Remedies and Injunctive Relief FAQ

When someone breaches your NDA, you potentially have access to several types of relief:

Monetary Damages:

• Actual damages: The direct financial harm you suffered (lost revenue, lost contracts, remediation costs)
• Consequential damages: Indirect losses like lost business opportunities or damaged reputation (if not excluded by the NDA)
• Disgorgement: Forcing the breaching party to give up any profits they made from your information
• Liquidated damages: Pre-agreed amounts specified in the NDA, if included

Equitable Relief:

• Injunctions: Court orders to stop ongoing disclosure or use
• Specific performance: Court orders to return documents, destroy copies, etc.

Other Recovery:

• Attorney's fees: If the NDA includes fee-shifting provisions
• Court costs: Filing fees, expert witness costs, etc.

Generally, no. Punitive damages are typically not available for breach of contract in most jurisdictions. However, there are important exceptions:

• Fraud: If the breach involved fraudulent misrepresentation, punitive damages may be available
• Willful misconduct: Some states allow punitive damages for intentional, malicious conduct
• Trade secret theft: Under the Defend Trade Secrets Act (DTSA) and state trade secret laws, willful and malicious misappropriation can result in exemplary damages up to 2x actual damages
• Conversion claims: If the breach rises to theft of property, tort-based damages may apply

Bottom line: Ordinary negligent breaches typically result in compensatory damages only. Intentional, malicious, or fraudulent conduct opens the door to enhanced damages.

This is one of the biggest challenges in NDA litigation. Here are approaches courts accept:

Direct Evidence Methods:

• Lost contracts: Show specific deals lost because the information leaked
• Development costs: What it cost you to create the information (R&D expenses, time, expertise)
• Licensing value: What others have paid (or would pay) to license similar information
• Market impact: Demonstrable decline in market share or pricing power

Expert Testimony:

• Hire experts to value trade secrets and confidential information
• Economic experts can model lost profits and market impact
• Industry experts can establish the value of information in your sector

Alternative Measures:

• Unjust enrichment: What the breaching party gained (may be easier to prove)
• Reasonable royalty: What a willing buyer and seller would have agreed to

Practical tip: Document the value of your confidential information before sharing it. Keep records of development costs, licensing discussions, and competitive advantages. This creates evidence you can use later if needed.

Liquidated damages are pre-agreed amounts payable upon breach, set forth in the contract. They can simplify disputes by eliminating the need to prove actual damages.

To be enforceable, liquidated damages must:

• Be a reasonable estimate: The amount must be a reasonable forecast of anticipated damages at the time of contracting
• Not be a penalty: Courts will not enforce amounts designed to punish rather than compensate
• Compensate for hard-to-measure harm: More likely enforceable when actual damages would be difficult to prove

Red flags that suggest unenforceability:

• Amounts that bear no relationship to anticipated harm
• Same amount regardless of severity of breach
• Amounts significantly higher than plausible damages
• Language calling them "penalties" or "fines"

Speed depends on the type of relief you seek:

Temporary Restraining Order (TRO):

• Timeline: Can be obtained within hours to days
• Ex parte: Can sometimes be obtained without the other side being present
• Duration: Typically lasts 14 days (can be extended to 28)
• Requirements: Show immediate, irreparable harm that cannot wait for a full hearing

Preliminary Injunction:

• Timeline: Usually 2-4 weeks for hearing
• Adversarial: Both sides present evidence and arguments
• Duration: Lasts until trial is completed
• Requirements: Likelihood of success, irreparable harm, balance of hardships, public interest

Permanent Injunction:

• Timeline: Requires full trial (months to years)
• Duration: Permanent or for specified period
• Requirements: Prove your case on the merits

Practical reality: If you discover an imminent breach on a Friday afternoon, you can often get an emergency TRO by Monday morning if you have a lawyer ready and the situation is truly urgent.

A TRO can be issued without you being present, but there are limits and protections:

Ex Parte TRO Requirements:

• The moving party must show immediate, irreparable harm
• They must certify efforts to notify you (or explain why notice was impossible)
• A lawyer must certify facts supporting the request
• The TRO only lasts 14 days before a hearing must occur

Your Protections:

• Bond requirement: Courts typically require the moving party to post a bond to protect you against wrongful injunctions
• Prompt hearing: You are entitled to a hearing within 14 days
• Motion to dissolve: You can immediately move to dissolve an improperly granted TRO
• Wrongful injunction damages: If the TRO was improper, you can recover damages from the bond

Irreparable harm is harm that cannot be adequately compensated by money damages. It is a critical requirement for obtaining injunctive relief.

Why courts require it: Injunctions are extraordinary remedies. Courts prefer to let parties litigate their disputes and pay damages. Injunctions are reserved for situations where money cannot make the injured party whole.

