Defend Trade Secrets Act/DTSA Archives

Defend Trade Secrets Act/DTSA

Specificity matters: Eighth Circuit rejects broad trade secret claims

by Jodi Benassi | Jul 23, 2026 | Trade Secrets

The US Court of Appeals for the Eighth Circuit affirmed a district court’s summary judgment against a trade secret plaintiff, finding that the plaintiff’s broad descriptions of confidential business information failed to identify its alleged trade secrets with sufficient specificity. Wilbur-Ellis Company v. Gompert, et al., Case Nos. 25-1577; -1682 (8th Cir. July 7, 2026) (Shepard, Erickson, Grasz, JJ.)

Wilbur-Ellis, an international marketer and distributor of agricultural products, specialty chemicals, and ingredients, sued four former employees after they left to join competitor J.R. Simplot Company, alleging breach of the duty of loyalty, trade secret misappropriation under the Defend Trade Secrets Act (DTSA) and the Nebraska Trade Secrets Act (NTSA), and tortious interference with business relationships. During discovery, the district court denied Wilbur-Ellis’s requests to compel discovery from both Simplot and the former employees, concluding that Wilbur-Ellis had not identified its alleged trade secrets with sufficient specificity to justify the requested discovery. After denying Wilbur-Ellis’s request to delay summary judgment pending additional discovery, the district court granted summary judgment to the former employees on the trade secret and tortious interference claims and on most of the duty-of-loyalty claims. Wilbur-Ellis appealed.

Discovery orders affirmed

Wilbur-Ellis argued that the district court improperly prevented it from obtaining discovery from Simplot by requiring it to identify its alleged trade secrets with greater specificity before permitting third-party discovery.

The Eighth Circuit disagreed, finding that the district court did not abuse its discretion in denying Wilbur-Ellis’s motion to compel. The Eighth Circuit noted that the district court had identified several concerns, including that Wilbur-Ellis’s trade secret disclosure was extremely broad, appeared to treat nearly everything the former employees encountered as a trade secret, and raised concerns that the requested third-party discovery would amount to a fishing expedition. The Court emphasized that Wilbur-Ellis did not dispute those findings on appeal or that it had sought third-party discovery before exhausting discovery from the former employees.

Trade secret claims fail for lack of specificity and evidence

Wilbur-Ellis also argued that the district court improperly granted summary judgment on its DTSA and NTSA claims. The Eighth Circuit disagreed, concluding that Wilbur-Ellis failed to present sufficient evidence that it possessed protectable trade secrets or that the defendants misappropriated them. The Court explained that Wilbur-Ellis relied on broad descriptions of categories of information – such as customer information, financial information, and business strategy – without identifying the specific trade secrets allegedly taken, who misappropriated them, or how they were misappropriated. The Court further found that, although Wilbur-Ellis identified its password-protected SeedWare database as confidential, it failed to produce evidence that the defendants improperly acquired, disclosed, or used any information contained in the database. Because Wilbur-Ellis failed to connect its allegations to specific trade secrets or admissible evidence of misappropriation, the Court found summary judgment was appropriate.

Duty of loyalty claims

Wilbur-Ellis next argued that the district court improperly granted summary judgment on its breach of the duty of loyalty claims. The Eighth Circuit disagreed, finding that Wilbur-Ellis failed to present admissible evidence that [...]

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A $40 million jury instruction error sends trade secret dispute back to trial

by Jodi Benassi | Jul 23, 2026 | Trade Secrets

The US Court of Appeals for the Ninth Circuit reversed a jury damages award, a permanent injunction, and an attorneys’ fee award in a trade secret misappropriation case, finding that the district court improperly instructed the jury on which party bore the burden of proving whether the asserted trade secrets were “readily ascertainable through proper means.” Comet Technologies USA, Inc. et al. v. XP Power, LLC, Case Nos. 23-15601; 25-15709; 25-745 (9th Cir. July 14, 2026) (Hamilton, Nelson, Bumatay, JJ.) (Bumatay, dissenting)

Comet Technologies, a Swiss-based leader in x-ray and radio-frequency products, sued US-based competitor XP Power after three former Comet engineers left to join XP, allegedly bringing thousands of confidential documents relating to Comet’s radio-frequency power technologies, product designs, and research and development. Comet asserted claims under the federal Defend Trade Secrets Act (DTSA) and California’s Uniform Trade Secrets Act (CUTSA).

