236 years ago today, New Hampshire became the ninth state to ratify the Constitution, and the U.S. Government was off and running. During the Constitutional Convention of 1787, both James Madison of Virginia and Charles C. Pinckney of South Carolina submitted proposals that would allow Congress the power to grant copyright for a limited time. (Pinckney’s South Carolina was the first state to enact its own patent law). James Madison wrote in the Federalist, “the States cannot separately make effectual provision” for the protection of invention and so in drafting the Constitution of the United States, responsibility for providing such protection was entrusted to the Congress of the United States. Madison’s and Pinckney’s proposals resulted in Article I, Section 8, Clause 8, which provides:

“The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

The First Congress in 1789 considered patent and copyright legislation. On January 8, 1790, during his first State of the Union, President Washington called on Congress to establish act on the Constitutional authorization, urging Congress to pass legislation designed for “the promotion of Science and Literature” “so as to better educate the public.”

On April 10, 1790, Washington signed into law the first Patent Act, and Samual Hopkins must have been waiting in the lobby because the first United States patent issued to him a few months later on July 31, 1790. The Patent Action of 1790 did not establish a Patent Office, and instead the submissions were examined by a committee, including Thomas Jefferson, that not only decided whether to issue a patent, but for how long (the Patent Act set the maximum term at 14 years). A grand total of three U.S. patents issued in 1790, and a total of 57 patents were issued under the Patent Act of 1790, before it was replaced with the Patent Act of 1793, which among other things, eliminated examination!

On May 31, 1790, Washington signed into law the first Copyright Act. Prior to the passage of the Constitution, several states passed their own copyright laws between 1783 and 1787, the first being Connecticut. This Copyright Act of 1790 granted authors the exclusive right to publish and vend “maps, charts and books” for a term of 14 years, renewable for one additional 14-year term, if the author was alive at the end of the first time. The Copyright Action of 1790 had a longer run than the Patent Act of 1790, being amended in 1802 and 1819, and replaced by the Copyright Act of 1831.

In Insulet Corp. v. Eoflow, Co, Ltd., [2024-1137] (June 17, 2024), the Federal Circuit reversed a preliminary injunction against manufacturing, marketing, or selling any
product that was designed, developed, or manufactured, in whole or in part, using or relying on alleged trade secrets of Insulet.

Insulet and EOFlow are medical device manufacturers that make insulin pump patches. Insulet began developing the wearable insulin pump OmniPod® in the early 2000s. The FDA approved the first OmniPod product in 2005, and a next-generation product, the OPI-2, came onto the market soon thereafter in 2007. Insulet then began work on its next-generation Eros product, which obtained FDA approval in 2012 and commercially launched in 2013.

EOFlow began developing its own flagship product, an insulin pump patch called the EOPatch®, soon after the company’s founding in 2011. The EOPatch received regulatory approval in South Korea in 2017, after which EOFlow began developing its next-generation
EOPatch 2. Around that time, four former Insulet employees joined EOFlow. In 2019 and 2022, respectively, the EOFlow 2 received regulatory approval in South Korea and
Europe, after which it began commercial distribution in those select geographic markets.

After reports surfaced that Medtronic had started a diligence process to acquire EOFlow. Insulet sued EOFlow for violations of the Defend Trade Secrets Act. (“DTSA”), seeking to enjoin all technical communications between EOFlow and Medtronic in view of its trade secrets claims. The district court temporarily restrained EOFlow from “disclosing products or manufacturing technical information related to the EOPatch or Omni[P]od products,” and then granted Insulet’s request for a preliminary injunction.

The Federal Circuit began by noting that trade secrets are an important form of intellectual property that both Congress and the states have deemed worthy of protection. The Founders also recognized the value, as well as the volatility, of an idea kept as a secret. However in evaluating Insulet’s likelihood of confusion, the Federal Circuit noted that the court did not assess the statute of limitations in the context of evaluating Insulet’s likelihood
of success on the merits, the court thus ignored a material factor deserving significant weight, which constitutes an abuse of discretion. If the three-year statute of limitations for filing a DTSA claim had expired, Insulet’s claims would be timebarred and therefore would have no chance of success.

Further, even if the district court had adequately dealt with the statute of limitations issue, that would have been insufficient to support the October 24, 2023 order. As EOFlow further contends, the district court also abused its discretion in its consideration of what constitutes a trade secret. The Federal Circuit quoted the definition of trade secret in the DTSA, and noted that the definition used in the district court’s order was severely overbroad, including “any and all Confidential Information of Insulet” and “any information that contains, derives from, or incorporates such Confidential Information.”

The Federal Circuit also disagreed with the district court’s assessment that “it would be unfair to require at this stage perfection as to the precise number and contours of the trade secrets at issue.”

In order to secure a preliminary injunction, Insulet had to establish the likelihood of its success on the merits for at least one, specifically defined, trade secret. It did not do so. Rather, it advanced a hazy grouping of information that the court did not probe with particularity to determine what, if anything, was deserving of trade secret protection.

Finding that Insulet took measures to protect some unidentified “set of information” is not the same as finding that Insulet took reasonable measures to protect specific information alleged to be a trade secret, such as particular “design drawings and specifications for each physical component and subassembly,” as the DTSA requires.

The Federal Circuit found that because the district court failed to identify any trade secret with sufficient particularity, its analysis of misappropriation necessarily also fails as well.

The Federal Circuit concluded that in view of the failure to address the statute of limitations,
the lack of a tailored analysis as to what specific information actually constituted a trade secret, as well as the finding that it was “hard to tell” what subset of that information
was likely to have been misappropriated by EOFlow, we find that the district court abused its discretion in granting the preliminary injunction.

The Federal Circuit also agreed with EOFlow that the district court’s analysis of irreparable harm and public interest were flawed. The Federal Circuit made a point of stating that it was not deciding that Insulet has failed to adequately allege misappropriation of trade secrets or that it cannot succeed on the merits of its claims, only that Insulet has not proven it was entitled to a preliminary injunction.