Trade Secret Litigation Trends in Life Sciences
The Rise of Trade Secret Litigation
Over the past decade, trade secret litigation filings have grown substantially. Several key drivers have fueled this increase. First, the enactment of the Defend Trade Secrets Act ("DTSA") in 2016 created a federal private right of action for trade secret misappropriation, making it easier for plaintiffs to pursue claims in federal court. Second, heightened competition in health care and life sciences sectors has intensified disputes over proprietary information. Third, increased M&A activity and corporate restructuring have created more opportunities for the dissemination and potential misuse of confidential information. Finally, there is a growing awareness of intellectual property value beyond patents, with companies recognizing that trade secrets can be equally—if not more—valuable than patented innovations.
Industry-specific factors have made health care and life sciences companies particularly susceptible to trade secret disputes. Competitive pressures in pharmaceutical development, medical device innovation, and biotechnology research create strong incentives for competitors to try to gain access to information that will help accelerate their own research and development efforts. Further, in the last few years, the pharmaceutical world has moved toward personalized and targeted therapies, leading to an increased focus on biologics (e.g., ADCs) and a shift away from small molecules. In fact, recent studies show that while the ADC market was valued at around $11.9 billion in 2024, the market is projected to grow past $20.4 billion by 2033. As the market grows, many companies will feel increased pressure to produce innovative therapies and not get left behind.
This dramatic technological shift has increased the focus on acquisition targets with promising biologics pipelines. Consequently, scientists with specialized expertise in these areas are being actively recruited to facilitate a move into this new space. This pattern mimics hiring trends seen in the AI world, where companies are offering hyper-competitive salaries and incentives to hire AI engineers away from competitors. Such an environment creates fertile ground for claims of trade secret misappropriation—the very reason these pharmaceutical scientists are being hired is because they have an expertise that their new employer values and that their former employer does not wish to lose.
Common Origins of Trade Secret Disputes in Health Care and Life Sciences
Employee Mobility: One of the most common sources of trade secret disputes involves departing employees who join competitors or form competing ventures. When employees leave, they carry knowledge and experience that may include confidential information about their former employer's products, processes, and strategies. This is particularly true in the pharmaceutical and health care space, where companies frequently engage in complex research and development in secret until they are ready to bring a product to market (or until a patent application publishes). Departing employees create a potential risk to their employer because they may take with them highly valuable trade secret information acquired during the course of research and development efforts and that the company has not yet included in a patent application or has chosen to maintain as trade secret. Employee mobility also creates the risk of potential contamination of the new employer through trade secret information a new employee may bring with him.
In this context, companies also face challenges related to non-compete and non-solicitation agreements, which vary in enforceability depending on jurisdiction and can be difficult to monitor. To mitigate these risks, companies are well-advised to evaluate their practices for onboarding and offboarding employees, including clear communication of confidentiality obligations and thorough onboarding and exit interviews.
Collaboration Agreements and Business Relationships: Health care and life sciences companies frequently engage in joint ventures and research collaborations that require sharing of proprietary information. Licensing arrangements and technology transfers also create situations where confidential information is exchanged between parties. When these partnerships fail or agreements are terminated, disputes can arise over the ownership and use of shared information. Similarly, vendor and supplier relationships involving access to proprietary information can become contentious if the business relationship sours. Getting ahead of these potential issues with clear legal safeguards can mitigate the associated risks.
Other Common Scenarios. Trade secret disputes also arise from consultant and contractor engagements, where third parties gain access to sensitive information in the course of their work. Additionally, cybersecurity breaches and corporate espionage remain ongoing threats that can result in the unauthorized acquisition of trade secrets.
REMEDIES AVAILABLE IN TRADE SECRET LITIGATION
Monetary Damages: Trade secret plaintiffs in recent years have been awarded significant damages, including lost profits and unjust enrichment, or alternatively a reasonable royalty, for the unauthorized use of their trade secrets. In cases involving willful and malicious misappropriation, courts may award exemplary damages, which can significantly increase the total recovery, in an amount up to twice the compensatory damages.
While some of these recent jury verdicts were later reduced on appeal, they exemplify the substantial financial risk and/or leverage that can arise in trade secret disputes.