Before trial, Comet narrowed its case to five alleged trade secrets and voluntarily dismissed its CUTSA claims, leaving only its DTSA claims. The parties addressed the effect of that dismissal on the jury instructions, with XP requesting that the burden of proving lack of ready ascertainability be shifted to Comet to conform to the DTSA while Comet argued that the instruction should be removed entirely. The district court rejected both requests without an on-the-record explanation and left in Instruction 20, which told the jury that XP was not liable for misappropriation if XP proved by a preponderance of the evidence that the alleged trade secrets were readily ascertainable by proper means, meaning they could be lawfully “obtained, discovered, developed, reverse-engineered, or compiled without significant difficulty, effort, or expense.”

The jury found that XP misappropriated three of the five trade secrets and awarded Comet $20 million in compensatory damages and $20 million in exemplary damages. The district court also entered a permanent injunction and awarded more than $17 million in attorneys’ fees. XP appealed.

Erroneous jury instruction: “Readily ascertainable by proper means”

XP argued that the district court improperly instructed the jury that XP bore the burden of proving that Comet’s alleged trade secrets were “readily ascertainable by proper means.” Comet argued that XP invited the instructional error by requesting that the challenged instruction be given to the jury and, alternatively, that any error was harmless because the instructions were accurate as a whole, they correctly stated the law, and the evidence overwhelmingly established that Comet’s trade secrets were not readily ascertainable through proper means.

The Ninth Circuit agreed with XP, explaining that under the DTSA, lack of ready ascertainability is an element of Comet’s DTSA claim – not an affirmative defense – and, therefore, Comet bore the burden of proof. The Court rejected Comet’s invited-error argument, finding that XP timely objected after Comet dismissed its CUTSA claims and correctly argued that, under the DTSA, Comet – not XP – bore the burden of proving that the alleged trade secrets were not readily ascertainable through proper means.

The Ninth Circuit also rejected Comet’s harmless-error argument. The Court explained that [...]

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Tick tock: Related trade secrets have single accrual date under DTSA statute of limitations

by Tori Lazerson | Jun 11, 2026 | Trade Secrets

The US Court of Appeals for the Federal Circuit reversed a judgment awarding damages and a permanent injunction, finding that the plaintiff’s trade secret misappropriation claims were barred by the statute of limitations under the Defend Trade Secrets Act (DTSA). Insulet Corp. v. EOFlow, Co. Ltd., Case No. 25-1807 (Fed. Cir. May 28, 2026) (Dyk, Reyna, JJ.) (Prost, J., dissenting).

Insulet manufactures the Omnipod, an adhesive wearable insulin patch pump currently sold in 25 countries. EOFlow developed a competing product, the EOPatch 2, marketed in Europe and South Korea. On August 3, 2023, Insulet filed suit against EOFlow alleging trade secret misappropriation under the DTSA and patent infringement.

The misappropriation allegedly occurred when EOFlow hired several former Insulet employees to develop the EOPatch 2. The employees included Steve DiIanni, former director of mechanical engineering at Insulet, who possessed “detailed technical information” about the Omnipod. Between March and May 2018, DiIanni provided EOFlow with computer-aided design (CAD) files and information regarding the Omnipod’s soft cannula and occlusion-detection algorithm.

The district court bifurcated the DTSA and patent claims. At trial on the DTSA claims, the jury found misappropriation of four trade secrets, including the Omnipod CAD files, and concluded that none of Insulet’s claims were barred by the statute of limitations. The jury initially awarded $170 million in compensatory damages and more than $280 million in exemplary damages. These amounts were reduced to $26 million and $34 million, respectively, with the district court’s grant of a permanent injunction. Insulet’s patent claims were dismissed without prejudice.

On appeal, Insulet moved to transfer to the Court of Appeals for the First Circuit. The Federal Circuit denied the motion, concluding that it retained jurisdiction because the dismissal of the patent claims functioned, at least in part, as a dismissal with prejudice, since the statute of limitations expired with respect to certain alleged acts of patent infringement. The Court then addressed two issues under the DTSA statute of limitations: when the statute of limitations begins to run and whether related trade secrets are subject to a single accrual date.

