In a landmark case, a Massachusetts court awarded the Insulet Corporation a staggering $452 million in what is considered the largest jury verdict ever under the federal Defend Trade Secrets Act (DTSA). This case underscores a growing trend toward substantial financial awards in trade secret litigation.
Insulet Corporation, based in Massachusetts, initiated the lawsuit after discovering that its former employees, who had joined South Korean firm EOFlow, allegedly transferred confidential information critical to their proprietary insulin pump, the OmniPod. EOFlow utilized this information to develop similar technology, debuting their EOPatch and EOPatch 2 insulin pumps in the South Korean and European markets over several years.
Upon examining the EOPatch 2 product in February 2023, Insulet concluded that key trade secrets, including product design history and occlusion detection algorithms, had been misappropriated. This breach prompted Insulet to sue both the former employees and EOFlow in Massachusetts federal court.
At trial, which lasted a month and included testimony from 27 witnesses, the jury sided with Insulet Corporation. They found EOFlow and three ex-employees guilty of misappropriating trade secrets. Insulet was granted $170 million for profits EOFlow earned through the illicit use of these secrets, while $282 million was awarded as punitive damages for the deliberate nature of the misappropriation.
The jury was also involved in determining the potential for enhanced damages, a step usually preserved for the judge. This might set a precedent for future cases, raising the probability that such decisions could see more jury involvement, marking a shift in how punitive damages are decided in trade secret litigation.
The case delved into the timely detection of trade secret theft, focusing on when Insulet became aware of the misappropriation. The jury concluded Insulet discovered the theft only upon inspecting the EOPatch 2 in 2023, sparing the corporation from possible limitations on damage claims that could have been imposed if the theft had been recognized earlier.
While this represents the most substantial amount awarded under the DTSA to date, significant awards are not uncommon in the realm of trade secret litigation. Internationally, similar cases have also concluded with major penalties, like the $2 billion initially awarded to Appian in Virginia under state trade secret law against Pegasystems, although this verdict was overturned on appeal.
High-profile cases like Insulet v EOFlow contribute to the evolving jurisprudence in trade secret litigation and are particularly poignant for businesses and legal professionals dealing in intellectual property and competitive market dynamics.
As this case is likely to go through an appeals process, it underscores the ongoing significance and complexity of trade secret laws as businesses increasingly seek judicial redress for intellectual property infringements.
This article was generated automatically by OpenAI. The facts, circumstances, and story discussed may contain inaccuracies. Any concerns or requests for updates, corrections, or retractions can be addressed by contacting contact@publiclawlibrary.org.