Dive Brief:
- A U.S. appeals court has ruled Insulet cannot collect a $59.4 million award from EOFlow regarding a trade secrets case.
- The judges, who reached the ruling Thursday, concluded that Insulet should have known of the alleged theft more than three years before it filed a lawsuit against rival insulin pump company EOFlow.
- Because Insulet failed to bring the case in that three-year window, the judges concluded that it was time-barred and overturned the earlier judgment. “We are disappointed in the decision and continue to believe strongly in the merits of our case,” a spokesperson for Insulet wrote in an email to MedTech Dive, adding the company is evaluating all available options, including further review.
Dive Insight:
Insulet filed a complaint against South Korea-based EOFlow on Aug. 3, 2023. In December 2024, a federal jury awarded Insulet $452 million after finding EOFlow guilty of misappropriation. Insulet requested and received a permanent injunction. EOFlow argued the injunction duplicated the damages, leading a court to reduce the payment to $59.4 million last year.
The timing of Insulet’s original complaint was one aspect of the case, with the legal teams citing different precedents to argue that it was or was not too late. The appeals court sided with EOFlow on the question and overturned the $59.4 million award.
Elizabeth Prelogar, the Cooley partner who argued the appeal, said in an emailed statement that the court ruled parties alleging trade secret violations must act promptly. The decision is a sweeping victory for EOFlow and for innovation, Prelogar said.
U.S. law gives companies three years to file a complaint after they discover, or should have discovered, the misappropriation of their trade secrets. The judges said Insulet staff photographed EOFlow samples at a conference in 2018 and visited their rival’s website 20 times in the days after the event. Jonathan Paris, Insulet’s deputy general counsel, reportedly examined the EOFlow booth at an event in 2019.
Two of the judges concluded the events provide “undisputed evidence that Insulet knew or should have known” of the similarities between its trade secrets and the EOPatch 2 device. The conclusion led the judges to overturn the ruling because Insulet complained too late.
A third judge sided with Insulet in a dissenting opinion. The dissenting judge concluded that the jury that awarded $452 million was responsible for deciding whether Insulet’s “so-called investigations” around the 2018 conference should have led the company to discover the trade secret misappropriation before the critical date.
Insulet filed the complaint against EOFlow two months after Medtronic agreed to buy the Korean company for about $738 million. Medtronic canceled the takeover four months after Insulet filed the lawsuit, citing “multiple breaches” of the companies’ agreements.