On the first issue, the parties disputed the applicable standard. EOFlow argued that the statute of limitations began to run under an inquiry-notice standard while Insulet contended that the Supreme Court’s 2010 decision in Merck & Co. v. Reynolds required application of a discovery standard under which the limitations period begins when the plaintiff discovers or reasonably should have discovered the facts underlying its claim. The Federal Circuit declined to decide which standard governed, concluding that Insulet’s claims were time-barred even under the more demanding Merck standard. Applying an access-plus-similarity framework, the Court found that, before the critical date, Insulet knew or should have known that EOFlow had access to its trade secrets through a former Insulet employee, and possessed sufficient information regarding similarities between the EOPatch 2 and Insulet’s trade secret technology to plead a misappropriation claim.

On the second issue, for which there was no controlling First Circuit authority, the Federal Circuit determined that the [...]

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Trade secret owner may pursue unjust enrichment damages despite licensing history

by Amol Parikh | Jun 4, 2026 | Trade Secrets

The US Court of Appeals for the Federal Circuit affirmed in part, reversed in part, and vacated in part a district court’s post-trial rulings in a trade secret and contract dispute, finding that a trade secret plaintiff may pursue unjust enrichment damages under both the Defend Trade Secrets Act (DTSA) and the Michigan Uniform Trade Secrets Act (MUTSA) even where the parties have a prior licensing relationship. The Court also reinstated the jury’s breach-of-contract damages award and rejected the defendant’s attempt to impose a heightened knowledge requirement for combination trade secrets. Versata Software, LLC v. Ford Motor Co., Case No. 24-1140 (Fed. Cir. May 22, 2026) (Moore, Taranto, Hughes, JJ.)

Ford licensed Versata’s automotive configuration software under a Master Subscription and Services Agreement. When the agreement was about to expire, the parties failed to agree on renewal terms, and Ford released its own software, which it had developed while still licensing Versata’s software. Versata alleged that Ford misappropriated several combination trade secrets embodied in Versata’s software and breached the parties’ agreement. A jury found Ford liable for misappropriating three trade secrets and for breach of contract, awarding more than $22 million in trade secret damages and $82.26 million in contract damages.

Before trial, the district court had limited Versata to a reasonable royalty theory based on the parties’ licensing history and had excluded damages models that measured the value Ford allegedly derived from using the trade secrets. After trial, the district court reduced the trade secret damages award to $0 and the contract award to $3. Versata appealed.

The Federal Circuit found that the district court had legally erred by categorically precluding unjust enrichment damages. The Court explained that the plain language of both the DTSA and the MUTSA permits recovery of unjust enrichment caused by misappropriation that is not accounted for in actual loss. While prior licensing history may be relevant to damages, it does not foreclose unjust enrichment as a matter of law. The Court therefore vacated the zeroed-out trade secret damages judgment and remanded for a new damages trial, instructing the district court to reconsider the reasonable royalty models it had previously excluded because they were not based solely on licensing history.

On the contract award, the Federal Circuit reversed the district court’s decision and reinstated the jury’s $82 million award. Applying Michigan law, the Court concluded that Versata had given the jury a reasonably certain damages path in the form of three annual license figures ($17 million, $14.95 million, and $10.95 million) multiplied by seven and a half years. The jury’s $82.26 million award equated to about $10.97 million per year, which fell within the range supported by the evidence and did not shock the conscience.

The Federal Circuit also affirmed liability for trade secret misappropriation. Ford argued that Versata had to show that Ford knew the specific elements of each combination trade secret at the time of use or disclosure. The Court rejected that proposed heightened requirement, concluding that neither the DTSA nor the MUTSA [...]

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Case exterminated too soon: DTSA and CFAA claims survive

by Jodi Benassi | Feb 5, 2026 | Trade Secrets

The US Court of Appeals for the Tenth Circuit partially reversed and partially affirmed a series of district court rulings arising from alleged corporate espionage between competitors in the pest control industry. The decision clarifies the scope of recoverable “loss” under the Computer Fraud and Abuse Act (CFAA) after Van Buren and underscores that causation requirements under the Defend Trade Secrets Act (DTSA) and state trade secret law depend on the remedy sought. Moxie Pest Control LLC, et al. v. Kyle Nielsen, et al., Case No. 24-4076 (10th Cir. Jan. 21, 2026) (Hartz, Moritz, Rossman, JJ.)