Injunctive Relief: Beyond monetary remedies, trade secret plaintiffs can seek various forms of injunctive relief. Temporary restraining orders and preliminary injunctions can halt the use or disclosure of trade secrets while litigation is pending. Permanent injunctions may prohibit continued use or disclosure on a going-forward basis. Courts may also issue head start or lead time injunctions that account for the improper competitive advantage gained by the misappropriator. Notably, courts have recently held that reassignment of patents filed using stolen trade secrets is permitted under the DTSA, providing a powerful remedy for aggrieved parties. See Insulet Corporation v. EOFlow Co., Ltd., 779 F. Supp. 3d 124, 135 (D. Mass. 2025). For cases brought in the International Trade Commission, an exclusion order may be available to prevent importation of products tainted by trade secret misappropriation. 19 U.S.C. § 1337(d); TianRui Group Co. Ltd. v. Int'l Trade Comm'n, 661 F.3d 1322, 1326 (Fed. Cir. 2011).
Attorney's Fees and Costs: In certain circumstances, prevailing parties in trade secret litigation may also recover attorney's fees and costs, providing an additional incentive to pursue meritorious claims.
Recent Trade Secret Cases in Health Care and Life Sciences
Insulet Corporation v. EOFlow Co., Ltd. (2025): In Insulet Corporation v. EOFlow Co., Ltd., a Massachusetts jury awarded Insulet $452 million (comprising $170 million compensatory and $282 million exemplary damages) after finding that South Korean company EOFlow and its CEO willfully stole trade secrets related to its wearable insulin pump patch OmniPod. Further, the court granted a permanent injunction preventing EOFlow from continuing to market its unlawful product and ordered that the patents filed using Insulet's trade secrets be reassigned to Insulet. Ultimately, the court reduced the damages award to $60 million, concluding that the permanent injunction would constitute impermissible double recovery. Nonetheless, Insulet underscores the substantial risks and rewards companies may encounter when competitors engage in trade secret misappropriation.
United Therapeutics Corp. v. Liquidia Technologies, Inc. (2025): In a 2025 case arising in the North Carolina Business Court, the court denied defendant Liquidia Technologies' summary judgment motion and found that United Therapeutics had sufficiently demonstrated that a former executive's use of stolen financial models, regulatory strategies, marketing plans, and clinical trial data could constitute trade secret misappropriation. The former executive allegedly used this proprietary information to develop a competing therapy for pulmonary arterial hypertension. Liquidia thus illustrates the breadth of information that can qualify as protectable trade secrets, extending beyond technical formulas to encompass business and regulatory strategies as well as clinical trial data.
Aptar Group Inc. v. ARS Pharmaceuticals, Inc. (2026): In a March 2026 decision, the Southern District of New York denied ARS's motion to dismiss Aptar's trade secret misappropriation claims under the DTSA. Aptar, the original manufacturer of a single-use, intranasal delivery system used for the delivery of emergency-use medications such as Narcan, alleges that ARS misappropriated trade secrets related to its drug delivery system following a collaboration between the companies. Specifically, Aptar and ARS worked together to integrate Aptar's drug delivery system with epinephrine (as an alternative to the EpiPen). Aptar alleges that ARS then switched suppliers for the nasal delivery systems to a generic competitor of Aptar's and disclosed Aptar's proprietary information to that competitor in order to obtain a nearly identical delivery system at a cheaper cost. Notably, the court allowed Aptar's trade secret claims to move forward despite the fact that Aptar held a now-expired patent that covered its drug delivery system. As the court explained, Aptar plausibly alleged that ARS "shared significant information [with the competitor] beyond what is publicly disclosed in the patent," such as device compositions, fault tree analyses, and mold designs. 2026 WL 866954, at *2. Aptar is a useful example of how collaborative relationships between parties in the health care space can sometimes expose those parties to potential trade secret misappropriation down the road.
Conclusion
Trade secret litigation continues to grow, driven by increased competition, employee mobility, and the growing recognition of intellectual property value beyond patents. The significant remedies available—including substantial damages awards, injunctive relief, and patent reassignment—make trade secret protection both a risk management priority and a strategic opportunity.
Jones Day offers various programs and CLEs to educate clients on key features of trade secret law and help them develop robust protection strategies. For more information about our trade secret practice in the health care and life sciences industries, please contact Andrea Jeffries (ajeffries@jonesday.com), Randy Kay (rekay@jonesday.com), or Sarah Geers (sgeers@jonesday.com). Additional information about Jones Day's trade secret practice can be found here.
