[00:00:00] Speaker 03: That leads us to our final case this morning, number 25, 1807, Insulet Corporation versus Yield Floal Company Limited. [00:00:08] Speaker 03: Ms. [00:00:08] Speaker 03: Pridler? [00:00:09] Speaker 00: Good afternoon, Your Honors, and may it please the Court. [00:00:13] Speaker 00: The District Court committed a series of legal errors in this case, but two errors were particularly fundamental, one going to liability and one going to damages. [00:00:23] Speaker 00: On liability, the district court was wrong to split from every other court to consider the issue by rejecting the inquiry notice standard of accrual for the statute of limitations in the trade secrets context. [00:00:36] Speaker 00: On damages, the district court's award of avoided cost damages is duplicative of the permanent injunction, which cuts off any ability to use the asserted trade secrets and so already prevents any enrichment to EO flow from having avoided the cost of developing those secrets. [00:00:53] Speaker 00: I want to begin by talking about the statute of limitations issue in this case because it was a central problem that existed from the outset of the case and it's an issue that if it's resolved in our favor would take care of all of the issues we've raised on appeal. [00:01:07] Speaker 03: So you try to get around the Merck case by suggesting there was an established rule before the enactment of the federal statute. [00:01:17] Speaker 03: Could you address that? [00:01:18] Speaker 03: I'm not sure that I see that in maybe one or maybe two court of appeals cases and some district court cases, but I don't see an established practice for inquiry notice. [00:01:34] Speaker 03: under the Uniform Trade Secrets Act? [00:01:36] Speaker 00: Well, absolutely, Judge Dyke. [00:01:38] Speaker 00: I'm happy to address that, and I think it's important to focus not just, of course, on how the courts have interpreted the Defend Trade Secrets Act after it was enacted in 2016, but as your question touched on, also the Uniform Trade Secrets Act, because it's undisputed that Congress, when it enacted the statute, was expressly trying to track the accrual language from the UTSA context, and I think that also makes relevant [00:02:01] Speaker 00: all of the state misappropriation statutes that were likewise modeled on the UTSA. [00:02:06] Speaker 00: And it's not just a case here or there. [00:02:08] Speaker 00: It's not like this was a one-off rule with just a couple of circuits or just a couple of district courts. [00:02:13] Speaker 00: We've cited dozens of cases in our brief that all uniformly held that the statute begins to run at the moment of inquiry notice. [00:02:21] Speaker 00: That is the first moment where the plaintiff perceives that there's a real potential problem here and a reasonable person would start investigating. [00:02:28] Speaker 00: In other words, mere suspicion. [00:02:30] Speaker 00: Well, I think it goes a little beyond their suspicion. [00:02:32] Speaker 00: So it's not just a hunch or blatant speculation, for example. [00:02:36] Speaker 00: But when you have the kind of inquiry notice that the district court recognized existed here, where the plaintiff perceived that there was a product that was, in its own words, a clone of its own product, and specifically tied that to the fact that there were former employees of Insulate who were now employed by EOFLOW, who had had access to all of the asserted trade secrets in this case. [00:02:59] Speaker 00: have recognized that that's not just mere suspicion. [00:03:02] Speaker 00: That's real notice that there's a potential problem. [00:03:05] Speaker 00: And what it does is it triggers this affirmative duty to investigate, because Congress did not want plaintiffs who have that kind of notice to just sit back and sit on their hands and not undertake the most basic steps to try to understand whether they can resolve the problem, what exactly is going on, and to file a suit if necessary to resolve the problem. [00:03:25] Speaker 00: Have you answered Judge Dyke's question yet? [00:03:28] Speaker 03: I didn't think so. [00:03:30] Speaker 03: I mean, I've been saying there are lots of cases, but some of those cases really are not clear that they're applying inquiry notice, like SeaTrak. [00:03:41] Speaker 03: I mean, I'm not sure [00:03:43] Speaker 03: inquiry notice and the discovery rule is all that different. [00:03:50] Speaker 03: Because if you look at some of those cases and see track as an example, what they say is that even under the discovery standard, that if you have access to the trade secrets and there's similarity in the product, that's sufficient to satisfy the discovery [00:04:08] Speaker 03: And one of my questions ultimately is going to be whether that's the situation that we have here. [00:04:18] Speaker 03: statutory standards. [00:04:21] Speaker 01: Yeah, I do. [00:04:21] Speaker 01: I do. [00:04:22] Speaker 01: I guess it's hard for me, and I know there's a lot in their other cases, and it doesn't want to distinguish the cases and what we're talking about. [00:04:30] Speaker 01: One, the Epstein case, I think, receded the statute. [00:04:34] Speaker 01: The other case coming out of Iowa was dealing with a different statute with different language. [00:04:40] Speaker 01: So why don't we look at the statutory language? [00:04:42] Speaker 01: Because that's where I start, begin, and end. [00:04:45] Speaker 01: And I can compare it to the language in Merck and conclude that they're not different. [00:04:50] Speaker 01: But why don't we just look at the DTSA? [00:04:53] Speaker 01: It runs the clock from the date on which the misappropriation is discovered. [00:05:02] Speaker 01: begin and end there. [00:05:03] Speaker 01: And then it adds, or the exercise of reasonable diligence should have been discovered. [00:05:08] Speaker 01: And I don't see daylight, so you can tell me why I'm wrong, between the statutory language and the jury instruction, which is the subject of the challenge this morning in this case. [00:05:18] Speaker 00: Well, sure. [00:05:18] Speaker 00: So let me try to take on both portions of those questions. [00:05:21] Speaker 00: And I want to focus first on the statutory language, because I think the key language here, and this is what provides a relevant distinction from Merck in response to Judge Dyke, [00:05:30] Speaker 00: is the second part of the accrual standard that you just read, Judge Prost. [00:05:33] Speaker 00: That is, the reference to the exercise of reasonable diligence by which the misappropriation should have been discovered. [00:05:40] Speaker 00: So that's Congress writing into this statute an express focus on the exercise of reasonable diligence, which naturally calls to mind conducting an investigation when you're put on notice that there might be a problem. [00:05:51] Speaker 00: And that, in fact, is how the lower courts had routinely interpreted this language in the context under the UTSA and the state misappropriation context, where the statutes did use very similar language. [00:06:02] Speaker 01: And so where did the court go astray in the jury instruction? [00:06:06] Speaker 01: Because the jury did, presumably, and you're not challenging this on a fact basis, the jury looked at this language and said, did they exercise reasonable diligence? [00:06:16] Speaker 01: in the absence of reasonable diligence, would this have not been discussed? [00:06:20] Speaker 01: What's wrong with the language and the instruction? [00:06:23] Speaker 00: So there were two problems with the jury instruction. [00:06:25] Speaker 00: I want to say at the outset that we think that we were entitled to summary judgment on this issue as the district court