Moxie sued rival Aptive Environmental, alleging that Aptive employees bribed current and former Moxie sales representatives to obtain confidential sales data stored in Moxie’s password-protected SalesRoutes system. According to Moxie, Aptive used this data (particularly sales leaderboards) to recruit door-to-door sales representatives by portraying Aptive as the more lucrative employer. Moxie brought claims under the CFAA, Racketeer Influenced and Corrupt Organizations (RICO) Act, DTSA, and Utah’s Uniform Trade Secrets Act (UTSA).

The district court dismissed Moxie’s CFAA claim at the pleading stage, denied motions to compel broad damages discovery, and granted Aptive summary judgment on the RICO, DTSA, and UTSA claims based on a lack of causation. Moxie appealed.

CFAA claim reinstated

The Tenth Circuit found that the district court erred in dismissing Moxie’s CFAA claim for failure to plead a qualifying “loss.” The district court had interpreted Van Buren v. United States as requiring plaintiffs to allege a technological harm, such as damage to data or systems, to recover under the CFAA. The Tenth Circuit rejected that interpretation, explaining that Van Buren addressed what conduct constitutes a CFAA violation, not the scope of recoverable loss once a violation has occurred.

Under the statute’s plain language, “loss” includes reasonable costs incurred in responding to an offense or conducting a damage assessment. Moxie’s allegations that it spent more than $5,000 investigating the unauthorized access (specifically identifying the perpetrators, methods, and scope of access) fell squarely within that definition. The Tenth Circuit emphasized that investigative costs aimed at understanding the breach itself are recoverable, even absent data corruption or system impairment.

Discovery rulings affirmed

The Tenth Circuit affirmed the district court’s denial of Moxie’s motions to compel expansive damages discovery. While acknowledging that some requested information could be relevant, the Court concluded that the district court acted within its discretion by limiting initial disclosures and inviting more targeted follow-up discovery. Moxie’s failure to pursue narrower discovery after the district court’s ruling weighed against a finding of abuse of discretion.

Trade secret and RICO claims

The Tenth Circuit agreed that Moxie failed to establish causation sufficient to sustain its RICO claim or to recover unjust-enrichment damages under the DTSA and UTSA. Evidence showing that Aptive sought Moxie’s data, used it in recruitment meetings, and experienced revenue growth during the same period amounted to correlation, not proof that the misappropriation caused Aptive’s profits. Without evidence tying the stolen data to actual financial gain, unjust-enrichment theories failed.

However, the [...]

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No specifics, no case? DTSA trade secret disclosure timing differs from CUTSA

by Jodi Benassi | Aug 21, 2025 | Trade Secrets

The US Court of Appeals for the Ninth Circuit found that a district court abused its discretion by striking several of the plaintiff’s trade secrets, concluding that the court improperly relied on Rule 12(f) and failed to support dismissal as a discovery sanction under Rule 37. The Court emphasized that the fact-specific question of “reasonable particularity” in Defend Trade Secrets Act (DTSA) cases is generally reserved for summary judgment or trial, not for resolution at the discovery stage. Quintara Biosciences, Inc. v. Ruifeng Biztech, Inc., et al., Case No. 23-16093 (9th Cir. Aug. 12, 2025) (VanDyke, Johnstone, JJ., Christensen, Dist. J.)

Quintara and Ruifeng are DNA sequencing analysis companies that engaged in a business arrangement. The relationship soured when Quintara alleged that Ruifeng locked Quintara out of its office, took possession of its equipment, and hired Quintara employees. Quintara sued Ruifeng under the DTSA for misappropriating nine trade secrets.

During discovery, Ruifeng moved for a protective order to pause proceedings until Quintara identified its trade secrets with reasonable particularity, as required by the California Uniform Trade Secrets Act (CUTSA), Cal. Civ. Pro. Code § 2019.210, the California version of the DTSA. The district court agreed with Ruifeng and ordered Quintara to disclose each allegedly misappropriated trade secret with reasonable particularity. Quintara filed an amended trade secret disclosure, but Ruifeng found it deficient and again moved to halt discovery. To resolve the impasse, the district court gave Ruifeng a choice: either accept the disclosure and proceed with discovery, or move to strike the disclosure, withhold discovery, and risk consequences if the motion failed. Ruifeng chose the latter and moved to strike Quintara’s trade secrets in the disclosure under Fed. R. Civ. Pro. 12(f).

