Don’t Underestimate the Value of your Trade Secrets and Other Know-How
by Michael Antone, IP Attorney
The recent decision in the Insulet v. EOFlow lawsuit (USDC Mass,1:23-cv-11780-FDS) awarding Insulet $452 million in damages for trade secret theft provides a vivid reminder of the value of trade secrets and the need to protect them.
All businesses have know-how including trade secrets regarding how they operate their business, which can represent a valuable business asset. However, the value of trade secrets and other know-how can often be discounted by businesses and not adequately protected, perhaps due to its ubiquitous, yet ambiguous, nature and the fact that it is not registered with any governmental authority as is the case with patents, trademarks, and copyrights.
The Massachusetts jury award included $282 million in punitive damages to Insulet, a medical device company that makes insulin management systems for those living with diabetes, based on the jury findings that EOFlow hired Insulet employees with the intent to obtain Insulet trade secrets. The result of EOFlow’s actions was a competitive tubeless insulin pump that was described by Insulet in its complaint as “virtually indistinguishable” from Insulet’s Omnipod product. As an aside, the allegations in this lawsuit most likely contributed to Medtronics’ termination of its planned $738 million acquisition of EOFlow.
Trade secrets and other confidential information must be protected by a business via contracts with the business’ vendors, customers, contractors, and employees. Non-disclosure agreements (“NDA”) and confidentiality provisions in other agreements are used by businesses to protect their confidential information. Without the proper terms in these agreements, a business may not have adequate protection for its trade secrets and other confidential information.
If you have any questions about whether your business has the proper agreements in place to adequately protect your trade secrets and other confidential information, please use our contact form to connect with the Nemphos Braue team.
