# Insulet v. EOFlow: A $452 Million Verdict, an Avoided-Cost Theory, and the Limits of Trade-Secret Recovery

> How a Massachusetts jury found a competing insulin-patch maker liable for misappropriating Omnipod design secrets, and why the court then cut the award by nearly 90 percent.

Topic: Trade Secrets  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/insulet-v-eoflow-omnipod-trade-secrets/


In *Insulet Corporation v. EOFlow Co., Ltd.*, No. 23-cv-11780-FDS (D. Mass.), a Boston jury on December 3, 2024 returned one of the largest trade-secret verdicts of the past five years: $452 million against a South Korean medical-device maker and several of its principals for misappropriating the design and manufacturing secrets behind Insulet's Omnipod insulin patch pump. Chief Judge F. Dennis Saylor IV then reshaped that verdict in a series of post-trial rulings, culminating in a Memorandum and Order dated April 24, 2025 that granted a worldwide permanent injunction and, in the course of resolving competing post-trial motions, pared the monetary award to roughly $59.4 million. None of it survived. On May 28, 2026, the Federal Circuit reversed the judgment in its entirety, holding that Insulet's DTSA claim was time-barred. The district court proceedings remain a compact teaching text on the modern law of misappropriation under the Defend Trade Secrets Act (DTSA): they walk through improper acquisition, use, and threatened disclosure, the role of the employment relationship, and the contested boundary between unjust-enrichment damages and forward-looking injunctive relief. But the appellate outcome is the lesson that now matters most, and it is about the calendar rather than the merits.

## At a glance

- **Court:** U.S. District Court for the District of Massachusetts (Chief Judge F. Dennis Saylor IV)
- **Docket:** Civil Action No. 23-cv-11780-FDS
- **Jury verdict:** $452 million on December 3, 2024 ($170 million in unjust-enrichment/avoided-cost damages plus $282 million in exemplary damages)
- **Defendants found liable:** Six of seven, including EOFlow Co., Ltd., EOFlow, Inc., Nephria Bio, Inc., and CEO Jesse Kim; one former Insulet employee (Luis Malave) was not found liable
- **Trade secrets at issue:** Computer-aided design (CAD) files, soft-cannula technology, the occlusion-detection algorithm (ODA), and the design-history file (DHF) for the Omnipod
- **Post-trial result:** Permanent worldwide injunction; monetary award reduced to approximately $59.4 million ($25.8 million in avoided costs plus $33.6 million in exemplary damages)
- **On appeal:** Reversed. In *Insulet Corp. v. EOFlow, Co.*, No. 2025-1807 (Fed. Cir. May 28, 2026), a divided panel held the DTSA claim time-barred and reversed the judgment outright, with costs to EOFlow

## Improper acquisition through the employment relationship

Misappropriation under the DTSA, 18 U.S.C. § 1839(5), begins with acquisition of a trade secret "by improper means" or the use or disclosure of a secret by someone who knew or had reason to know it was acquired improperly. The Insulet record offered a textbook version of the most common acquisition pathway: departing employees. EOFlow hired several individuals who had worked on the Omnipod program (including DiIanni and Welsford, who were named as defendants), and the plaintiff's theory was that these employees carried Insulet's confidential design and manufacturing know-how into a direct competitor's development effort.

That theory illustrates a recurring doctrinal point. An employee who lawfully learns confidential information during employment does not "acquire" it by improper means; the wrong lies in the *use or disclosure* of that information in breach of a duty to maintain secrecy. The employment relationship supplies the confidential relationship that the law of trade secrets has always treated as central: the duty arising from the circumstances under which the knowledge was imparted. The jury's split verdict, finding six defendants liable but exonerating Malave, underscores that liability is individualized: mere prior access to secrets is not enough; the factfinder must connect a particular defendant to the improper use or disclosure.

## Use: the EOPatch and the avoided-cost measure of harm

The clearest evidence of "use" was the accused product itself. EOFlow's EOPatch 2 was a tubeless, wearable insulin patch that competed directly with the Omnipod, and Insulet's case framed the redesigned device as the embodiment of its misappropriated CAD files, soft-cannula design, occlusion-detection algorithm, and design-history file. Where a defendant ships a competing product, "use" is rarely the contested element; the battleground shifts to damages.