Citing its broad discretion over discovery and Fed. R. Civ. Pro. 16, the district court granted Ruifeng’s motion, holding that Quintara failed to comply with § 2019.210. As a result, the court struck nine of the 11 trade secrets from the disclosure, effectively dismissing Quintara’s misappropriation claims as to those trade secrets. Quintara appealed.

The question before the Ninth Circuit was when in the litigation, and with what level of particularity, a plaintiff under the DTSA must identify its alleged trade secrets. The Court began by noting that CUTSA requires a plaintiff to identify the alleged trade secret with “reasonable particularity” before discovery begins. In contrast, the federal DTSA imposes no such requirement regarding the timing or scope of trade secret identification. Instead, DTSA cases proceed under the Federal Rules of Civil Procedure, which do not require plaintiffs to specify their trade secrets with particularity at the outset of the case. The Court explained that under the DTSA, a plaintiff must demonstrate that the claimed trade secret is described with sufficient particularity to distinguish it from general knowledge in the industry or from the specialized knowledge of those skilled in the trade. At an early stage of litigation, particularly when no discovery has yet occurred, it is not fatal to a plaintiff’s claim if the trade secret disclosure [...]

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What’s Shaking? Not an Interlocutory Appellate Decision on Damages

by Tessa Kroll | Jan 30, 2025 | Trade Secrets

The US Court of Appeals for the Fifth Circuit dismissed and remanded a district court certified interlocutory appeal concerning the standard for calculating a reasonable royalty under the Defend Trade Secrets Act (DTSA). The Court explained that the rate instruction issued by the district court was erroneous because the parties had not yet gone to trial and the plaintiff had not yet proven liability. Therefore, the issue of damages might never arise. Silverthorne Seismic, L.L.C. v. Sterling Seismic Servs., Ltd., Case No. 24-20006 (5th Cir. Jan. 3, 2025) (Smith, Clement, Higginson, JJ.) (Higginson, J., dissenting).

Silverthorne licensed seismic data to Casillas Petroleum Resource Partners II, LLC, an oil and gas exploration company. Under this arrangement, Silverthorne provided data to Sterling, a seismic data processer, which processed the data and sent it to Casillas. Because Sterling’s data processing required more data than what Casillas had paid for, Sterling was only permitted to forward the data that Casillas had licensed. However, Sterling sent Casillas unlicensed data, which Casillas allegedly showed to potential investors.

Silverthorne sued Sterling for trade secret misappropriation under the DTSA and sought reasonable royalties for Sterling’s improper disclosure. Shortly before trial, the district court issued an order adopting the Fifth Circuit’s definition of “reasonable royalty” in University Computing (1974), which, in this case, would have required Silverthorne to prove what the parties “would have agreed to for . . . use [of] the alleged trade secret.” University Computing predates the DTSA, which provides for reasonable royalties for “disclosure or use of a trade secret.” Silverthorne appealed the order, noting that it would not be able to prove what Sterling would have agreed to pay to use the data, since Sterling was a data processor and not an end user. The district court certified the following question for appeal:

[W]hether a plaintiff is entitled to prove reasonable royalty damages under the DTSA using willing buyer(s) detached from the parties to the litigation when willing buyers (here, oil and gas exploration companies) exist for plaintiff’s alleged trade secret (here, seismic data), but the defendant and comparable entities (here, seismic processors) do not buy or license that trade secret.

An administrative panel of the Fifth Circuit granted leave to appeal.

Majority Opinion

The Fifth Circuit dismissed the appeal as not involving a controlling question of law. The Court explained that interlocutory appeals are only permitted where an order involves a controlling question of law, the resolution of which would materially and immediately affect the outcome of litigation in the district court. The Fifth Circuit emphasized that a question is not controlling just because the answer would complicate a litigant’s ability to make its case or because the answer could save the parties from a post-judgment appeal. Applying these principles, the Court reasoned that damages issues generally do not control a case until the plaintiff establishes liability, unless the damages issue would be dispositive. Because Silverthorne had not yet established liability and was not barred from proving damages under the district court’s definition [...]

