Authored by: Jeremy J. Gustrowsky
A recent decision highlights the high bar companies must clear to win a preliminary injunction in trade secret cases. Insulet Corp., a maker of wearable insulin pumps, had obtained a sweeping court order blocking competitor EOFlow from making or selling products allegedly developed using Insulet’s confidential information. However, the appeals court reversed that order, finding the lower court failed to clearly identify what specific information actually qualified as a trade secret and did not properly consider whether Insulet’s claims were even timely.
The court emphasized that to get a preliminary injunction plaintiffs must show not only a likelihood of success on the merits, but also that they will suffer irreparable harm without the injunction, that the balance of harms favors them, and that the public interest is not harmed. Here, the court found Insulet’s definition of “trade secrets” was overly broad, essentially covering any information marked confidential or any technical drawing it had created. The court said that’s not enough: the company needed to pinpoint exactly what information was secret, valuable, and not generally known or easily reverse-engineered.
The court also criticized the lower court for not considering whether the information was already public—through patents, reverse engineering, or online videos—and for not analyzing whether Insulet’s lawsuit was filed within the required three-year window after discovering the alleged misappropriation. On the issue of harm, the court found Insulet’s fears about EOFlow’s potential acquisition by Medtronic and increased competition were speculative and not enough to justify an injunction.
This decision serves as a reminder that trade secret claims require careful, specific proof, especially when seeking to halt a competitor’s business. Companies must be prepared to show exactly what information is secret, how it was protected, and why its loss would cause real, immediate harm—not just vague business worries about future competition.