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A potential partner from a failed joint venture, who signed a NDA, is starting up a competing company. Can I stop him? How?

Los Angeles, CA |

My friend and I explored an opportunity to form a joint venture partnership, but it failed. He signed a standard NDA before I disclosed business records, plans, financial projections, potential customers, technical information, future products, inventions, product design information, pricing structure, and other proprietary information to him.

Later I found out that he tried to start up a competing company with another individual that we were vetting as a potential partner. I have a proof that my ex partner disclosed some confidential information to the other potential partner that we were vetting, who did not sign a NDA with me.

Attorney Answers 5

  1. You need to immediately consult with a business litigation attorney as you may be able to sue your former partner for breaching the NDA (breach of contract).

  2. You may have various causes of action against your friend. It is unclear whether your friend was your partner. You should be aware, however, that such litigation is expensive and rarely handled on a contingency basis. In many cases the plaintiff does not have sufficient financial resources to prosecute such an action. Additionally, third parties (customers and suppliers) do not want to be involved in such litigation and business can be destroyed. Good luck.

    -- Michael

    Michael R. Daymude, Attorney at Law
    Sherman Oaks Galleria – Comerica Bank Building
    15303 Ventura Boulevard, Suite 900
    Sherman Oaks, CA 91403-3199
    (818) 971-9409

    SINCE 1974. My answers are for general information only. They are not legal advice. Answers assume California law. I am licensed in California, only. Answers must not be relied upon. Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for advice and counsel. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference

  3. You need to consult with a business lawyer in your area about this, so that there can be a close reading of the Non-Disclosure Agreement. Your potential partner will probably claim Independent derivation (starting the company without using anything gained from the NDA), and that needs to be examined closely, and you should be prepared to disprove it. 510-208-5500. This answer does not create an attorney-client relationship. It is not legal advice, because it is only of a general nature. Please contact a lawyer qualified in your jurisdiction to discuss your situation in confidence, using your factual details. Avvo answers are only general legal responses. Item 9 of's Terms and Conditions are incorporated in this disclaimer as though it were printed here.

  4. This is going to depend upon: 1) the terms of the NDA, 2) the type of product being discussed, 3) the proof you have concerning the leaked information, and, 4) the proof you have concerning the originator of the IP. Please feel free to contact me for a free consultation. 408 796-9616

  5. I would have to agree with my other colleagues here, who are recommending that you seek out a business attorney to discuss this matter with and have your questions answered.

    The terms of the NDA that your ex partner signed are important to determine what type of legal rights and remedies you may have pertaining to the “alleged” disclosed confidential information. Also, the NDA or your partnership agreement (if there exists one) may include non-compete clause(s) prohibiting either you or your ex partner, or both from competing with one another under certain circumstances. Without having more information about the circumstances of this matter and without having reviewed the NDA and other possible agreements pertaining to this joint-venture partnership, it would be premature to say whether you can stop your ex partner and how.

    If you are not currently represented by an attorney and wish to discuss this matter, you can reach me at (424) 270-0061 or for a free consultation. Thank you,

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