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

Asked about 1 year ago - 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. Michael Raymond Daymude


    Contributor Level 20


    Lawyers agree


    Answered . 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.... more
  2. Sagar P. Parikh

    Contributor Level 19


    Lawyer agrees


    Answered . 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).


  3. Andrew Kevin Jacobson


    Contributor Level 16


    Lawyer agrees


    Answered . 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.

    www.bayoaklaw.com. 510-208-5500. This answer does not create an attorney-client relationship. It is not legal... more
  4. Sarvey Askarieh

    Contributor Level 7

    Answered . 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 saskarieh@yevraslaw.com for a free consultation. Thank you,

    The information and materials provided by SARVEY ASKARIEH on this Website are for informational purposes ONLY.... more
  5. Charles Michael Standard

    Contributor Level 9

    Answered . 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

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