Hidden Trade Secrets: The Silent Killer; Federal Circuit Overturns a $59.4 Million Trade Secret Verdict on Statute of Limitations Ground
The Defend Trade Secrets Act (“DTSA”) provides that when misappropriation continues over time, all of it constitutes "a single claim of misappropriation" with one limitations period. 18 U.S.C. § 1836(d). The clock starts when the plaintiff discovers, or by reasonable diligence should have discovered, the misappropriation, and it runs only once. On May 28, 2026, in Insulet Corp. v. EOFlow, Co., No. 2025-1807 (Fed. Cir. May 28, 2026), the Federal Circuit applied that rule to overturn a $59.4 million verdict (reduced from a jury award of $452 million). The jury had found that EOFlow misappropriated Insulet’s trade secrets, three of them willfully. The Federal Circuit reversed, holding the claims untimely: once the clock had run on one trade secret, it had run on all of them.
The Disclosures
Insulet makes the Omnipod insulin patch pump. EOFlow developed a competing pump, the EOPatch 2. The misappropriation ran through Steve DiIanni, Insulet's former Director of Mechanical Engineering, who consulted for EOFlow between March and May 2018. During that period, he allegedly disclosed several of Insulet's trade secrets, including CAD files for the Omnipod, soft-cannula design and manufacturing information, and the Omnipod's occlusion-detection algorithm.
Insulet sued on August 3, 2023. Because the DTSA's limitations period is three years, that filing date set a critical date of August 3, 2020: any misappropriation Insulet discovered, or should have discovered, before that date was time-barred. The jury found the claim timely and awarded damages, and the district court denied EOFlow's motion for judgment as a matter of law on limitations. The Federal Circuit reversed, holding the claim time-barred as a matter of law.
The Single-Claim Rule
The DTSA's single-claim provision, drawn from the Uniform Trade Secrets Act, follows the relationship theory of Monolith Portland Midwest Co. v. Kaiser Aluminum & Chemical Corp., 407 F.2d 288 (9th Cir. 1969): the wrong is the breach of the confidential relationship, which occurs once. The court held that once a plaintiff is on notice that a defendant cannot be trusted with one secret, the clock runs on all related secrets the same person disclosed, in the same period, for the same purpose. Intermedics, Inc. v. Ventritex, Inc., 822 F. Supp. 634 (N.D. Cal. 1993); Gognat v. Ellsworth, 259 P.3d 497 (Colo. 2011). By March 2019, Insulet knew DiIanni had joined EOFlow, and its own employees had already concluded that the EOPatch 2 resembled the Omnipod, which the court held was enough to start the clock on the statute of limitations.
Applying that framework, the court held the occlusion-detection algorithm claim time-barred as well. Unlike the CAD files, the algorithm did not "outwardly manifest" in the EOPatch 2; it was a secret "used internally to develop a product," and Insulet learned of its misappropriation only in discovery. The court nonetheless held that the claim based on the occlusion-detection algorithm was time-barred because DiIanni disclosed it in the same episode as the CAD-files secret that Insulet could have detected from the finished product. The limitations clock can therefore run on a secret the plaintiff has no way to detect, so long as it was disclosed together with one the plaintiff could.
Takeaway
Knowledge that a departing employee takes one secret can start the limitations clock on every related trade secret misappropriated, including secrets the owner cannot detect in the competitor's product and may not learn of until discovery. A plaintiff who waits to confirm the full scope of a theft risks losing claims it did not yet know it had. For accused companies, limitations is a front-line defense that can yield judgment as a matter of law even after a plaintiff has won a willfulness verdict and a nine-figure award.
Insulet Corp. v. EOFlow, Co., No. 2025-1807 (Fed. Cir. May 28, 2026).