itself recognized that if it's inquiry notice as we understand it, then this should never have gone to a jury. [00:06:35] Speaker 00: But even just drilling down on the jury instruction, I think there were two critical problems here. [00:06:40] Speaker 00: And the first is that the district court specifically rejected our request to instruct the jury on inquiry notice and instead didn't just stop at the statutory language, but then provided the jury with additional instruction about the kinds of considerations they could take into account that would only be relevant after some point of inquiry notice, after part of the investigation has occurred. [00:07:02] Speaker 00: So I think that was one problem. [00:07:03] Speaker 00: The second problem is that the district court specifically said that jurors should think about a hypothetical reasonably diligent company and not look at the actual actions of insulate in this case. [00:07:15] Speaker 00: And that's error two under the inquiry notice standard because courts have uniformly recognized both before and after enactment of the DTSA that this is a standard that creates an affirmative duty by Congress on trade secret owners [00:07:28] Speaker 00: to actually do something when they perceive the kind of problem that gives rise to inquiry notice. [00:07:33] Speaker 00: So I think that that was a problem also in the jury instructions, because the district court could have misled jurors into thinking that they should just hypothesize about what a speculative investigation would have looked like. [00:07:44] Speaker 00: And instead, they were never prompted to think about insulate's actual lack of reasonable diligence here. [00:07:50] Speaker 00: There were all kinds of things that Insulate could have done at the moment that it recognized the similarity of the products and said, this is a clone. [00:07:57] Speaker 00: It was sounding alarm bells internally. [00:07:59] Speaker 00: And when it also recognized that its former employees, who had been centrally involved in the design of the product, were now working at EOflow and were centrally involved in the design of the computing product. [00:08:10] Speaker 00: They could have, for example, checked their own access logs or files to see if they could discern whether information had been misappropriated. [00:08:17] Speaker 00: They could have come to EOFLOW and reached out to those former employees and given them a reminder of their confidentiality obligations or perhaps asked them, do you have any confidential documents? [00:08:28] Speaker 00: They could have sought the return of those documents. [00:08:30] Speaker 00: They could have sent a cease and desist letter. [00:08:32] Speaker 00: And I think just going back to the case law and looking at how other courts have adjudicated limitations issues in the trade secrets context, the fact pattern here reflects an astonishing level of recognition of a problem, alarm internally. [00:08:48] Speaker 00: Insulet said, we told our lawyers we should try to get samples. [00:08:51] Speaker 00: But then inexplicably, they never undertook some of those basic steps of investigation the courts have provided. [00:08:57] Speaker 01: Let me move you on. [00:08:57] Speaker 01: I don't think this was on your list of what you wanted to cover this morning, and I certainly want to hear the damages, which I think you do call out. [00:09:04] Speaker 01: I don't understand your objection to the jury instruction on reasonable measures. [00:09:10] Speaker 01: What in your view did they do that they shouldn't have done? [00:09:15] Speaker 01: I mean, you talk about a temporal limitation. [00:09:16] Speaker 01: I don't know if you're complaining about. [00:09:18] Speaker 01: I'm not sure what you're complaining about in this instruction, other than the global thing that they put some temporal limitation in. [00:09:24] Speaker 00: So let me try to be clear about our concern about the instruction. [00:09:28] Speaker 00: We think that it's clear under governing law that in a situation like this one, where you have an assertion of a continuing misappropriation. [00:09:36] Speaker 00: So it's not like insulin is just saying this was a trade secret in the past, but when it was misappropriated, but it's kind of fallen out of any veneer of secrecy. [00:09:44] Speaker 00: Instead, when you've got a company that's saying it remains a trade secret to this day, then it's reasonable to look at whether the company is taking reasonable measures to protect the secrecy of the information for the duration. [00:09:56] Speaker 00: And we think that the jury instruction on reasonable measures could have instead erroneously led the jury to think [00:10:03] Speaker 00: that they could only take into account the measures at the time of the initial misappropriation. [00:10:07] Speaker 00: Now, I, of course, acknowledge that the court said you can think about post-misappropriation. [00:10:11] Speaker 01: Well, it talked about, at first, to the alleged misappropriation, which I think is the continuing misappropriation that you're talking about. [00:10:18] Speaker 01: So I'm just not seeing it. [00:10:20] Speaker 01: You want to tell me what's the problem with the exact language? [00:10:23] Speaker 01: It says at the relevant time. [00:10:26] Speaker 00: Yes, so that's exactly it, Judge Prost. [00:10:28] Speaker 00: It's that at the relevant time language because it's suggesting to the jurors that there's a singular pinpoint in time. [00:10:34] Speaker 01: But then it defines relevant time, doesn't define it, but it says, again, it's up to you to determine whether they took reasonable measures to keep the disputed information secret as of the time of the alleged misappropriation. [00:10:46] Speaker 01: Is there anything wrong with that? [00:10:48] Speaker 00: Well, again, I think that in combination with the fact that the district court then referred to the relevant time just a few sentences later, could have naturally led jurors to think that they should consider only the misappropriation, for example, in 2018 with respect to some of the asserted trade secrets. [00:11:03] Speaker 00: and not take into account the lack of reasonable measures, particularly after Insulet perceived the problem and said there might be an IP issue we should investigate, but didn't do anything to protect secrecy. [00:11:15] Speaker 00: I did want to have a chance to briefly address damages, if I could. [00:11:18] Speaker 03: I have one question before we get there. [00:11:19] Speaker 03: Oh, of course. [00:11:21] Speaker 03: Let's assume, hypothetically for the moment, that you lose on inquiry notice point and that we're dealing with a discovery standard. [00:11:28] Speaker 03: The cases, C-Track and others, [00:11:30] Speaker 03: suggest that the fact that you have an access situation, that is access to the trade secrets and similarity in the product is sufficient as a matter of law to invoke the discovery standard. [00:11:48] Speaker 03: You argue, as I understand it, that that's the case here. [00:11:52] Speaker 03: And I'm focusing particularly [00:11:54] Speaker 03: on the cannula trade secret and the Tide files trade secret and to address whether under the discovery standard as a matter of law the evidence compels the finding the discovery standard is satisfied. [00:12:12] Speaker 00: Yes, Judge Dyke. [00:12:13] Speaker 00: So I agree with you entirely in how you've articulated the legal principle, which is that access and similarity can combined create as a matter of law, accrual, even under a discovery standard. [00:12:23] Speaker 00: And here, the evidence with respect to the cannula was that in 2018, so we're now five years before Insulet filed suit, the cannula was prominently