Here the jury's $170 million compensatory figure rested predominantly on an *avoided-cost* theory: the research, development, and time-to-market expenses EOFlow saved by building on Insulet's work rather than developing the technology independently. The DTSA expressly authorizes recovery for "unjust enrichment caused by the misappropriation" to the extent it is not addressed by actual-loss damages, and avoided development cost is a recognized proxy for that enrichment. But the measure is not free-floating: it must reflect a benefit the defendant actually realized and must not duplicate other relief. That qualification became the fulcrum of the post-trial decision.

## Threatened disclosure and the injunction

Trade-secret law reaches not only completed use but threatened disclosure, and that prospect shaped the equitable relief. EOFlow had been the target of a proposed acquisition by a larger medical-device company (publicly reported to be Medtronic), and Insulet argued that a sale would have placed its secrets in the hands of an even more formidable competitor. The court ultimately entered a permanent worldwide injunction barring the defendants from possessing, using, selling, or distributing the trade secrets or the EOPatch 2, with a narrow, temporary carve-out allowing continued supply to existing patients in the European Union and the Republic of Korea during the appeal: a humane accommodation for users who depend on the device for insulin delivery.

The injunction is what forced the damages recalibration. The avoided-cost award compensated Insulet for the head start EOFlow gained; the injunction, by stopping future sales, separately stripped EOFlow of the fruits of that head start going forward. Allowing both in full, the court reasoned, would be an impermissible double recovery: the plaintiff cannot collect the full value of the defendant's future exploitation and simultaneously enjoin that exploitation. The court therefore trimmed the unjust-enrichment component (notably eliminating avoided-cost damages tied to the design-history file) to roughly $25.8 million: $14.6 million for the CAD files, $9 million for the soft cannula, and $2.2 million for the occlusion-detection algorithm, with nothing for the design-history file. It then recalculated exemplary damages. The DTSA ceiling is twice the compensatory award, which would have permitted $51.6 million, but the jury had found willful and malicious misappropriation only as to the CAD files, the ODA, and the design-history file. Doubling the two surviving willful components ($14.6 million and $2.2 million) produced about $33.6 million, and a total near $59.4 million. The willful-and-malicious findings that supported exemplary damages survived; what changed was the arithmetic, not the culpability determination.

## The issue that decided the case

The most significant issue turned out to be temporal, not substantive. The DTSA imposes a three-year limitations period that runs from the date the misappropriation "is discovered or by the exercise of reasonable diligence should have been discovered." 18 U.S.C. § 1836(d). EOFlow contended that Insulet was on notice of the competing device years before it sued in 2023, which would bar the claims; Insulet countered that the clock starts only on actual or constructive discovery of the *misappropriation*, not mere awareness of a rival product. Chief Judge Saylor declined to disturb the verdict on this ground but candidly acknowledged that "reasonable minds may differ as to that determination, given that the accrual standard under the DTSA is not yet clearly established," treating the question as unsettled enough to support a partial stay pending appeal.

He was right to hedge. On May 28, 2026, the Federal Circuit reversed. Writing for a divided panel (Judge Dyk, with Judge Prost dissenting), the court held that a DTSA claim accrues once the plaintiff knows, or with reasonable diligence should know, facts sufficient to plead misappropriation: essentially the defendant's access to the secret plus a resemblance between the secret and the accused product. It expressly declined to decide whether the DTSA also incorporates a stricter inquiry-notice standard, because it did not need to. On the undisputed record, Insulet knew by March 2019 that former employees with access to Omnipod know-how were working on the EOPatch 2, and its own personnel had photographed EOFlow's samples at the 2018 ADA conference and remarked on the similarities. That was more than three years before Insulet filed on August 3, 2023. The court also held that where one person discloses related secrets to the same defendant in a single course of conduct, discovery as to one starts the clock for all. Having found the claim time-barred, the panel declined to reach EOFlow's remaining arguments, reversed the judgment, and awarded costs to EOFlow. The damages and the injunction fell with the liability verdict, and Insulet's conditional cross-appeal in the First Circuit was mooted.

A methodological question survives the reversal: how courts should structure avoided-cost awards when a permanent injunction is also on the table. The district court's analysis supplies a cautionary template: present the two forms of relief as alternatives, or risk a sweeping post-trial reduction.

