No Evidence, No Injunction; Federal Circuit Vacated Preliminary Injunction for Lack of Evidence

In Insulet Corp. v. EOFlow Co., Ltd., No. 2024-1137 (Fed. Cir. June 17, 2024), the Federal Circuit vacated a preliminary injunction for lack of evidence showing a likelihood of success and for ignoring aspects of the preliminary injunction analysis.

Insulet and EOFlow make wearable insulin pump patches. Four former Insulet employees joined EOFlow in 2017. EOFlow subsequently received approval to sell pumps abroad and, in 2023, engaged in acquisition talks with Medtronic. Insulet sued EOFlow in early 2023 for trade secret misappropriation and sought an injunction against EOFlow’s products and a restraining order to prevent technical communications with Medtronic.

In August 2023, the district court restrained EOFlow from disclosing technical information, and in October granted a “sweeping” preliminary injunction preventing manufacturing, selling, or marketing of any product designed, developed, or manufactured using Insulet’s trade secrets. The district court relied heavily on its findings that the former Insulet employees had retained confidential documents and that EOFlow’s potential acquisition caused Insulet irreparable harm. The court defined the misappropriated trade secrets as “any and all Confidential Information of Insulet,” including technical documents not marked confidential.

The Federal Circuit vacated and remanded. It first found the district court ignored evidence that the statute of limitations may have passed. It further held the injunction overbroad for failing to identify specific trade secrets or consider whether Insulet had protected them. It next found the district court overlooked information that the alleged trade secrets could be reverse-engineered from public disclosures and the Insulet product itself. Additionally, the Court held the district court conflated Insulet’s likelihood of success with irreparable harm to EOFlow, relied on conjecture when assessing that harm, and failed to analyze the injunction’s impact on the public.  The Court noted it had not found Insulet cannot ultimately succeed, but only that Insulet had not proven the elements required to obtain a preliminary injunction.