advertised at a 2018 trade conference event that Insulet attended [00:12:37] Speaker 00: This is reproduced at page seven of the Blue Brief, where we actually have the poster where the soft canula with that flat nail head design that was alleged to be a trade secret was put on the promotional poster. [00:12:47] Speaker 00: The product itself, which would reflect all of the relevant dimensions in the CAD files, was likewise on display, a prototype at that 2018 conference. [00:12:57] Speaker 00: And the evidence shows, and was undisputed because it's documents, that Insulet went back and said, they've cloned our product. [00:13:04] Speaker 00: It bears a stunning resemblance. [00:13:06] Speaker 00: There were other emails that talked about how it was identical. [00:13:09] Speaker 00: And so I think this evidence demonstrates that Insulet itself perceived the overlap, right? [00:13:14] Speaker 00: So recognized that there was a striking, stunning resemblance and a cloned product. [00:13:19] Speaker 00: And then those very same emails tie it to the fact that there are former high-level people from Insulet who are now working at EOflow. [00:13:27] Speaker 00: And further, in March 2019, so this is a CEO. [00:13:31] Speaker 01: Just to interrupt on one small point, the key person that you're talking about that departed insulate with the documents, he didn't start working there until after the 2018 conference, right? [00:13:40] Speaker 00: No, so there were three relevant employees. [00:13:43] Speaker 01: Yeah, but one of them, Mr. Delany, who is [00:13:46] Speaker 01: featured more prominently than the others in the briefs was not there at the time. [00:13:50] Speaker 01: Just to confirm. [00:13:52] Speaker 00: So he was at least on board by summer 2019 where again the prototype was displayed. [00:13:57] Speaker 00: The advertisement remained constant. [00:13:59] Speaker 00: Insulet actually sent lawyers to that conference and so they again got eyes on the product there. [00:14:04] Speaker 00: And I think it just demonstrates that [00:14:07] Speaker 00: Insulet itself was linking up the fact that there was, in their words, a cloned product with the fact that there was access. [00:14:13] Speaker 00: And this is often the key fact that might be missing or could prevent the claim from accruing. [00:14:18] Speaker 00: Just the fact that you have a similar product might be enough because it could be reverse engineered or something like that. [00:14:23] Speaker 00: But here, what Insulet said internally is, [00:14:26] Speaker 00: hey, our former employees, including very high-level people, are now centrally involved in the design of the competing product. [00:14:34] Speaker 00: And this is a real problem. [00:14:35] Speaker 00: We should pull IP. [00:14:37] Speaker 00: We should get our lawyers involved. [00:14:38] Speaker 00: We should request samples. [00:14:40] Speaker 00: And I think even under the Merck discovery standard, that as a matter of law demonstrates that Insulet was on notice of the claim just as the district court recognized by March 2019. [00:14:52] Speaker 00: May I spend just a minute on damages or I'm happy to answer additional questions about the limitations period? [00:14:58] Speaker 00: So just a quick point on damages because I want to be really clear about the nature of the problem here. [00:15:03] Speaker 00: The district court awarded a permanent injunction which completely locks up the value of the trade secrets and makes sure that EO flow can't receive any benefit from having access to those trade secrets on a going forward basis. [00:15:17] Speaker 00: But then the district court additionally ordered as unjust enrichment damages [00:15:21] Speaker 00: $26 million, which was meant to approximate the full cost of having independently developed all of the relevant trade secrets at issue here on appeal. [00:15:30] Speaker 00: And the reason that those are a duplication is because if you actually spend the cost to develop independently the trade secrets, that's what the $26 million would represent, then what you get with that is the ability to use them going forward. [00:15:43] Speaker 03: That initial investment is- What about the EU and the Korean sales? [00:15:48] Speaker 03: I mean, to some extent, [00:15:50] Speaker 03: those were permitted and occurred and so why isn't the recovery of some of the costs attributed to those appropriate? [00:15:59] Speaker 00: So I don't think that the $26 million of avoided cost damages could possibly try to capture the very limited sales that had occurred in Korea and the EU. [00:16:08] Speaker 00: That was never insolent's theory of damages in this case. [00:16:11] Speaker 00: And in fact, the evidence at trial that was undisputed, this is at appendix 21183 to 84, was that EO flow had from those sales during the relevant time generated only $3 million in revenue [00:16:24] Speaker 00: and actually never any profits. [00:16:25] Speaker 00: Profits were zero because EO Flow had already invested tens of millions of dollars in the development of EO Patch 2 and it didn't have the product on the market long enough to ever recoup that initial investment. [00:16:36] Speaker 00: So I think that shows that you couldn't possibly say that this avoided cost damages measure was meant to try to target those discrete sales and notably Insulate itself, that wasn't its damages theory. [00:16:47] Speaker 00: It was kind of swinging for the fences here and trying to get simultaneously [00:16:51] Speaker 00: permanent injunction that forever bars the ability to use these trade secrets, while also duplicating that by trying to get a monetary award. [00:17:01] Speaker 01: Well, can I add, you talk about duplicating, but I'm going back to the statute again. [00:17:05] Speaker 01: And the statute treats them differently, the remedy. [00:17:07] Speaker 01: It talks about injunctions, it talks about damages for actual losses, and then there's this other category, damages for unjust enrichment. [00:17:16] Speaker 01: And it's talking, it seems to me, so tell me if I'm wrong, [00:17:19] Speaker 01: that unjust enrichment doesn't involve, it's about what the defendant gained. [00:17:25] Speaker 01: It's not what the other side lost. [00:17:27] Speaker 01: Is that kind of a fear characterization of unjust enrichment? [00:17:30] Speaker 00: Yes, with the tweak that sometimes what the defendant gained is meant to try to put a value on what the plaintiff lost. [00:17:37] Speaker 01: Yeah, but it's something different than based on what they lost. [00:17:43] Speaker 01: It's something different. [00:17:44] Speaker 01: And this goes to, I mean, whatever EOFLOW did, and even in the light of a permanent injunction, they derived some benefits, arguably. [00:17:52] Speaker 01: That's the question. [00:17:54] Speaker 01: Did they decrease their research costs? [00:17:57] Speaker 01: Are they decreasing the costs going further, even though the trade secrets themselves are off the table? [00:18:04] Speaker 01: Wouldn't that be a fair characterization of what we're talking about here in terms of avoided damages? [00:18:11] Speaker 00: So conceivably, I think that a trade secret plaintiff could come in and try to prove that type of unjust enrichment. [00:18:17] Speaker 00: But that wasn't Insulet's theory of damages here. [00:18:19] Speaker 00: And I don't see any way to suggest that the full measure of the full amount of what it would cost to independently develop the trade secrets could possibly try to capture that kind of discrete point you're making, Judge Post, about the possibility of some [00:18:34] Speaker 00: marginal enrichment that might have occurred from not immediately putting those costs in upfront. [00:18:39] Speaker 