Why confidential information often qualifies:

• Once disclosed, secrets cannot be "un-disclosed"
• Competitive advantage lost may be impossible to quantify
• Damage spreads uncontrollably once information is in the wild
• The value of confidentiality is destroyed permanently

The NDA clause helps because: Having a contractual acknowledgment of irreparable harm shifts the burden. Instead of you having to prove irreparable harm, the other side may have to disprove it.

Limitations: Courts still have discretion. A stale breach (information disclosed years ago and already public) may not justify injunctive relief even with a contractual acknowledgment.

Contempt of court. Violating a court order is extremely serious:

Civil Contempt:

• Daily fines until you comply
• Fines can escalate rapidly (doubling daily is common)
• Compensatory damages to the other party
• Payment of the other side's attorney's fees

Criminal Contempt:

• Jail time for willful violations
• Criminal fines
• This is rare but possible for egregious violations

Other Consequences:

• Adverse inferences in the underlying case
• Default judgment against you
• Assumption of bad faith in all future proceedings
• Difficulty getting courts to rule in your favor on anything

Bottom line: Take injunctions extremely seriously. If you believe an injunction is improper, appeal it - do not violate it.

NDA litigation can be expensive. Here are realistic cost ranges:

Demand Letter and Negotiation:

• $2,000 - $15,000 for attorney time
• Often resolves matters without litigation

TRO/Preliminary Injunction:

• $15,000 - $75,000 for the emergency phase
• Higher for complex technical matters
• Expert witnesses can add significantly

Full Litigation Through Trial:

• $100,000 - $500,000+ for straightforward cases
• $500,000 - $2,000,000+ for complex trade secret cases
• Discovery is often the biggest cost driver

Cost-Benefit Considerations:

• Is the information valuable enough to justify the expense?
• Can you recover attorney's fees if you prevail?
• Does the defendant have assets to satisfy a judgment?
• Would settlement be more cost-effective?

Practical tip: Many NDA disputes settle after a strong demand letter or early motion practice. The threat of litigation often motivates compliance without going to trial.

Several defenses may be available depending on the circumstances:

Information-Based Defenses:

• Not confidential: Information was already public or not genuinely confidential
• Independent development: You developed the same information independently
• Prior knowledge: You knew the information before receiving it under the NDA
• Third-party source: You received it from someone else with no confidentiality obligation
• Reverse engineering: You derived it through permitted analysis of public products

Conduct-Based Defenses:

• No breach occurred: You did not actually disclose or misuse the information
• Authorized use: Your use was within the permitted purpose
• Consent: The disclosing party authorized the disclosure
• Compelled disclosure: You were legally required to disclose (subpoena, court order)

Contract-Based Defenses:

• NDA is unenforceable: Overbroad, unconscionable, or violates public policy
• Statute of limitations: The claim was brought too late
• Material breach by disclosing party: They breached first, excusing your performance

It depends on what the NDA says and where you are litigating:

American Rule (Default): Each party pays their own attorney's fees, regardless of who wins. This is the default in the US.

Contractual Fee-Shifting: If the NDA includes a fee-shifting provision, the prevailing party (or the specified party) can recover fees. Common formulations:

• Prevailing party: Whoever wins recovers fees (mutual)
• One-sided: Only one party can recover (resist these provisions)
• Breach-based: The non-breaching party recovers fees

Statutory Fee-Shifting: Some statutes provide for fee recovery:

• Trade secret statutes often allow fees for willful misappropriation
• Some states have fee provisions for certain contract claims

Practical considerations:

• "Reasonable" fees may be less than you actually spent
• Courts scrutinize fee requests and often reduce them
• Fee litigation can itself be expensive
• A judgment is worthless if the defendant has no assets

Often both, but the answer depends on who signed the NDA and who has assets:

Sue the Entity (Company) When:

• The company signed the NDA
• The individual acted within their employment scope
• The company has assets to satisfy a judgment
• The company benefited from the breach

Sue the Individual When:

• They personally signed the NDA
• They acted outside the scope of employment (personal benefit)
• They personally have assets
• You want to create personal deterrence

Sue Both When:

• Both signed or are bound by the NDA
• You want to maximize pressure and leverage
• Corporate veil piercing may be possible
• You want to prevent the individual from hiding behind the company

This varies by state and claim type:

Contract Breach Claims:

• Written contract: Typically 4-6 years (varies by state)
• California: 4 years for written contracts
• New York: 6 years for written contracts
• Delaware: 3 years for most contracts

Trade Secret Claims:

• Federal DTSA: 3 years from discovery
• State trade secret acts: Typically 3-4 years
• Discovery rule may toll the statute until you discover the breach

Important Considerations:

• Accrual: When does the clock start? Usually when the breach occurs, but discovery rules may apply
• Continuing breach: Ongoing violations may restart the clock
• Tolling: Fraud or concealment may extend the deadline
• Contractual shortening: Some NDAs shorten the limitations period (if enforceable)

Practical tip: Do not wait to assert claims. Even if the statute of limitations has not run, delay weakens your case and makes relief harder to obtain.