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One Bite at the Apple Where State and Federal Jurisdiction Is Concurrent

by Abigail A. Rubinstein | Aug 15, 2024 | Trade Secrets

The US Court of Appeals for the Second Circuit upheld a federal district court’s dismissal of a case on res judicata grounds after a state court issued a decision on different claims but had concurrent jurisdiction over the claims alleged in the federal case. Beijing Neu Cloud Oriental Sys. Tech. Co. v. Int’l Bus. Machs. Corp., Case No. 22-3132 (2d Cir. July 25, 2024) (Livingston, Menashi, Kahn, JJ.)

Beijing Neu Cloud Oriental System Technology filed suit in federal district court against several International Business Machines companies (collectively, IBM defendants) asserting a single claim for trade secret misappropriation under the Defend Trade Secrets Act (DTSA). Shortly thereafter, Neu Cloud also sued the IBM defendants in New York state court, alleging state law causes of action for unfair competition, unjust enrichment, breach of fiduciary duty, breach of contract and tortious interference.

The state court dismissed the claims. After the state court issued its decision, the IBM defendants moved to dismiss the federal action, arguing that:

Neu Cloud’s claim was time-barred.
Neu Cloud failed to state a plausible DTSA claim.
The judgment of the New York Supreme Court precluded the instant DTSA claim under res judicata.

The district court granted the motion to dismiss, agreeing with the IBM defendants on the DTSA claims but not on the effect of res judicata. Neu Cloud appealed the dismissal of its complaint. The Second Circuit only considered the arguments related to the IBM defendants’ res judicata defense.

Applying New York law to determine the preclusive effect of the state court’s judgment, the Second Circuit explained that under New York preclusion law “a party may not litigate a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter.” This rule applies if the subsequent claim was “actually litigated” in the prior action or if it merely “could have been raised in the prior litigation.”

The Second Circuit found that the district court’s decision was on the merits and the trade secret claims could have been raised in the state court action. The Court held that the New York state court would have been competent to adjudicate the DTSA claim since jurisdiction for DTSA actions is not exclusive to federal courts. The Court noted that the plain text of the DTSA is strong evidence that Congress intended for jurisdiction over DTSA claims to be federal and state concurrent. Moreover, the Second Circuit found that the legislative history revealed no evidence that Congress affirmatively intended to confer exclusive jurisdiction over DTSA claims on the federal courts. The Court noted that many other circuit courts had come to the same conclusion.

Since the parties were clearly the same, the state court case involved the same subject matter, and the claims alleged the same injury and arose out of the same or related facts, the Second Circuit stated that the relevant question was whether Neu Cloud should have sought recovery in state court for its claim of trade secret [...]

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E for Effort? PI Analysis in Trade Secret Suit Riddled With Errors

by Tessa Kroll | Jun 27, 2024 | Trade Secrets

The US Court of Appeals for the Federal Circuit reversed the granting of a sweeping preliminary injunction (PI) in a trade secret suit against a competitor, finding that the district court’s analysis failed to consider potentially dispositive issues and the requirements of the Defend Trade Secrets Act (DTSA). Insulet Corp. v. EOFlow, Co., Case No. 24-1137 (Fed. Cir. June 17, 2024) (Lourie, Prost, Stark, JJ.) Among other things, the district court:

Failed to consider whether the plaintiff’s claims were time-barred.
Used an incorrect definition of “trade secret.”
Based its irreparable harm analysis on an unsubstantiated fear of a competitor’s potential acquisition of the defendant.
Failed to meaningfully assess the balance of harm and the public interest factors.

Insulet and EOFlow are medical device manufacturers that make insulin pump patches. Insulet began developing its OmniPod product in the early 2000s and launched next-generation models in 2007 and 2013. EOFlow began developing its own insulin pump product, the EOPatch, in 2011 and began work on its second-generation product in 2017. Around the time that EOFlow began developing its second-generation device, four Insulet employees joined EOFlow.

In early 2023, Medtronic allegedly started a diligence process to acquire EOFlow. Shortly thereafter, Insulet sued EOFlow for trade secret misappropriation, seeking an injunction to bar all technical communications between EOFlow and Medtronic. The district court granted Insulet’s request, finding that Insulet was likely to succeed on its trade secret claim because EOFlow had hired former Insulet employees who retained Insulet’s confidential documents, and Medtronic’s intended acquisition of EOFlow would cause irreparable harm to Insulet. The injunction broadly prevented EOFlow from “manufacturing, marketing, or selling any product that was designed, developed, or manufactured, in whole or in part, using or relying on the Trade Secrets of Insulet.”