00: I think that would have to be a much lower measure of damages. [00:18:42] Speaker 00: And, you know, it was ultimately Insulet's decision how it wanted to litigate this case and what kind of damages it wanted to pursue. [00:18:48] Speaker 00: I would say as well, you mentioned that the statute contemplates you can have the award of both an injunction and damages, and I think that's true. [00:18:54] Speaker 00: But I'd point the court to the Second Circuit's decision in the Syntel case, and most recently, the Fifth Circuit's decision in the CSC case, which we sent a 28-J letter about. [00:19:04] Speaker 00: Those are the two circuit courts that have most recently considered this issue of possible duplication between these remedies, both under the DTSA. [00:19:12] Speaker 00: And they articulate the relevant principles just as I've described them here. [00:19:15] Speaker 00: They make very clear that you might be able to have those remedies together when, for example, the defendant's use of the trade secrets entirely destroyed their value. [00:19:23] Speaker 00: So there is some additional harm to the plaintiff that you need to account for, or when you might be able to possibly measure, just as you touched on Judge Prost, that discrete period of time before the injunction issued. [00:19:34] Speaker 00: But neither of them said you could award the full cost of avoided cost damages. [00:19:38] Speaker 00: Can I cover one more issue before we leave? [00:19:41] Speaker 01: on the DHF. [00:19:43] Speaker 01: Another major issue, at least for me in this case, is whether or not that satisfied the definition of trade secrets. [00:19:49] Speaker 01: Now, DHF is not included in this $29 million, right? [00:19:54] Speaker 00: That's right. [00:19:54] Speaker 00: That's not going to be affected by our conclusion. [00:19:57] Speaker 01: How would the injunction be affected, if at all, if we were to conclude [00:20:05] Speaker 01: against you on all the other issues, but that that was not a trade secret. [00:20:10] Speaker 01: What does that do to the actual injunction? [00:20:12] Speaker 00: I think what that would mean is that the portion of the injunction that prohibits EO flow from using the DHF on a going forward basis would have to be removed from the injunction. [00:20:22] Speaker 01: Is there an overlap between that and the other categories of trade secrets? [00:20:26] Speaker 01: I imagine there is, right? [00:20:26] Speaker 00: Yeah, there is. [00:20:27] Speaker 00: So the three other assorted trade secrets were alleged to be part of the DHF. [00:20:31] Speaker 00: You know, one of the problems here is that we don't actually know exactly what the DHF encompasses. [00:20:36] Speaker 00: In fact, that's our argument about how it wasn't sufficiently defined for the jury. [00:20:39] Speaker 00: No, I understand. [00:20:40] Speaker 00: I appreciate that. [00:20:41] Speaker 00: But Insulate has alleged that the DHF extended far beyond those three other assorted trade secrets and encompassed [00:20:47] Speaker 00: encompasses all of the accumulated product knowledge. [00:20:50] Speaker 01: So do you think that's something, if that were the conclusion, the district court would have to sort, it would be up to the district court to sort out? [00:20:55] Speaker 01: There's no way we can do that here. [00:20:57] Speaker 00: Well, right. [00:20:57] Speaker 00: So I think at that point, if you agree with us, that that, as a matter of law, did not sufficiently define the trade secret. [00:21:02] Speaker 00: And of course, last time this case was before this court, it was a similar problem, where it was just a hazy grouping of information that was advanced as an asserted trade secret. [00:21:11] Speaker 00: then I think the Court could say as a matter of law that this should not have been submitted to a jury and where no reasonable juror could have concluded this is protected and reverse on that basis with respect to the DHF. [00:21:22] Speaker 00: Of course, we'd hope for the Court to reverse with respect to all of the issues. [00:21:27] Speaker 02: Sure. [00:21:27] Speaker 02: Kelsa, could you make just a brief comment on the DHF, whether or not it's a trade secret? [00:21:34] Speaker 00: Absolutely. [00:21:34] Speaker 00: I appreciate the chance to do so, Judge Raina. [00:21:37] Speaker 00: So the problem with the DHF as an asserted trade secret is that the outer meets and bounds of exactly what Insulet was claiming to be secret were never precisely defined for the jury or for us. [00:21:48] Speaker 00: This was kind of a shape shifting trade secret throughout the course of the proceedings below. [00:21:52] Speaker 00: But by the time we got to trial, Insulet tried to claim that an exhibit that they introduced, exhibit 2177, was the DHF. [00:22:00] Speaker 00: The problem with that is that their own witness, Julie Perkins, who testified about that asserted trade secret, acknowledged that the thing that was exhibited in court was only parts of the DHF. [00:22:11] Speaker 00: She conceded that there were certain parts of the DHF that were apparently within the trade secret definition, but were not included in the exhibit, including things like test protocols, test reports, [00:22:22] Speaker 00: standard operating procedures and so forth. [00:22:25] Speaker 00: So that meant that the thing in court was not the DHF. [00:22:27] Speaker 00: Now Insulet's other argument has been that there's a regulatory definition of a DHF, so that gives notice. [00:22:33] Speaker 00: But the problem with that is, again, the thing that was claimed to be the trade secret DHF [00:22:39] Speaker 00: does not correspond to the regulatory definition. [00:22:41] Speaker 00: For example, the standard operating procedures are part of the trade secret DHF but appear nowhere in the regulation. [00:22:48] Speaker 00: And vice versa, there are aspects of the regulation that don't correspond with the categories of information. [00:22:53] Speaker 01: And what is the relevance of the regulation? [00:22:55] Speaker 01: Does the regulation compel that it's a trade secret? [00:22:58] Speaker 01: No, not at all. [00:22:59] Speaker 00: So I understand Insulet to have fallen back on the regulation as a way to try to salvage this claim about the DHS because Insulet recognizes that the exhibit was not complete. [00:23:10] Speaker 00: But the problem with that is that the regulation couldn't provide the sufficient definiteness, especially in a circumstance where the thing alleged to be the trade secret doesn't actually correspond to the regulatory definition when you line those two things up against each other. [00:23:24] Speaker 00: So I think the court could conclude, again, as it did at the P.I. [00:23:26] Speaker 00: stage with respect to a similar problem, that ultimately this amounted to a sweeping claim of protection with respect to all of the product knowledge that went into the Omnipod. [00:23:37] Speaker 00: And that just isn't sufficient to create a precise definition of what was a protectable trade secret here. [00:23:51] Speaker 04: Thank you, Your Honor. [00:23:52] Speaker 04: May it please the Court? [00:23:53] Speaker 04: I do want to begin with jurisdiction, if I may, because we obviously think that whichever Court of Appeals has jurisdiction should affirm the jury's verdict of willful malicious infringement. [00:24:05] Speaker 04: And we've submitted that that is the First Circuit for the simple reason that this case does not arise under the patent laws. [00:24:12] Speaker 04: We amended the complaint that resulted in the district court dismissing the patent claims without prejudice, and that [00:24:21] Speaker 04: this Court has said in cases like Chamberlain, is the