Too Little, Too Late? N.D. Illinois Dismisses DTSA Claim as Time-Barred, Rejects Tolling Theories

The decision offers a clear application of the DTSA’s discovery rule and its single-claim treatment of continuing misappropriation, and it rejects several common tolling theories.

Background

For over two decades beginning in 1996, Adem Arslani developed proprietary consulting methodologies for health care clinical-documentation technology, including a “Health Check” diagnostic optimization methodology and a “Rapid Improvement Engagement” framework. In 2018, he went to work for Clinical AI Solutions, Inc. (CAIS), whose CEO, Dr. Reid Conant, simultaneously held a senior leadership role at Nuance Communications, Inc. Arslani shared his methodologies with Dr. Conant, who then presented Arslani’s methodologies to Nuance executives. Arslani alleged that after Nuance internalized his methodologies, CAIS was wound down, Arslani’s employment with CAIS ended, and Nuance then launched closely resembling products and services. 

In March 2021, Nuance sold its Health Information Management and Electronic Health Record Go-Live Services division, which incorporated service lines built on Arslani’s methodologies, to DeliverHealth Solutions, LLC. In late August 2021, Arslani directly confronted Dr. Conant about the alleged misappropriation and ongoing use of his methodologies by Nuance and DeliverHealth. Dr. Conant did not deny the accusation and instead told Arslani that Nuance had “screwed us over” but that there was “nothing illegal about it.” 

Shortly after Arslani’s CAIS employment ended on September 3, 2021, Nuance launched a product that replicated Arslani’s Health Check methodology. On September 8, 2021, Arslani wrote to Nuance’s Chief Legal Officer (CLO) detailing the “potential misappropriation” of his methodologies. Nuance acknowledged the letter but never substantively responded. 

In November 2021, Dr. Conant withheld a substantial portion of Arslani’s compensation and conditioned payment on execution of a liability release agreement. Arslani signed a release with CAIS that barred him from contacting Nuance or Microsoft about his employment and separation from CAIS.

In March 2022, Microsoft acquired Nuance and has continued to operate and benefit from products and services that used Arslani’s methodologies. 

Arslani sued the defendants in Illinois state court on September 30, 2025, voluntarily dismissed that action in November 2025, and filed this federal action on March 17, asserting claims under the DTSA, the Illinois Trade Secrets Act, and related state law. Defendants moved to dismiss under Rule 12(b)(6), arguing that the DTSA claim — the only basis for federal jurisdiction — was time-barred.

Case Information

Citation: Adem Arslani v. Microsoft Corporation, Case No. 3:26-cv-50106, 2026 WL 3033892 (N.D. Ill. Oct. 9, 2026)

Plaintiff: Adem Arslani (pro se)

Defendants: Microsoft Corporation, Nuance Communications, Inc., DeliverHealth Solutions, LLC

Judge: Iain D. Johnston, US District Judge

Analysis and Outcome

The DTSA has a three-year limitations period that begins when the plaintiff discovers, or with reasonable diligence should have discovered, the misappropriation, and a continuing misappropriation constitutes a single claim, so ongoing use does not restart the clock. The court held that Arslani’s admissions that he “directly confronted” Dr. Conant and wrote to Nuance’s CLO in 2021 showed he was at least on inquiry notice, and in fact knew of the injury by late 2021. The court rejected his argument that the letter reflected mere “suspicion” and his contention that he did not discover the “full scope” of the misappropriation until later, explaining that accrual turns on discovery of the harm itself, not of every element of a claim.

Arslani argued that even if his DTSA claim accrued more than three years before he filed this action, the limitations period was tolled based on four different tolling theories. The court rejected each tolling theory.