EOFlow appealed the injunction. EOFlow argued that the district court failed to address whether Insulet’s claim was time-barred under 18 U.S.C. § 1836(d) of the DTSA and to consider factors relevant to Insulet’s likelihood of success or meaningfully assess the balance of harm and public interest factors.

The Federal Circuit first observed that the district court had expressed no opinion regarding EOFlow’s § 1836(d) statute of limitations (SoL) argument, even though Insulet’s compliance with the SoL was a material factor that would significantly impact Insulet’s likelihood of success. This alone constituted an abuse of discretion meriting reversal.

The Federal Circuit found that even if the district court had addressed the SoL, the injunction was not adequately supported. The Federal Circuit explained that the district court had improperly and broadly defined “trade secret” as “any and all Confidential Information of Insulet,” where “Confidential Information” was defined by the district court to mean any materials marked “confidential” as well as any CAD files, drawings or specifications. The Federal Circuit explained that the district court should have required Insulet to define the allegedly misappropriated trade secrets with particularity. Instead, the district court allowed Insulet to “advance a hazy grouping of information” and stated that “it would be unfair to require at [...]

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Sorry—No Finality, No Injunction, No Appellate Jurisdiction

by Kyle Sorenson, PhD | Nov 9, 2023 | Trade Secrets

The US Court of Appeals for the Third Circuit dismissed an appeal from the denial of a motion under the Defend Trade Secrets Act (DTSA) for an ex parte seizure order, explaining that such orders are not final, not effectively injunctive and that the DTSA does not independently provide appellate jurisdiction to review such orders. Janssen Prod., L.P. v. eVenus Pharms. Lab’ys Inc., Case No. 22-2426 (3d Cir. Oct. 17, 2023) (Porter, Freeman, Fisher, JJ.)

In 2015, the US Food & Drug Administration (FDA) approved Janssen’s drug Yondelis—a stable, injectable version of the cancer drug trabectedin—for use in certain cancer patients. Janssen asserts that its data, specifications and methods for manufacturing Yondelis are trade secrets. After Janssen received FDA approval for Yondelis, eVenus sought FDA approval for a generic version of Yondelis. Janssen filed a lawsuit against eVenus (under the Hatch-Waxman Act) for patent infringement. During discovery, Janssen obtained documents that allegedly demonstrated that eVenus misappropriated Janssen’s trade secrets. Janssen then filed the current lawsuit against eVenus seeking relief for eVenus’s alleged trade secret misappropriation under the DTSA.

During discovery, Janssen found that eVenus spoliated evidence. In response, Janssen filed a motion for an ex parte seizure under the DTSA, requesting that the district court order the seizure of eVenus’ network servers and stored data, and the laptops and cell phones of certain eVenus employees and ex-employees. The district court denied Janssen’s ex parte seizure motion. Janssen appealed.

The Third Circuit dismissed the appeal, concluding that it lacked jurisdiction over Janssen’s appeal for two reasons.

First, the Third Circuit found that it lacked appellate jurisdiction because the district court’s denial of Janssen’s ex parte seizure motion was not a final judgment and did not meet any of the limited exceptions to the final judgment rule.

One limited exception to appellate jurisdiction under the final judgment rule is review of a lower court’s refusal to order injunctive relief. However, as the Third Circuit explained, an ex parte seizure order under the DTSA is not effectively injunctive and therefore does not fall under the injunction exception. The Court explained that refusal to grant an ex parte seizure order does not satisfy the first two prongs of the Court’s three-part functional injunction test, which require that an order be “directed to a party” and may be enforced by contempt. Regarding the first prong, the Court noted that DTSA seizure orders are not “directed to a party” because the DTSA requires law enforcement officials—and not a party—to execute any ex parte seizure order. Regarding the second prong, no party can be held in contempt for failing to comply with an order that does not direct it to do anything. Therefore, the district court’s order did not effectively deny an injunction.

Second, the Third Circuit analogized DTSA seizure orders with seizure orders under the Lanham Act in terms of statutory construction. As the Court explained, in the Lanham Act, ex parte seizure provisions are part of its “injunctive relief” section. In contradistinction, Congress did not [...]

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