test. [00:24:24] Speaker 04: In this case, because you look at the amended bleeding, and you look at whether the amended bleedings arise under patent law, once the patent claims were dismissed without prejudice, this case ceased to arise under patent law. [00:24:38] Speaker 04: So we think the First Circuit has jurisdiction. [00:24:42] Speaker 04: The other side's rule, which is not supported by any case from any circuit, [00:24:47] Speaker 04: this court or any of the regional circuits which also have to confront this issue. [00:24:51] Speaker 04: It would enmesh both this court and the regional circuits in very difficult patent statute of limitations questions just in order to figure out whether they have jurisdiction over any given case. [00:25:02] Speaker 04: Our rule is simple. [00:25:02] Speaker 04: It looks at the face of the judgment [00:25:05] Speaker 04: In this case, the judgment does not bar relitigation of anything. [00:25:08] Speaker 03: It says in both cases, all caps... Well, in fact, no matter, it does, because the statute of limitations is wrong. [00:25:14] Speaker 04: Respectfully, no, Judge Dyke, the judgment does not bar anything. [00:25:18] Speaker 04: The judgment does not bar relitigation of anything, and that is the test. [00:25:22] Speaker 04: And I would dispute the premise that the limitations period has run. [00:25:27] Speaker 04: But the question is, did the district court adjudicate the patent claims? [00:25:32] Speaker 04: Is the judgment that you're reviewing, does it rest in part on patent law? [00:25:38] Speaker 04: It does not, because the district court never answered any question of patent law. [00:25:42] Speaker 04: The claims were stayed for the entire duration of the case. [00:25:45] Speaker 02: Doesn't it matter whether the dismissed rule is a prejudice or not? [00:25:49] Speaker 04: It does. [00:25:50] Speaker 04: And in this case, the dismissal was boldface, all caps without prejudice. [00:25:53] Speaker 04: It's the other side that is asking you to look behind that and say, well, it's really with prejudice because if the claim were asserted and if we timely asserted the statute of limitations, we would win. [00:26:06] Speaker 04: But that is not a proper jurisdictional inquiry. [00:26:10] Speaker 04: And there is no case from this court or any other court. [00:26:12] Speaker 04: that applies that. [00:26:13] Speaker 04: And I would... Well, there are cases that apply that. [00:26:17] Speaker 03: Pardon? [00:26:18] Speaker 03: There are cases that rely on the status of limitations running. [00:26:22] Speaker 04: In the sanctions context, but not the jurisdictional context. [00:26:25] Speaker 04: And you can see why that would make a difference. [00:26:26] Speaker 04: Jurisdictional rules should be clean and easy to apply, especially for the regional circuits when they are confronted with a [00:26:33] Speaker 04: a question of patent statute of limitations. [00:26:35] Speaker 04: If that were the threshold for deciding whether they have jurisdiction, it would really enmesh them in questions that really should be for this court. [00:26:43] Speaker 04: So cases like Sorowski that the other side cited are all about the sanctions context. [00:26:49] Speaker 04: We've pointed that out in our brief. [00:26:51] Speaker 04: I didn't see any response to that in their reply. [00:26:54] Speaker 04: So I disagree that the claim is time-bored. [00:26:57] Speaker 04: But more fundamentally, I disagree that that's the question. [00:27:01] Speaker 04: That should matter for jurisdiction. [00:27:02] Speaker 03: Let's go on to the statute of limitations issue. [00:27:05] Speaker 03: Of course. [00:27:05] Speaker 03: Let's assume, hypothetically, that we agree with you about Merck and that inquiry notice is not the right standard and the discovery standard is correct. [00:27:15] Speaker 03: But at the same time, under cases like Sea Track, access plus similarity is sufficient as a matter of law to satisfy the discovery standard. [00:27:27] Speaker 03: Now here, looking at two of the trade seekers, the cannula trade seeker and the CAD files trade seeker, put aside the other two. [00:27:37] Speaker 03: As I read the record, there is undisputed evidence from EOFL that the trade shows and the prospectus disclosed [00:27:51] Speaker 03: that the product had those features to it. [00:27:56] Speaker 03: And then I looked to see whether there was any evidence to the contrary, and I didn't see any evidence to the contrary. [00:28:03] Speaker 03: So could you address that, Les? [00:28:05] Speaker 04: Absolutely. [00:28:07] Speaker 04: Let me just note parenthetically because you mentioned C-Track. [00:28:11] Speaker 04: I'm not sure that's even a UTSA case because Texas had not adopted the UTSA at that point. [00:28:15] Speaker 04: The point is that like it doesn't apply the same statutory language. [00:28:18] Speaker 04: So we'd be focused on when would you have discovered the misappropriation? [00:28:23] Speaker 03: And so... Do you disagree that access and similarity is sufficient? [00:28:27] Speaker 04: So I think that you should look at cases like so-called from the Seventh Circuit to understand what access and similarity mean, because I think that that could be used imprecisely. [00:28:37] Speaker 03: I thought you were agreeing that that's the right standard. [00:28:40] Speaker 04: Yes, but the question is access to what? [00:28:42] Speaker 04: You have to have access to, because remember that the limitations period is applied trade secret by trade secret. [00:28:49] Speaker 04: That was a contested issue below. [00:28:51] Speaker 04: The district court resolved that in favor of going trade secret by trade secret. [00:28:54] Speaker 04: Your question asks to go trade secret by trade secret. [00:28:57] Speaker 04: And so the question would be, did they have access? [00:29:01] Speaker 04: Did they have access? [00:29:02] Speaker 04: Do we know that they had access to the cannula trade secret? [00:29:06] Speaker 04: Remember that the cannula trade secret is not the existence of a cannula. [00:29:10] Speaker 04: It is not the existence of a soft cannula. [00:29:12] Speaker 04: It's not even the existence of a cannula with a nail head design. [00:29:15] Speaker 04: It's how our cannula is constructed in a precise way to ensure... Well, these former employees had access to it. [00:29:22] Speaker 04: We didn't know that they had the documents with them that they have gave to EO flow to pirate our invention and that's the key point that Miss prelogger suggested that there are things that we could have done She did not suggest that any of them would have given us the necessary information to discover the misappropriation and that's what the focus needs to be on that [00:29:46] Speaker 04: we did not know that they had the cad vials. [00:29:48] Speaker 03: Let's put aside for the moment the access question and focus on the similarity question. [00:29:53] Speaker 03: It is the case with respect to those trade secrets that there is testimony from the EFL witnesses that you could have determined that from the trade show and the prospectus. [00:30:06] Speaker 03: And I'm looking to see [00:30:08] Speaker 03: whether it was contrary testimony from your witness. [00:30:11] Speaker 03: Absolutely. [00:30:11] Speaker 03: I didn't see it. [00:30:12] Speaker 04: From multiple witnesses, including one of the defendants, page 20877. [00:30:16] Speaker 03: Okay, 20, which volume is that? [00:30:19] Speaker 04: 20877 is volume either three or four. [00:30:24] Speaker 04: Four, thank you. [00:30:43] Speaker 04: Right, so I would take you, are you at the page here? [00:30:48] Speaker 04: That's right, so top right hand corner, which is page 111, most of