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We all should know the risks of rushing to file a trade secret misappropriation claim under the Defend Trade Secrets Act (DTSA) without gathering enough facts. In addition to risking Rule 11 sanctions, for example, a plaintiff risks having to pay the defendant’s attorneys’ fees under the DTSA “if a claim of misappropriation is made in bad faith, which may be established by circumstantial evidence.” 18 U.S.C. §&nbsp;1836(b)(3)(D). Obviously, a plaintiff should always do a reasonable investigation before filing a DTSA case.

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But as the Federal Circuit’s recent decision in Insulet v. EOFlow cautions, waiting to gather every conceivable fact before filing a DTSA claim comes with its own risks. In fact, waiting too long can cost millions of dollars.On May 28, the Federal Circuit overturned a $59.4 million verdict and permanent injunction entered in favor of medical device maker Insulet Corp. against competitor EOFlow Co. Ltd. In its opinion, the Federal Circuit clarified that the three-year statute of limitations under the DTSA begins to run once a plaintiff knows (or with reasonable diligence should know) enough facts to plead a DTSA claim – even if those facts are not enough to prove the claim.

Insulet and EOFlow both design and produce adhesive, wearable insulin patch pumps. In 2023, Insulet sued EOFlow in Massachusetts federal court for trade secret misappropriation under the DTSA, among other claims. The claimed misappropriation began five years before the lawsuit, when EOFlow hired former Insulet employees who allegedly disclosed Insulet’s confidential information to EOFlow. At trial, the jury found that EOFlow misappropriated four of Insulet’s trade secrets and that the claim was not barred by the three-year DTSA statute of limitations. The jury awarded Insulet $452 million in damages. The trial court reduced the damages to $59.4 million, but it also granted Insulet’s motion for a permanent injunction.

On appeal, a divided Federal Circuit panel reversed the judgment because Insulet’s DTSA claim was filed too late. The court’s decision turned on two key holdings. First, the court held that the three-year statute of limitations for a DTSA claim begins to run once the plaintiff knows, or should know, facts sufficient to plead a misappropriation claim. Second, the court held that if multiple trade secrets are disclosed in the same course of conduct, then all the trade secrets share the earliest possible statute-of-limitations deadline.

The court adopted an access-plus-similarity standard for when a plaintiff knows (or should know) facts sufficient to state a claim. Under that standard, a plaintiff can state a plausible DTSA claim based on factual allegations showing the defendant’s access to the trade secret and similarity between the trade secret and the defendant’s product accused of incorporating the trade secret. When a plaintiff knows (or should know) enough facts to file a complaint under that standard, the limitations period begins. Circumstantial evidence can be enough to trigger the limitations period.

The court also held that DTSA claims based on related trade secrets disclosed over the same time period accrue on the same date. The first discovered (or discoverable) misappropriation starts the limitations period for all trade secrets disclosed to the defendant at substantially the same time, by the same person and for the same purpose. This rule applies even when the later-discovered misappropriation could not have been detected through direct examination of the defendant’s product.

As the Federal Circuit summed it up, “[t]he relevant question is ultimately whether Insulet had sufficient knowledge to state a claim for trade secret misappropriation before the critical date, not whether it had sufficient evidence to prove misappropriation of its trade secrets.” Insulet Corp. v. EOFlow, Co., No. 2025-1807, 2026 WL 1502238, at *6 (Fed. Cir. May 28, 2026) (emphasis added). Once a DTSA plaintiff has that knowledge, they should promptly file the DTSA claim.

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Summer Associate Shukri Zanika co-authored this blog post.

Federal Circuit Holds That DTSA Statute of Limitations Starts Running When Plaintiff Has Enough Facts to Plead—Not Necessarily to ‘Prove’—a DTSA Claim