What is a Breach of Non-Disclosure Agreement (NDA)?
A breach of a non-disclosure agreement is a violation of the agreement and can be a serious issue for the person who committed it. It can also result in losses if an individual’s NDA has been violated by a client or competitor. It is important for an individual or company to know the consequences of a breach of NDA or the steps to take if faced with a violation of NDA. Given below are some popular questions about the breach of non-disclosure agreement.
What does an Injunctive Relief mean?
Injunctive relief means that the opposing party may not need to prove any damages if they want to take an individual to court and prevent him/her from violating the contract if there has been a breach of NDA. The individual who violates the contract need not necessarily pay money for the damages.
What are the consequences of a Breach of NDA if it results in a financial loss?
If an individual or company suffers financial loss due to breach of a non disclosure agreement, he/she may request the court to award money damages to him/her. The damages could either be measured by the profit that the competitor company may make using the individual’s trade secrets or it could be measured by the loss that the individual makes due to the breach of NDA. If the court finds out that the breach of the NDA was intentional, then it may also impose punitive damages on the individual who is convicted of the breach.
What rights does one have if an investor uses his/her idea or concept and applies for a provisional patent?
If an investor tries to use an individual’s idea or concept as his/her own and applies for a provisional patent , it would be considered a theft and breach of the non disclosure agreement, if there was one. The individual may sue the investor for the damages caused due to the breach of NDA and also ask the investor to surrender the patent. The individual may also file a complaint with the USPTO stating the investor has filed for a patent for an idea that does not belong to him/her. The NDA can be given as a proof of the breach.
How can a company prevent a breach of NDA, if their business spans across different states in the US?
If a company has a business that spans across different states in the US and needs to prevent a breach of non disclosure agreement, they may insert a clause that states the law for the specific state and jurisdiction. This will help the company sue anyone who is involved in the breach of the agreement in that particular jurisdiction.
What can an individual do if a prospective manufacturer, who has signed an NDA, files a patent for his/her idea and starts manufacturing it?
If a prospective manufacturer files a patent for an individual’s idea and starts manufacturing it, the individual may sue the manufacturer for the breach of non-disclosure agreement. The individual may have to provide evidence such as application of the patent and other documents that proves the idea was his/hers. He/she may also hire a patent attorney to send a cease and desist order to the manufacturer to stop the manufacture of the product and pay royalty.
Knowing about the different laws that govern a non-disclosure agreement and the consequences of violating such an agreement, will help individuals who are doing business with others or are coming up with a new idea or creation.