Following a jury verdict finding trade secret misappropriation, the District Court for the District of Massachusetts granted-in-part a plaintiff’s motion for a permanent injunction to prohibit defendants from using plaintiff’s trade secrets. The district court further required defendants to reassign to plaintiff patents and patent applications that disclosed or were derived from plaintiff’s trade secrets as part of its equitable relief.
The district court evaluated plaintiff’s request for a permanent injunction based on (1) irreparable harm; (2) whether monetary damages are an adequate remedy; (3) the balance of hardships; and (4) the public interest. The district court found it was undeniable that plaintiff would suffer irreparable harm if defendants could use plaintiff’s trade secrets without restriction. The district court also found that monetary damages were not adequate relief, particularly given the defendants possessed only $24 million in total assets and the jury's award of $452 million already far exceeded that amount. Regarding the balance of hardships, the district court noted that defendants could not escape an injunction simply because their primary source of revenue is an infringing product, nor should a plaintiff be required to compete with a product built on its stolen property—that burden would far outweigh the equities. Lastly, the district court found that the public interest favors robust trade secret protection and promoting innovation, and seeks to deter willful misappropriation.
Having found that plaintiff satisfied the four-part test supporting a permanent injunction, the district court turned to the question of reasonable scope for the injunction. Defendants first argued any injunctive relief should be limited in time to the period that accounts for the “head start” they received from their misappropriation, e.g., three and a half years. The district court rejected this argument, pointing out that no company had been able to develop a competing product, and absent evidence showing that the trade secrets could in fact be independently developed, a permanent injunction was appropriate.
Defendants next objected to the requested reassignment of their patents and patent applications to plaintiff as overbroad and unnecessary. Here again, the district court rejected defendants’ argument. Plaintiff’s expert testified that defendants’ patent application described proprietary aspects of plaintiff’s trade secret that the jury found to have been misappropriated by defendants. In such circumstances, equitable reassignment of defendants’ patents and patent applications is appropriate to prevent improperly rewarding defendants’ use of the misappropriated trade secrets.
The court did, however, limit plaintiff’s relief in two notable ways. First, in light of plaintiff’s election of the permanent injunction and to prevent impermissible double recovery based on the future value of plaintiff’s trade secrets, the court reduced the jury’s award of damages for unjust enrichment to only damages for past avoided costs. Second, defendants were granted a partial stay of the permanent injunction, allowing defendants to continue selling a medical device that incorporated plaintiff’s trade secrets for a limited time to allow existing users of the device to transition to other means of medical care. The court reasoned that this limited stay would prevent irreparable injury to defendants and not substantially injure plaintiff.
Practice Tip: When seeking relief for misappropriation, trade secrets owners should explore all possible manners in which a defendant could be profiting from the trade secrets, including by seeking reassignment of any patent or patent applications filed by the defendant that include the misappropriated trade secrets. Conversely, to avoid potential forfeiture, patent filers should confirm the provenance of the inventions they seek to patent, such as by consulting inventor disclosures and notebooks, and ensure they are not—whether intentionally or inadvertently—patenting another’s trade secrets.
Insulet Corp. v. EOFlow Co., Ltd. et al., Civil Action No. 23-11780-FDS, ECF No. 946 (D. Mass. Apr. 24, 2025)