CAFC Says Trade Secret Owner Forfeited Tortious Interference, Damages Arguments

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued a decision today in Truinject Corp. v. Galderma S.A., affirming a U.S. District Court for the District of Delaware judgment for Galderma S.A. on tortious interference, breach of contract, and trade secret misappropriation claims. The CAFC held that Truinject Corporation forfeited its arguments on appeal about the dismissal of its tortious interference claim and the summary judgment of no damages.

Truinject was founded to develop a training system called “Kate” that aestheticians could use to practice dermal injections. The system was envisioned to include an injectable mannequin head and a fiber-optic syringe for tracking needle placement. In early 2014, Galderma contacted Truinject to explore partnership options for Kate.

The companies entered into a Confidential Disclosure Agreement (CDA) on October 23, 2014, and an Exclusive Negotiation Agreement (ENA) on November 5, 2014. The ENA required good faith negotiations and barred Truinject from pursuing partnerships with others during a 90-day exclusivity period.

Truinject had previously met with Allergan, the former employer of its principal founder, to seek an investment. Truinject canceled a meeting with Allergan scheduled for November 7, 2014, to comply with the ENA. An Allergan representative testified that he intended to offer Truinject a $100 million up-front payment for an exclusive deal at that meeting, although Allergan had not conducted formal due diligence, a precondition to any deal. Allergan repeatedly passed on a deal after the exclusivity period expired in February 2015. Truinject identified three occasions, beginning December 15, 2014, when Galderma allegedly breached the ENA or CDA by sharing information with vendors to develop its own version of Kate.

Truinject filed a lawsuit against Galderma in October 2018. The Second Amended Complaint alleged patent infringement, tortious interference, breach of contract, and trade secret misappropriation. On November 20, 2020, the district court dismissed the tortious interference claim without prejudice to amendment, concluding that Truinject had not plausibly alleged a valid business expectancy or intentional interference, and Truinject never amended the claim. The district court later granted summary judgment of no damages, finding that the evidence could not show Galderma caused the damages Truinject sought for losing a potential deal with Allergan, and entered final judgment for Galderma on November 6, 2024.

The district court found the tortious interference claim deficient on the business expectancy and intentional interference elements, and the CAFC addressed only the latter. On appeal, Truinject argued that the complaint plausibly alleged that Galderma interfered with its expected relationship with Allergan by pressuring Truinject to cancel meetings through the ENA.

Third Circuit law treats arguments that were not presented to the district court as forfeited on appeal. In opposing dismissal, Truinject described Galderma’s interference as lasting from 2014 to at least 2018 and specified alleged disparagement directed at physicians serving on advisory boards. The CAFC found nothing in that portion of the opposition arguing that Galderma’s conduct in securing the ENA satisfied the intentional interference element, and said the complaint’s tortious interference section likewise focused on disparagement. The CAFC concluded that “the basis was not meaningfully presented to the district court, and it was therefore forfeited.”

The CAFC noted that the dismissal was without prejudice to amendment, and Truinject could have presented its current theory in an amended complaint. Truinject “bypassed that opportunity,” the CAFC said, which reinforced the conclusion of forfeiture.

Truinject’s sole theory, the “Allergan Theory,” attributed the loss of an Allergan deal to alleged breaches by Galderma. The district court found that the alleged breaches began in December 2014, after the meeting cancellation, and that the evidence did not show that Allergan knew of them. Truinject did not challenge the ruling on the canceled meeting on appeal. Truinject instead argued that the proposed Allergan deal offered a reasonable measure of the market value Kate lost as a result of the alleged breach and misappropriation.

The CAFC declined to consider that argument because Truinject did not raise it in opposition to summary judgment. Truinject also admitted in interrogatories that it had presented no evidence or calculation of damages apart from the Allergan Theory. Truinject pointed to two lines in its opposition about the devaluation of Kate, but those lines cited no record evidence. The CAFC stated that “[a] few passing lines buried in the opposition to summary judgment is not enough to have put the appeal theory of damages squarely before the district court.”

Furthermore, the CAFC also found Truinject’s rescissory damages claim forfeited since it was not adequately presented to the district court and changed the substance of the claim. Truinject also left unchallenged the ruling on Allergan’s knowledge, and the rejection of nominal damages, and the CAFC concluded that Truinject had “no viable claim for contract damages.”

Truinject sought no relief on appeal other than damages, so the court could not grant relief for breach of contract. The CAFC noted Truinject’s recognition that damages for trade secret misappropriation overlap with contract damages where a breach involves misuse of confidential information, and said Truinject presented no evidence of actual loss caused by misappropriation. Judgment for Galderma on the trade secret claim was therefore proper, and the CAFC did not reach the district court’s other grounds for summary judgment on those claims.

Ultimately, the CAFC considered Truinject’s remaining arguments, found them unpersuasive, and affirmed the district court’s judgment for Galderma.