the way down. [00:30:54] Speaker 04: You can't see the method by which the cannula was manufactured by looking at these devices, right? [00:30:58] Speaker 04: I don't think so, no. [00:30:59] Speaker 04: And above that, the same questions for the ODA algorithm, the design history file. [00:31:06] Speaker 03: So recall that the sample at the... Okay, so where's the testimony about the CAD file? [00:31:11] Speaker 03: I'm sorry? [00:31:12] Speaker 03: Where's the testimony about the CAD file? [00:31:14] Speaker 04: Okay, I don't... Mr. Malave didn't testify here about the CAD file. [00:31:19] Speaker 04: Right. [00:31:19] Speaker 04: Right, but the... Let's see. [00:31:27] Speaker 03: Give me... [00:31:28] Speaker 03: I don't understand that the cannula trade secret is limited to the method of manufacturing, right? [00:31:36] Speaker 04: No, I disagree, Your Honor. [00:31:38] Speaker 03: It is just the method of manufacturing? [00:31:40] Speaker 04: It's the precise specifications and method of manufacturing. [00:31:44] Speaker 04: That's right. [00:31:45] Speaker 03: The precise specifications, I mean the dimensions of the cannula. [00:31:48] Speaker 04: So Ms. [00:31:49] Speaker 04: Prelogger suggested, and I do not know what she's basing this on, that you could identify the dimensions of the cannula by going to the trade show. [00:31:59] Speaker 04: That's just not correct, because the device displayed at the trade show had the cannula snipped off. [00:32:05] Speaker 02: I got to deal with the testimony. [00:32:07] Speaker 04: But the testimony was the cannula was snipped off of the version displayed at the trade show. [00:32:13] Speaker 02: There was no cannula. [00:32:14] Speaker 02: When you look at a trade secret, [00:32:17] Speaker 02: In a pharmacy you both what to do and what not to do right it can [00:32:25] Speaker 04: Right, so a number of the trade secrets in this case identified errors and, you know, design problems that Insulet had to solve in developing this invention and spent billions of dollars, hundreds of millions of dollars, you know, developing responses to those issues and compiling them and, you know, amassing that knowledge and including the very precise dimensions. [00:32:49] Speaker 04: So the testimony about the cannula. [00:32:52] Speaker 03: The dimensions of the final product. [00:32:54] Speaker 03: the dimensions of the fundamental product, right? [00:32:57] Speaker 04: Yes, but the testimony, well, Your Honor, the testimony indicates that you could not reverse engineer the information about what it takes to manufacture the cannula from just opening up an omnipod because the cannula is soft, it's flexible, and the dimensions change, actually, as the needle and the cannula are integrated with each other in the manufacture. [00:33:19] Speaker 03: OK, well, let's talk about the cannula. [00:33:22] Speaker 03: Where's the testimony? [00:33:23] Speaker 03: There is testimony that you could determine whether the CAD files have been used in the product. [00:33:30] Speaker 03: What is the testimony that you couldn't figure out whether the CAD file information was in the product? [00:33:40] Speaker 04: I'm not sure. [00:33:42] Speaker 04: I'm not sure I agree with your characterization of what the other side's testimony says, that you could determine that the CAD files had been misappropriated by looking at the product. [00:33:52] Speaker 04: I think their testimony may say that you could see the exterior of the product so that you might- But where's the testimony that you couldn't? [00:33:59] Speaker 04: That you couldn't see the interior? [00:34:01] Speaker 04: There's testimony- I unfortunately don't have the page number for this, but I'll tell you what it says. [00:34:06] Speaker 03: I want the page number. [00:34:08] Speaker 04: Okay, so footnote two of our brief on page five collects a number of page numbers for the proposition that these details, the CAD files, could not be gleaned from examining a physical sample. [00:34:29] Speaker 03: Okay, but you're not able to point us to the page of the appendix. [00:34:35] Speaker 04: You're asking specifically about the CAD files. [00:34:40] Speaker 04: Honestly, I don't understand the other side to have testimony to say that the contents of the CAD files, that it would be knowable by looking at the other side device. [00:34:50] Speaker 04: Because, I mean, recall that the closest that you could come to the other side's device is a foot away. [00:34:57] Speaker 04: The sample that they had had no cannula. [00:35:02] Speaker 04: It had a clear cover, but you still couldn't see all the way inside. [00:35:05] Speaker 04: What the CAD files display are extremely precise dimensions and integrations of parts. [00:35:13] Speaker 04: You couldn't just glance down into a device and the jury heard testimony about what you could and could not see from several feet away looking into this. [00:35:24] Speaker 04: And more importantly, the jury had in front of it [00:35:27] Speaker 04: a sample of the same clear device that was at the trade show. [00:35:33] Speaker 04: I obviously don't have that here with me, but that was passed up and down in front of the jury. [00:35:42] Speaker 04: The question is, what did they have access to, and what similarity was insulate on notice of? [00:35:51] Speaker 04: And I do not think that the other side can point to evidence that says that their [00:35:58] Speaker 04: just looking at their device would give a reasonable observer such indisputable evidence that they had copied not just the exterior, not just sort of like the general configuration, but the interior workings down to the kind of fine degree that is reflected in the CAD files. [00:36:19] Speaker 03: OK, do you want to go on to the amateurs? [00:36:21] Speaker 04: Sure. [00:36:22] Speaker 04: And my friend also referred to the DHS. [00:36:25] Speaker 04: I want to come back to that. [00:36:27] Speaker 03: You go ahead. [00:36:27] Speaker 03: You do that first. [00:36:29] Speaker 04: Either direction. [00:36:30] Speaker 04: Why don't we do damages? [00:36:33] Speaker 04: The basic point on damages is that the other side got their device to the market. [00:36:38] Speaker 04: And I think that your question, Judge Dyck, recognized this, that they got their device to the market both in Korea and in Europe. [00:36:45] Speaker 04: And so that means that when you're looking at what benefit they gained from misappropriating our trade secrets at the moment they were caught, [00:36:56] Speaker 04: They'd already gotten on the market. [00:36:57] Speaker 04: So in other words, if they'd done it themselves without the benefit of the misappropriated inventions, they would have had to spend a lot more money. [00:37:09] Speaker 04: And so I understand that their evidence says that they didn't make a profit. [00:37:13] Speaker 04: Well, lots of medical device companies don't make a profit initially. [00:37:16] Speaker 01: The point is that they avoided costs. [00:37:18] Speaker 01: But what about their sales? [00:37:19] Speaker 01: I mean, how does the $29 million, which was calculated on these three things, how does that dovetail with [00:37:26] Speaker 01: the sales that you mentioned in your big career? [00:37:28] Speaker 04: I think the short version is they lost a lot less money or they were a lot less in the hole when they got onto the market because they were able to skip large portions of the development stage by relying on the trade secrets. [00:37:45] Speaker 04: And so that's why, unlike in cases like Sintel, where the defendant had not actually finished developing its own competing product. [00:37:55] Speaker 04: And so you could, you could discourage the benefit, or sorry, you could prevent