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Federal Circuit overturns $59M trade-secret award in DTSA limitations ruling

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12

Why it matters

The Federal Circuit reversed a $59 million jury award in a trade-secret case on May 28, 2026, holding that Insulet Corporation's Defend Trade Secrets Act claim was time-barred under the statute's three-year limitations period. Judge Timothy B. Dyk authored the majority opinion in the 2-1 ruling, treating the accrual rule strictly despite the substantial damages verdict at trial.

The decision vacates the compensatory and exemplary damages award entirely. The court's reasoning on when DTSA claims accrue—and the precise moment a plaintiff is deemed on notice of misappropriation—remains subject to interpretation in future cases, particularly where alleged misuse occurred years before suit was filed.

Companies pursuing trade-secret claims in federal court should treat the DTSA's limitations window as unforgiving. The ruling reinforces that plaintiffs cannot rely on delayed discovery or gradual awareness to extend the filing deadline. Counsel should audit potential trade-secret disputes early and calendar the three-year accrual date from the moment of notice, not from the moment of discovery of full damages.

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