitations framework may continue to evolve.