them from benefiting from their misappropriation simply by stopping them from continuing to rely on the trade secrets. [00:38:06] Speaker 04: But in the case of a company that's actually gotten a product to market and further caused harm to our trade secrets by, for example, submitting patent applications that would have made our trade secrets public. [00:38:20] Speaker 04: So like the second circuit suggests in Cintel that it should matter whether there's a risk to the owner, in other words, like something tangible damage to the owner of the trade secrets. [00:38:31] Speaker 04: I mean, I think that if you look at the text, those are independent of each other, and I don't think that we're required to show that. [00:38:35] Speaker 04: But if we were required to show that, we did, because of the not just exploitation of our trade secrets, but the risk that they would become public and lose their value. [00:38:45] Speaker 03: The problem is that the district court didn't rely on the foreign sales. [00:38:50] Speaker 03: The district court's theory as to why he could award the avoided cost seems to me pretty thin. [00:39:00] Speaker 03: He talks about [00:39:02] Speaker 03: merger and things like that, which really, you're not really arguing today and don't make much sense. [00:39:08] Speaker 03: It may be that there was a ground that he could have adopted, but he didn't, or she didn't. [00:39:14] Speaker 04: He did. [00:39:15] Speaker 04: He did conclude that the jury's award rested on partly on avoided costs and partly on other measures of the trade secrets value. [00:39:25] Speaker 04: The point about the merger, that went to the other component of the damages. [00:39:30] Speaker 04: That's what he reduced. [00:39:32] Speaker 04: In other words, when reducing the damages award, [00:39:35] Speaker 04: he took that off the table, because you could tell that the jury had credited our damages evidence, which included... But he didn't rely on the sales that we've been talking about, right? [00:39:45] Speaker 04: He didn't rely on the sales in the sense that, like, that it... That it's justifying the avoided costs. [00:39:50] Speaker 04: Right, because, and the reason for that is, and this really goes fundamentally to why this rule makes sense, that the rule the other side is arguing for is that if you have, you know, because they wouldn't [00:40:02] Speaker 04: allow gross revenue as a measure of damages either, right? [00:40:05] Speaker 04: They would say, well, we were losing money. [00:40:07] Speaker 04: It wasn't profitable revenue. [00:40:09] Speaker 04: So there should be no damages. [00:40:11] Speaker 04: And so their answer is that when you have a product that is sold overseas, so it's not competing directly in the same market, if it doesn't cause the [00:40:27] Speaker 04: trade secret owner immediate damage that you can, you know, essentially exploit it until you get caught and pay no damages. [00:40:34] Speaker 04: That is not how unjust enrichment works. [00:40:37] Speaker 04: If you borrow without permission, you know, the plaintiff's asset and you make money off of it or one way of making money is avoiding spending money that you otherwise would have to spend. [00:40:49] Speaker 04: then you have to disforge that benefit in order to do equity and prevent you from enjoying the fruits of your misappropriation. [00:40:57] Speaker 04: I think that's really black-letter law, and I think that the restatement provisions and treatises in Cintel give a nice overview of why this is. [00:41:08] Speaker 04: On the DHF, unless the court has any further questions about that point, [00:41:14] Speaker 04: The other side has not given any actual problem with the DHF case that we presented. [00:41:24] Speaker 04: We presented a discrete set of documents, a knowable, finite set of documents. [00:41:30] Speaker 04: We explained why [00:41:31] Speaker 04: not all of the contents were confidential because that's how a design history file works. [00:41:43] Speaker 04: So Judge, to your question, what is the relevance of the regulation about a design history file? [00:41:47] Speaker 04: That is the relevance. [00:41:48] Speaker 04: In other words, why do we have a design history file and why does it have value as a compilation? [00:41:54] Speaker 04: Now, why did we submit these nine binders from 2012? [00:41:56] Speaker 04: The answer is because that's when Mr. Hamm put the design history file on a thumb drive and that wasn't, we didn't, [00:42:07] Speaker 04: he was doing it in the course of his employment. [00:42:10] Speaker 04: We didn't know that he'd taken the thumb drive with him. [00:42:13] Speaker 04: He signed exit paperwork saying that he hadn't. [00:42:17] Speaker 04: But the point is that the design history file itself has value in its entirety. [00:42:23] Speaker 04: He deleted a bunch of stuff. [00:42:24] Speaker 04: We weren't able to get his original files. [00:42:27] Speaker 04: And so that's why we had to reconstruct it as Exhibit 2177. [00:42:30] Speaker 04: So the other side wasn't surprised by what the contents were. [00:42:34] Speaker 04: In terms of whether the contents were [00:42:36] Speaker 04: Correct, but but I think there's ample evidence and I'm happy to take you through take it take it through category by category Within the design history file without dispute [00:42:49] Speaker 04: There is the two types of failure mode effects analysis. [00:42:57] Speaker 04: And we established... And it wasn't presented to the jury that night, right? [00:43:02] Speaker 04: We presented a bunch of discrete, of like, identifiable components of the design history file. [00:43:09] Speaker 04: We explained why they were secret, why they derive value from being secret, why the other side... How we established... It was presented as those were separate secrets? [00:43:19] Speaker 04: We lined each of them up. [00:43:23] Speaker 04: We explained both that they are within part of the design. [00:43:26] Speaker 03: But the theory was that the whole file was a trade secret, right? [00:43:29] Speaker 04: Not that the whole file was secret, your honor, that the whole file was a compilation trade secret that included both confidential and non-confidential documents. [00:43:38] Speaker 04: The jury instruction on that is quite detailed. [00:43:41] Speaker 04: The other side has not objected to it, to the concept that you can have a compilation trade secret. [00:43:45] Speaker 04: that includes both confidential and non-confidential information that derives value from its existence as a discrete thing. [00:43:53] Speaker 04: Medtronic was asking, do you have a design history file? [00:43:57] Speaker 04: It's a question that caused the other side to go into what they themselves called pants on fire emergency mode, appendix 20895. [00:44:06] Speaker 03: What case says that non-secret information can be a trade secret? [00:44:10] Speaker 04: I refer you to the Allstate case from the First Circuit distinguishing the TLS case on this very point that a compilation of information can include non-secret information if it derives value from being a compilation. [00:44:29] Speaker 04: The other side has not objected to that premise. [00:44:32] Speaker 04: That is what the jury instruction says. [00:44:34] Speaker 04: There are detailed instructions on how to treat compilation trade secrets [00:44:40] Speaker 04: bit differently from other trade secrets. [00:44:42] Speaker 04: The other side didn't object to those. [00:44:45] Speaker 04: And the point is that having a design history file, when you're going to submit your device for clearance by the FDA or when you're going to sell your company to Medtronic and you're undergoing due diligence, having a design history