D. Mass. Patent Litigation Update: April 2025

This is part of a series of articles discussing recent orders of interest issued in patent cases by the United States District Court for the District of Massachusetts.

In Insulet Corporation v. EOFlow, Co., Ltd. et al., No. 23-11780-FDS, Chief Judge Saylor resolved post-trial motions filed after a month-long jury trial. At trial, six defendants were found liable for misappropriation of trade secrets in violation of the Defend Trade Secrets Act, and Plaintiff was awarded $452 million in damages. The trade secrets at issue concerned the design and manufacture of an insulin patch pump produced by Plaintiff.

Plaintiff’s motion for permanent injunction was granted in part and denied in part, and Defendants’ motion for a stay of judgment was granted in part and denied in part.

Permanent Injunction

First, the Court considered Plaintiff’s motion seeking a permanent injunction: (1) prohibiting Defendants from using its trade secrets worldwide; (2) reassigning some of Defendants’ patents; (3) disgorging a fee due to Defendants from a non-party; and (4) granting auditing rights to ensure Defendants’ compliance.

The Court applied the four-factor test used for determining whether a permanent injunction should issue. The Court found that (i) Plaintiff would face irreparable harm, noting that a Defendant had already attempted to profit from the stolen trade secrets by entering into a sale with Plaintiff’s competitor; (ii) money damages were an inadequate remedy because Defendants’ financial condition made it highly unlikely that they would satisfy the jury award; (iii) the balance of the equities favored Plaintiff considering that Defendants were free to develop another product through legal means, whereas Plaintiff would face a substantial burden if forced to compete with a product developed using its own misappropriated trade secrets; and (iv) the public interest in providing robust protection of trade secrets all weighed in favor of granting a permanent injunction.

Having concluded that a permanent injunction should issue, the Court considered the scope of the requested injunction finding that a worldwide, permanent injunction was justified. The Court explained that the Defendants could readily attempt a sale to a foreign competitor and that there was no evidence the trade secrets could be reverse-engineered in any specific period of time. In view of expert testimony that Defendant’s patent application describes proprietary aspects of Plaintiff’s misappropriated trade secrets, the Court concluded that equitable reassignment was justified to prevent continued use of the trade secrets. Moreover, the Court also agreed that disgorgement of the fee Defendants were to gain as a result of their misappropriation of Plaintiff’s trade secrets and auditing rights were appropriate.

The Court also considered Defendants’ assertion that the permanent injunction, together with the monetary damages award, constituted an impermissible double recovery for Plaintiff. The Court agreed in part, finding that the awards of $25.8 million in unjust-enrichment compensatory damages and $33.6 million in exemplary damages were not duplicative.

Accordingly, the Court issued a permanent injunction, including equitable reassignment, fee disgorgement, and auditing rights, together with a reduced total damages award of $59.4 million.

Stay of Relief

Second, the Court considered Defendants’ motion for a stay of judgment, and separately evaluated the propriety of staying monetary relief and injunctive relief.

With respect to monetary relief, consistent with Local Rule 62.2, the Court stayed the judgment subject to the posting of a bond equal to $65,340,500, which represented the $59.4 million final monetary judgment, $5.94 million in interest, and $500 of costs. The Court noted that no exception to the bond requirement applied.

Turning to the requested stay of injunctive relief, the Court addressed the four-factor standard for evaluating such stays. The Court determined that the first factor, likelihood of success on the merits, was satisfied despite the Court having previously considered and rejected Defendants’ theory of appeal at Summary Judgment. The Court explained that Defendants’ appeal nonetheless raised a substantial question of law given that reasonable minds could differ because the law is not clearly established. In view of the second factor, risk of irreparable injury to Defendants, the Court found that the stay should exclude existing users of Defendants’ product, which would allow Defendants to preserve current revenue throughout the appeal without otherwise benefiting from their misappropriation. As to the remaining factors, risk of harm to other interested parties and public interest, the Court found that those too weighed in favor of granting a partial stay. The partial stay protects Plaintiff from harm because, for example, it prevents Defendants from expanding their sales into new markets. And the public interest is served by allowing current users uninterrupted access to Defendants’ product throughout the appeal.

Accordingly, the Court granted a stay of monetary judgment subject to Defendants posting of a bond and granted a temporary partial exception to the permanent injunction allowing continued sales to existing users of Defendants’ product.

In Globalprivatequity.com, Inc. v. The Debt Exchange, Inc., No. 24-11481-FDS, Chief Judge Saylor granted Defendant DebtX’s motion to dismiss on the basis that the three asserted patents are directed to patent-ineligible subject matter under 35 U.S.C. § 101.

The Court applied the two-step Alice-Mayo framework to determine: (1) whether the asserted patents were directed to an abstract concept and (2) whether the additional elements of the claim were sufficiently inventive to make the idea patent-eligible. The Court treated a single independent claim as representative because, despite its general claim that its patents ought to be treated distinctly, Plaintiff did not meaningfully argue other claims were distinct or contained any limitations that were not present in the representative claim.

Under Alice-Mayo Step One, the Court found that the asserted patents were directed to the abstract concept of “monitoring and transacting in securities not listed on traditional exchanges,” which is a fundamental economic practice. Plaintiff argued that the concept was a patent-eligible “advance in computerized trading of exempt securities” that created new functionality. The Court disagreed, finding that applying the concept of operating an exchange to asset classes not traded on conventional exchanges did not alter the abstract nature of the claims, relying Federal Circuit precedent for the proposition that gathering, analyzing, and displaying of price and valuation data are abstract concepts.

Under Alice-Mayo Step Two, the Court found that Plaintiff failed to show an “inventive concept sufficient to transform the claimed abstract [concept] into a patent-eligible application.” The Court noted that although Alice-Mayo Step Two ordinarily involves factual questions that are resolved in plaintiff’s favor on a motion to dismiss, Plaintiff did not plead any facts about the asserted patents beyond their existence. The Court next considered the asserted patents themselves, finding that because they accomplish the claimed abstract concept using only generic technological components and do not purport to solve any technological or pragmatic problems related to exchanges, they do not contain an inventive concept

Therefore, the Court granted the motion to dismiss for failure to state a claim, finding that the asserted patents were directed to patent-ineligible subject matter under 35 U.S.C. § 101.