• Equitable Estoppel/Fraudulent Concealment: Arslani claimed that the limitations period was tolled by “[s]even independent acts of fraudulent concealment” that “establish a continuous pattern of concealment from 2020 through 2026.” The court found that only two of the seven alleged acts of concealment were attributable to the defendants — Nuance’s silence after its CLO promised to investigate and Microsoft’s Business Conduct Office allegedly ignoring a February 2025 complaint. However, silence, the court explained, is not the type of obstructive conduct that warrants estoppel.
• The CAIS Release: Arslani claimed that the no-contact provision in the CAIS release, which prohibited him from contacting Nuance or Microsoft about his employment and separation, “foreclosed any duty to investigate” his injuries under the DTSA, thereby tolling the limitations period. The court found that Arslani did not explain how the no-contact provision prevented him from discovering information needed to sue, particularly since it did not stop him from filing in state court in September 2025 while it was still in effect.
• Equitable Tolling: Equitable tolling permits a plaintiff to avoid the bar of the statute of limitations if, despite all due diligence, he is unable to obtain vital information bearing on the existence of his claim. Because a reasonable person in Arslani’s position would have been aware of the possibility that his rights had been violated, and he identified no extraordinary circumstances, equitable tolling did not apply. The inquiry asks whether a plaintiff could learn of the possibility of a claim, not whether he could obtain solid proof.
• State-Court Pendency and the Illinois Savings Statute: Lastly, Arslani attempted to argue that his DTSA claim was tolled during the pendency of his state-court action, which ran from September 30, 2025, through November 6, 2025. Tolling during a pending state action cannot revive a claim that was already stale when that action was filed — Arslani’s state action was filed more than three years after his DTSA claim began to accrue in late 2021. Conceding that the federal limitations period governs his DTSA claim, Arslani also abandoned his claim that he was entitled to one year to refile following his voluntary dismissal under the Illinois savings statute.

Despite granting the defendants’ motions to dismiss, the court emphasized that dismissal under Rule 12(b)(6) based on an affirmative defense is “irregular” and cited to several Seventh Circuit warnings of such practice. Interestingly, Arslani had requested leave to amend only in his response brief, without filing a Rule 15 motion and proposed pleading. The court used its discretion to excuse Arslani’s failure to follow best practice, particularly because he was self-represented. Considering the “unusual step” of granting a Rule 12(b)(6) motion based on an affirmative defense and Rule 15(a)(2)’s liberal amendment standard, the court dismissed the claims without prejudice, granted leave to amend his complaint, and ordered limited discovery solely on the statute of limitations and tolling issues. Although the resulting order is unusual, the court explained that it adopted this approach because the limitations issue is “likely dispositive.” Without suggesting that Arslani’s tolling arguments would succeed, the court noted that, with discovery and the proper procedural vehicle, Arslani might be able to show that the defendants’ conduct excuses his delay.

Why It Matters

The decision reinforces that, under the DTSA, the clock starts when a plaintiff learns of the harm — not when the plaintiff has fully investigated or can prove the claim. A trade secret owner who accuses a competitor of using its information, whether in a demand letter or in conversation, may be creating the very evidence that later establishes accrual. And because continuing use is treated as a single claim, a defendant’s ongoing exploitation of the information will not extend the deadline.

At the same time, the ruling also is a cautionary note for defendants. Even though the complaint appeared to establish untimeliness, the court declined to end the case at the pleading stage, instead allowing amendment and discovery so that the defendants bear their burden on the defense and the plaintiff can develop his tolling arguments. 

Key Takeaways

• The decision underscores the importance of timing once misappropriation is suspected. A DTSA claim accrues upon discovery of the injury, and the court’s analysis indicates that confronting an alleged wrongdoer or sending a demand letter may establish notice. Waiting to complete an investigation or to learn the “full scope” of the misappropriation may not delay accrual.
• The decision also highlights the limits of certain tolling arguments. Silence or unresponsiveness by a defendant, or conduct by non-parties, generally may not support equitable estoppel, while equitable tolling requires diligence and extraordinary circumstances.
• The court’s ruling also illustrates the significance of the procedural vehicle used to raise an affirmative defense. In this case, an affirmative defense raised under Rule 12(b)(6) did not summarily end the case, while a Rule 12(c) motion or summary judgment may present alternative procedural avenues.