Confidential information is valuable because it’s confidential. That value is wrecked when a recipient of your confidential information discloses or uses it in a way that breaches your agreement. The fallout can’t be undone with an apology or a revised NDA, especially not if you wait.
It may take hours, days, or weeks before your team discovers a breach. However, when you do, it’s important to take prompt action and perform damage control.
NDAs Are Legal Infrastructure
A good confidentiality and non-disclosure agreement defines the exact confidential information being protected, duties for protecting that information, and the consequences of a breach.
Your agreement should clearly demarcate your confidential information. Confidential information can include traditional business secrets like customer lists, procedures, and pricing formulas and also other valuable information like source code, business innovations, and marketing plans. Use general and specific descriptions to capture all these types of valuable, confidential material.
Duties for confidential information should include nondisclosure to third parties, limiting the scope of use, and limiting the people who can receive it. For especially sensitive information, require that it be stored with encryption or password protection. Clear terms force the recipient to apply real protections, not vague promises. Not all data can be protected in the same way, and some data is more attractive to potential bad actors and requires stronger protections.
Consequences should include your right to immediate equitable relief, like injunctions without the need to post bond, and attorneys’ fees. These provisions can let you walk into court and shut things down quickly. Without them, your leverage dies the moment information gets out.
Wait Too Long, and the Courts Assume the Breach Isn’t Irreparable
Courts don’t care how upset you are. They care how fast you act.
Practically, a delay permits the breaching party to continue using your confidential information and increases the harm to your business. Legally, a delay in seeking injunctive relief can weigh against granting such relief, particularly if the delay undermines claims of irreparable harm or an imbalance of hardships.
If you hesitate, even for a few days, you risk showing the court that the breach is not urgent. If a court thinks the breach is not urgent, then you will have a hard time getting emergency relief.
The Clock Starts Now
In the first 48 hours, speed is strategy. Here’s what that looks like:
- In the first 6 hours – Lock down compromised systems, alert your legal teams, and issue a litigation hold.
- By 24 hours – Capture a forensic snapshot, identify what was taken, and begin preparing declarations.
- By 48 – Have your request for court relief and supporting documents ready to file.
You typically do not want to tip off the other party with a cease-and-desist unless you’re ready to file that same day. Every move should position you for court, not negotiation.
Emergency Tools That Actually Work
Temporary restraining orders (TROs) and preliminary injunctions can stop misuse fast. They force a return of data and bar further use if you can show immediate harm and a likelihood of success.
Under the Defend Trade Secrets Act, you can also request an ex parte seizure. This means court can issue an order directing law enforcement to seize property without notice to the adverse party. This is a powerful tool that can be used to prevent the propagation or dissemination of a trade secret and preserve evidence.
Even if the court does not grant a TRO or seizure, the request alone signals to the judge and the opposing party that you’re serious.
Arbitration Clauses Can Slow You Down
Plenty of contracts route disputes to arbitration. That’s fine for payment disputes or breach-of-warranty claims but not for trade secret emergencies. Arbitration moves too slowly for that. You need immediate court access and enforcement. Your agreement should carve out exceptions for injunctions tied to confidential information. Better still, include terms that allow forensic inspections and immediate injunctive relief without a bond.
Be Ready Before It Happens
Build your response plan now. Audit your data handling. Require departing staff to confirm deletion or return of sensitive files. Run incident drills with IT, legal, and your executives. Quantify what your trade secrets are worth, because the court will ask.
The company that treats a breach like a fire, not a leak, is the one that gets relief and maintains the value of its confidential information.
Call Baker Jenner Before You Need Court Orders
If your trade secrets are already out there, you can’t wait. If they aren’t yet, you need to be prepared to take action. Baker Jenner helps growth-minded businesses build contracts that hold up and move fast when the pressure hits. Call (404) 400-5955.
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