file is essential and they needed quickly [00:45:02] Speaker 04: to assemble a design history file with the kind of backup that they would have had if they developed the product themselves instead of stealing from Insulate. [00:45:13] Speaker 04: And so we presented a number of, I don't think it was incumbent on us to establish that every single document within the DHF was both secret and misappropriated. [00:45:27] Speaker 04: We went through six different categories, all within the DHF, [00:45:31] Speaker 04: all secret, all derived value from being secret, and all misappropriated. [00:45:35] Speaker 04: And I'm happy to walk you through testimony on each one of those categories. [00:45:39] Speaker 04: The design mode failure analysis, the hardware design document, and frankly, the entire design history file. [00:45:47] Speaker 04: At page 20996 and page 21023, we have evidence that the DHF as a whole is valuable. [00:45:58] Speaker 01: Can I just ask you, I know you're not going to like this question, but let me just ask it, which is if we disagree with you on the DHF, what happens with respect to the permanent junction? [00:46:10] Speaker 04: I think your question rightly recognizes that that's the only part of the judgment that turns on the DHF. [00:46:17] Speaker 01: And I think the only... And there's an overlap between the categories. [00:46:21] Speaker 01: I mean, is there an overlap between what's in the DHF and what's in the other stuff? [00:46:26] Speaker 04: Yes. [00:46:26] Speaker 04: And so I think that it probably would be simplest to ask the district court to revise the injunction. [00:46:33] Speaker 04: But if we look at the injunction together, you'll see that it defines the trade secrets [00:46:40] Speaker 04: the trade secrets are the four that the jury found were valid and infringed and then the operative provisions of the injunction all refer to the trade secrets kind of the defined term so it's possible that it would be as simple as removing the DHF we obviously don't think you should do that because after all that part of this appeal is under the J mall standard and the [00:47:04] Speaker 04: there's really quite ample evidence, if the jury was instructed correctly, which the other side appears to concede, that the DHF, both as a whole and a number of the components that we presented to the jury, were secret. [00:47:19] Speaker 01: But you didn't expect us to divvy that up. [00:47:22] Speaker 01: I mean, we're not going to decide here on appeal if we didn't think [00:47:27] Speaker 01: essentially, the entirety was a trade secret. [00:47:31] Speaker 01: We don't have to go through and say, but maybe this part was, and maybe this part was. [00:47:35] Speaker 01: That's not our job on appeal here, right? [00:47:37] Speaker 04: Well, your job on appeal is to ask whether the jury, as instructed, [00:47:43] Speaker 04: I could have found from the trial evidence that the DHF was misappropriated. [00:47:48] Speaker 04: And recall that the compilation trade secret instruction says a substantial part. [00:47:52] Speaker 04: And so I do think that it would not be enough to say, here is a thing that it is not clear whether it's in the DHF or is not. [00:48:02] Speaker 04: Really, all of opposing counsel's arguments were, both in the brief and today, were along those lines. [00:48:09] Speaker 04: Here are some things that might be considered in a DHF or might not be. [00:48:13] Speaker 04: But the question was not, were they in exhibit 2177? [00:48:17] Speaker 04: Do they derive value from being secret? [00:48:19] Speaker 04: And were they misappropriated? [00:48:21] Speaker 04: And we showed, for a substantial portion of the DHF, which is all our burden consists of, that all of those elements were met. [00:48:31] Speaker 02: Okay. [00:48:31] Speaker 04: Thank you. [00:48:41] Speaker 00: Thank you, Your Honor. [00:48:43] Speaker 00: I'll begin with a quick factual clarification. [00:48:46] Speaker 00: Judge Prost, you asked about the employees and when they had left Insulate and when they started working for EOFLOW. [00:48:52] Speaker 00: All of the relevant employees had started by 2017, and that includes Diani, who was the central architect of the CAD files and of the Omnipod. [00:49:01] Speaker 00: So I just wanted to clarify that. [00:49:03] Speaker 00: That appears in Appendix 21065. [00:49:06] Speaker 00: On the statute of limitations, I want to say that if you put yourself in Congress's shoes back in 2016 [00:49:18] Speaker 00: Insulet says Congress just wanted to embrace the Merck standard, that discovery rule, but it would have been inexplicable to instead replicate verbatim the language from the UTSA that had been subject to this inquiry notice interpretation in the lower courts and not use the language from Merck, which was very different. [00:49:34] Speaker 00: That statute just referred to discovery full stop. [00:49:38] Speaker 00: But even under that discovery rule, as Judge Dyck noted, it requires access and similarity in order to adequately allege and file a complaint for trade secret misappropriation. [00:49:48] Speaker 00: And there are a number of cases that stand for that proposition, including Liggett and Platt from this court and, of course, the Seatracks case. [00:49:54] Speaker 00: that did involve a Texas state law claim, but the statutory language there was virtually identical to the DTSA language. [00:50:01] Speaker 00: It's very clear under that case law, you don't need to know every single detail to be able to allege trade secret misappropriation, and it focuses on similar products. [00:50:10] Speaker 00: Insulate is saying, oh, you couldn't necessarily see every jot and tittle of the information asserted to be a secret. [00:50:16] Speaker 00: But of course, if you can just see that in a product, it's unclear how that would qualify it for trade secret protection in the first place. [00:50:23] Speaker 00: Instead, the cases always focus on the idea that you've got a similar product, and then you've got employees, former employees, who knew all of the relevant confidential information that went into building that product that has regularly been found to provide a basis to state a claim [00:50:39] Speaker 00: and therefore demonstrates that the statute of limitations has run. [00:50:43] Speaker 00: Quickly on damages, there is no indication that the damages theory was tied to any foreign sales, and there's no way that you could get to 26 million from that amount. [00:50:52] Speaker 00: Instead, that theory of avoided cost damages awarding the full measure of what it would have cost to independently develop the trade secrets duplicates the injunction that prevents EO flow from using those very same trade secrets. [00:51:04] Speaker 00: And just finally on jurisdiction, [00:51:06] Speaker 00: This court's decision in Chamberlain says that the dividing line is whether the patent claims fell out of the case with or without prejudice. [00:51:14] Speaker 00: And it doesn't matter what label the district court used. [00:51:17] Speaker 00: It's a functional analysis. [00:51:18] Speaker 00: There are any number of cases from this court and other courts saying that when claims are dismissed after the statute of limitations has run, that is effectively with prejudice. [00:51:28] Speaker 00: And a contrary rule would invite the very kind of jurisdiction manipulation we might be seeing here [00:51:33] Speaker 00: where it's only once the claims come up on appeal and you're thinking about appellate issues that Insulet tried to dismiss these patent claims, but it did it after the statute of limitations ran and therefore this court's jurisdiction is secure. [00:51:45] Speaker 03: So we'd ask the court to reverse.