Federal Circuit Clarifies Timing for Trade Secret Misappropriation Claims

Overview

On May 28, 2026, the U.S. Court of Appeals for the Federal Circuit issued a significant decision in Insulet Corp. v. EOFlow, Co. Ltd. The court held the Defend Trade Secrets Act (DTSA) barred the trade secret claims under its three-year limitations period. The court reversed a substantial jury verdict and permanent injunction against EOFlow. The decision means a plaintiff need not wait for conclusive proof or complete technical detail before filing suit. Instead, the limitations period begins when the plaintiff has enough information to plausibly allege misappropriation.

Key Takeaways

• Access plus product similarity can start the clock: A company does not need a competitor’s internal design details before it must act. If a competitor hires a former employee who had access to trade secrets and then launches a similar product, those facts can support a claim and start the three-year filing period.
• Related trade secrets may form one course of conduct: If a former employee takes a set of related confidential materials—such as design files, manufacturing know-how, or software logic—to benefit a competitor, the filing period can begin for all of those materials at the same time. A plaintiff cannot necessarily wait and bring separate claims later when additional details emerge.
• Reasonable diligence includes monitoring public information: The court emphasized that companies should review publicly available industry information. In practice, companies should monitor competitor announcements and product launches. If a company fails to investigate obvious public signs of a similar product, it may find it harder to argue that the limitations period should start later.
• Voluntary dismissals can create appellate and timing risks: In cases involving both patent and trade secret claims, a party may dismiss patent claims “without prejudice” to simplify trial. That decision can still carry significant consequences if the damages period expires before the party refiles those claims. The court also viewed that procedural posture as reinforcing Federal Circuit appellate jurisdiction.

This decision highlights the importance of timely investigation and early assessment when employee departures, competitor hiring, and similar product launches raise potential trade secret concerns. Businesses should evaluate whether their monitoring and escalation practices can identify possible claims before the limitations period expires.

For additional information, please contact the following:

Alastair Warr at [email protected]  with any questions or more specific situations.