Trade Secrets

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.

February 21, 2026
Wearable insulin patch pump on a laboratory bench
The dispute turned on design and manufacturing secrets behind Insulet's Omnipod insulin patch pump. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

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. The case is a compact teaching text on the modern law of misappropriation under the Defend Trade Secrets Act (DTSA): it walks through improper acquisition, use, and threatened disclosure, the role of the employment relationship, and — most consequentially — the still-unsettled boundary between unjust-enrichment damages and forward-looking injunctive relief.

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: December 3, 2024 — $452 million ($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, applying the DTSA’s 2x cap)
  • On appeal: The DTSA’s three-year limitations period and the meaning of its “discovery” trigger

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, then applied the DTSA’s exemplary-damages ceiling, which caps such damages at twice the compensatory award, yielding 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.

Open questions

The most significant unresolved issue is 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,” treating the question as unsettled enough to support a partial stay pending appeal. Whether the statute embeds a true discovery rule or something closer to inquiry notice — and how much a sophisticated plaintiff must investigate a competitor’s suspiciously similar product — is now squarely before the Federal Circuit and could decide the case in its entirety.

A second open question is methodological: how courts should structure avoided-cost awards when a permanent injunction is also on the table. Insulet 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 is now a live defense. After Insulet, defendants will press the DTSA’s discovery trigger aggressively, and plaintiffs should document when and how they first suspected misappropriation.
  • 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 — here, 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. Once the court reduced the compensatory base to about $25.8 million, the exemplary maximum dropped correspondingly to roughly $33.6 million, regardless of the jury’s original $282 million figure.

Does the statute-of-limitations issue threaten the whole verdict? Potentially. If the appellate court holds that Insulet knew or reasonably should have known of the misappropriation more than three years before filing in 2023, the DTSA claims could be time-barred — which would unwind both the damages and the injunction. The district court itself flagged the question as genuinely unsettled.

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