A judge has issued a permanent injunction, signaling an Insulet (Nasdaq:PODD) victory in a trade secret case against EOFlow.
The permanent injunction highlights the successful defense of Insulet’s intellectual property. Subsequently, the damages award was reduced from $452 million to $60 million at Insulet’s election. The company wanted the permanent injunction instead of the higher damages account.
Both companies develop automated insulin delivery systems utilizing patch pump technology. Insulet offers the market-leading Omnipod platform, while Korea-based EOFlow develops the EOPatch — similarly, a tubeless, wearable and fully disposable insulin delivery device. EOFlow was at one point going to be acquired by Medtronic for $738 million. However, Medtronic called the deal off in December 2023, citing “multiple breaches” to their acquisition agreement.
Late last year, Insulet announced that it successfully defended its intellectual property against EOFlow in U.S. federal court. A jury found that EOFlow and several other defendants misappropriated Insulet’s trade secrets. Insulet was awarded $170 million in compensatory damages from EOFlow. The Acton, Massachusetts-based company also received an additional $282 million in exemplary damages from EOFlow. Those damages, covering “willful and malicious misappropriation,” brought the total award to $452 million. Insulet said at the time that it had no certainty over EOFlow’s ability to satisfy the damages.
News of the legal victory follows a major personnel move at Insulet, which yesterday appointed Ashley McEvoy as CEO.
What the permanent injunction means for Insulet
After the jury verdict siding with Insulet last fall, the court issued rulings on the parties’ post-trial motions. It granted Insulet’s motion for a worldwide permanent injunction. In doing so, the court rejected EOFlow’s arguments for judgments as a matter of law and for a new trial. This confirmed the jury’s verdict of willful trade secret misappropriation.
The court also awarded damages of $60 million alongside the injunction. This injunction prohibits EOFlow from using or disclosing Insulet’s trade secrets worldwide, excepting sales to existing European and Korean patients for a six-month period. This allows the customers to transition to alternatives.
Additionally, the injunction requires the defendants to assign their rights in certain recent patents and applications in jurisdictions worldwide because they were improperly based on and disclose Insulet trade secrets.
The injunction also requires EOFlow to analyze its systems to identify and remove documents containing trade secrets. Insulet has the right to audit this. Additionally, in the event that EOFlow is successful in obtaining a break-up free from Medtronic, it has to pay that fee to Insulet.
Finally, the court denied EOFlow’s post-trial motions on all grounds. It found that substantial evidence supported the jury’s verdict.
Goodwin’s Robert Carroll, Robert Frederickson, and Alexandra Valenti represented and earned the victory on behalf of Insulet.