## Implications

- **Avoided cost is powerful but bounded.** Plaintiffs can recover the defendant's saved development expense, but they cannot stack a forward-looking value award on top of an injunction that eliminates the same future exploitation.
- **Plead damages in the alternative.** Trade-secret plaintiffs should be prepared to elect between a full monetary award and broad injunctive relief, and should help the jury segregate backward- from forward-looking harm.
- **Limitations diligence can be dispositive.** Insulet lost a $59.4 million judgment and a worldwide injunction on nothing but the calendar. Under the Federal Circuit's 2026 ruling, suspicion plus access plus similarity starts the three-year clock, so a plaintiff who waits to investigate a suspiciously similar competing product can forfeit the claim entirely.
- **Individualized proof matters.** A defendant's prior access to secrets does not equal liability; the exoneration of one former employee shows juries will parse each actor's conduct.
- **Equity can bend for end users.** Courts may craft narrow humanitarian carve-outs, such as continued device supply to existing patients, even within a sweeping injunction.

## Frequently asked questions

**What are "avoided costs" and why did they shrink the award?**
Avoided costs measure the research-and-development expense a defendant saved by misappropriating rather than independently developing technology. They are a valid unjust-enrichment proxy under the DTSA, but the court found that awarding their full value *and* enjoining future sales compensated Insulet twice for the same forward-looking benefit, so it eliminated the overlapping portion.

**Why did the exemplary damages fall so far?**
The DTSA caps exemplary damages at two times the compensatory (unjust-enrichment) award, so cutting the compensatory base to about $25.8 million lowered the ceiling to $51.6 million. The court landed well under it. The jury had found willful and malicious misappropriation only as to the CAD files, the occlusion-detection algorithm, and the design-history file, and the design-history-file damages were eliminated as duplicative, so doubling the two surviving willful components ($14.6 million and $2.2 million) yielded roughly $33.6 million rather than the jury's $282 million.

**Did the statute-of-limitations issue threaten the whole verdict?**
It ended it. On May 28, 2026, the Federal Circuit held that Insulet knew or reasonably should have known of the misappropriation by March 2019, more than three years before it filed in August 2023, and reversed the judgment as time-barred. The damages and the worldwide injunction fell with it. The district court had itself flagged the accrual question as genuinely unsettled.

## Authorities and sources

- Insulet Corp. v. EOFlow, Co., No. 2025-1807 (Fed. Cir. May 28, 2026) (reversing the judgment as time-barred), slip opinion: https://www.cafc.uscourts.gov/opinions-orders/25-1807.OPINION.5-28-2026_2700697.pdf
- Insulet Corp. v. EOFlow, Co., 104 F.4th 873 (Fed. Cir. June 17, 2024) (No. 24-1137) (reversing the preliminary injunction), slip opinion: https://www.cafc.uscourts.gov/opinions-orders/24-1137.OPINION.6-17-2024_2334858.pdf
- INSULET CORPORATION v. EOFLOW CO LTD (D. Mass. Apr. 24, 2025), FindLaw opinion text: https://caselaw.findlaw.com/court/us-dis-crt-d-mas/117206719.html
- Benesch, "Update: Insulet Corp.'s Trade Secrets Jury Award Reduced From $452 Million To $59.4 Million To Avoid Double Recovery": https://www.beneschlaw.com/insight/update-insulet-corp-s-trade-secrets-jury-award-reduced-from-452-million-to-59-4-million-to-avoid-double-recovery/
- Proskauer, "Jury Awards $452 Million After Trade Secrets Trial": https://www.proskauer.com/blog/jury-awards-452-million-after-trade-secrets-trial
- Goodwin, "Goodwin Secures $452 Million Trade Secret Award for Insulet Corporation": https://www.goodwinlaw.com/en/news-and-events/news/2024/12/announcements-practices-ip-goodwin-secures-452m-trade-secret-award-for-insulet
- Lando & Anastasi, case page for Insulet Corp. v. EOFlow (D. Mass. 23-cv-11780): https://www.lalaw.com/d-mass-ip-litigation/article/insulet-corporation-v-eoflow-co-ltd-et-al-d-mass-23-cv-11780-2/
- Defend Trade Secrets Act, civil remedies and limitations period, 18 U.S.C. § 1836: https://www.law.cornell.edu/uscode/text/18/1836
- Defend Trade Secrets Act, definitions (including "misappropriation"), 18 U.S.C. § 1839: https://www.law.cornell.edu/uscode/text/18/1839