Insulet Corporation V. Eoflow, Co. Ltd. Et Al

Case Background

On August 3, 2023, Plaintiff Insulet Corporation filed a patent infringement lawsuit and trade secret misappropriation in the United States District Court, District of Massachusetts (Case number: 1:23cv11780). This case was assigned to Chief Judge F. Dennis Saylor, IV, and referred to Magistrate Judge Jessica D. Hedges.

Cause

Insulet Corporation, a pioneer in diabetes management, developed the Omnipod System—a first-of-its-kind adhesive, wearable, and disposable insulin patch pump. This breakthrough eliminated the need for bulky insulin delivery systems. After years of investment exceeding $600 million in research, development, and manufacturing innovations, Insulet’s Omnipod evolved through several generations, culminating in the Omnipod DASH and Omnipod 5.

Defendants EOFlow Co., Ltd., EOFlow Inc., and Flextronics (including affiliates Flex MSM and Flex US), alongside former Insulet employees Luis J. Malave, Steven DiIanni, and Ian G. Welsford, allegedly misappropriated Insulet’s proprietary information. EOFlow, initially unable to produce a viable insulin patch pump, restructured its development strategy in 2016 after hiring former Insulet executives and entering a partnership with Flex, Insulet’s sole manufacturer. Subsequently, EOFlow developed the EOPatch—an insulin patch pump that is allegedly strikingly similar to Insulet’s Omnipod in both design and function.

Injuries

Insulet suffered significant harm due to EOFlow’s actions, including the unauthorized use of its trade secret and intellectual property. EOFlow allegedly gained a competitive advantage by circumventing years of research and development costs through the improper acquisition of Insulet’s proprietary manufacturing processes, designs, and trade secrets.

The resulting EOPatch product not only mirrors the Omnipod in appearance but also infringes on several patents held by Insulet, including the ’741, ’883, and ’950 patents. EOFlow’s planned U.S. market entry and collaboration with Medtronic threaten to cause irreparable harm to Insulet’s market share, reputation, and goodwill.

Damages

Insulet experienced substantial monetary and reputational losses. EOFlow’s misappropriation of trade secrets enabled it to create a competing insulin patch pump at a fraction of the cost and time, undermining Insulet’s competitive edge. The damages include:

  • Loss of exclusivity in the insulin patch pump market.
  • Dilution of Insulet’s trade secrets and patents’ value.
  • Potential revenue loss due to the impending U.S. market launch of the EOPatch.
  • Reputational harm caused by the likely market confusion between Omnipod and EOPatch.

Key Arguments and Proceedings

Legal representation

  • Plaintiff(s): Insulet Corporation
    • Counsel for Plaintiff: Robert D. Carroll | Robert Frederickson, III | Alexandra Lu | Alexandra D. Valenti | Arshjit Raince | Danit Maor | James P. Breen | Jenny Zhang | Matthew Ginther | Scott T. Bluni | Timothy Keegan | William E. Evans
  • Defendant(s): Eoflow Co., Ltd. | Eoflow, Inc. | Luis J. Malave | Steven DiIanni | Ian G. Welsford
    • Counsel for Defendants: John C. Bostic | Michael Sheetz | Adam S. Gershenson | Alexandra Mayhugh | Dustin Knight | Elizabeth M. Flanagan | HanByul Chang | Hankil Kang | Isabel Lily Catanzaro | John Wray | Jordan Landers | Kimberley A. Scimeca | Kyung Taeck Minn | Matthew Oliver | Mead Lowell | Reuben H. Chen | Zachary Sisko

 Claims

Insulet filed a multi-faceted lawsuit against the defendants, asserting claims for in a Trade secret lawsuit:

  • Misappropriation of Trade Secrets under the Defend Trade Secrets Act (DTSA), alleging that EOFlow, Flex, and individual defendants unlawfully accessed, disclosed, and utilized proprietary information.
  • Patent Infringement, specifically citing violations of the ’741, ’883, and ’950 patents, which protect the Omnipod’s unique design and functionality.
  • Breach of Contract by Flex for disclosing Insulet’s proprietary information in violation of confidentiality agreements.
  • False Designation of Origin and Trade Dress Infringement under the Lanham Act, arguing that EOFlow’s EOPatch mimics Omnipod’s distinctive design, causing market confusion.
  • Unfair Competition under Massachusetts law, citing willful and malicious actions to undermine Insulet’s business.

Through this lawsuit, Insulet seeks injunctive relief, monetary damages, and a declaration of the defendants’ infringements to protect its intellectual property and market position.

Defense

The defendants, EOFlow Co., Ltd., EOFlow Inc., and Jesse J. Kim, denied all allegations in Insulet Corporation’s Second Amended Complaint, including claims of trade secret misappropriation, patent infringement, and breach of contract. They asserted that Insulet’s accusations lacked merit and rejected its demands for relief, maintaining that EOFlow operated lawfully and ethically.

EOFlow emphasized that its EOPatch technology was independently developed and distinct from Insulet’s Omnipod system, utilizing a unique pumping mechanism. While acknowledging hiring former Insulet employees, EOFlow denied that any confidential or proprietary information was disclosed or used in its product development. The company also highlighted its legitimate partnerships, including its collaboration with Flextronics, as compliant with all legal and contractual obligations.

The defendants argued that EOFlow’s product development success stemmed from its innovation, research investments, and manufacturing efficiency, not stolen trade secrets. They maintained that any similarities between the EOPatch and Omnipod were coincidental, reflecting the functional requirements of similar diabetes management devices rather than intentional copying.

EOFlow further claimed that its regulatory filings and patent applications demonstrated independent development, refuting Insulet’s assertions of intellectual property theft as baseless. They described the lawsuit as an unfounded attempt to stifle competition and sought dismissal of all claims.

By defending the originality of their practices and products, EOFlow aimed to establish that Insulet’s accusations were unsupported and unfair. The defendants reserved the right to challenge any further allegations during litigation.

Jury Verdict

On December 3, 2024, the jury awarded Insulet Corporation a total of $452 million in damages following its lawsuit against EOFlow. This included $170 million in compensatory damages for the harm caused by EOFlow’s misappropriation of Insulet’s trade secrets. The jury also found that EOFlow’s actions were willful and malicious, leading to an additional $282 million in exemplary damages in a Trade secret lawsuit.

Court Documents:

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