Remedies: Equitable/Injunctive Remedies for Breach
NDA
Table of Contents:
Irreparable Harm
Balance of Harm
Remedies: Equitable/Injunctive Remedies for Breach
If a party believes that the recipient of confidential information has breached the terms of the NDA, or if such breach appears imminent, that party may, among other things, seek relief in the form of a court order enjoining (temporarily or permanently) the recipient from engaging in such breaching activity. A court may grant such injunctive relief if the movant establishes the following elements: (1) it has a substantial likelihood of success on the merits of the underlying case; (2) the movant will suffer irreparable harm in the absence of an injunction, (3) the harm suffered by the movant in the absence of an injunction would exceed the harm suffered by the opposing party if the injunction issued, and; and (4) an injunction would not disserve the public interest.
A party can include terms in the NDA to help pave the way for a possible motion for injunctive relief by including certain “self-serving” terms. For example, a party may reserve the right to seek such relief as follows:
Exemplar N23A-1
Recipient agrees that Company should be entitled to obtain interim, temporary, preliminary, interlocutory, final and permanent injunctive relief restraining Recipient from breaching, and requiring Recipient to comply with, its obligations under this Agreement.
Apart from a party’s right to seek injunctive relief, a party’s ability to obtain injunctive relief can be further advanced by including terms that specifically address the required elements of injunctive relief in advance:
Irreparable Harm
To obtain injunctive relief, the movant must show that its injury is irreparable even with payment of money, or that such payment is an inadequate remedy. The following exemplars address this key element:
Exemplar N23A-2
Recipient agrees that the unauthorized disclosure or use of the Company Source Materials or the breach of Recipient’s other obligations hereunder will cause irreparable harm and significant injury for which money damages will be inadequate and impossible to ascertain.
Exemplar N23A-3
Each Party acknowledges that a violation of this Agreement would cause the Disclosing Party irreparable harm and the remedies at law available to the Disclosing Party are not sufficient remedies for unauthorised use or disclosure of Confidential Information and that Disclosing Party shall be entitled, in addition to any other rights or remedies, including monetary relief, to such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction, without the necessity of proof of actual damage.
Exemplar N23A-4
Each of the parties acknowledges that any breach of this Agreement shall result in irreparable and continuing damage to the non-disclosing party and, therefore, in addition to any other remedy which may be afforded by law, any breach or threatened breach of this Agreement may be prohibited by restraining order and/or injunction or any other equitable remedies of any court of competent jurisdiction.
Exemplar N23A-5
Recipient acknowledges that monetary damages may not be a sufficient remedy for unauthorized disclosure of Confidential Information and that the Disclosing Party may seek, without waiving any other rights or remedies, such injunctive or equitable relief as may be deemed proper by a court of competent jurisdiction.
Balance of Harm
In considering a motion for injunctive relief, a court is required to balance the harm to the movant if the injunction were not granted against the harm that would befall the opposing party if an injunction were granted. The following exemplar is intended to help the court tip that balance in favor of the movant/disclosing party:
Exemplar N23A-6
Recipient hereby acknowledges the importance to Company of strict compliance with the terms of this Agreement and acknowledges that Company’s interest in the strict enforcement thereof will outweigh the balance of convenience or harm which Recipient may suffer as a result of the strict enforcement of its obligations under this Agreement.