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Alex J.
Alex J., Solicitor
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Experience:  Solicitors 2 years plus PQE
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nda i have a mutual confidentiality agreement nda/non compete

Customer Question

nda
i have a mutual confidentiality agreement nda/non compete taken from standard law depot stock.
my company (that signed the agreement ) went into administration and was bought/able to carry on trading without any break under the "new company" . money was paid and debt was taken on and the admin process was undertaken etc
is the nda now owned by the newco or not worth the paper it was written on?
Submitted: 1 year ago.
Category: Law
Expert:  Alex J. replied 1 year ago.
Alex J. :

Hi, Thank you New co becomes a separate legal entity therefore it would have to eithger sign up to the NDA or have the NDA novated. Is some one trying to enforce the nda against newco?

Alex J. :

*either (my apologies for the typo).

JACUSTOMER-1ik6kxcv- :

how would the nda have been novated? the newco was purchased by my partner and i owned the previous co and the new co's name ( all of which is owned by him now)

JACUSTOMER-1ik6kxcv- :

a big company have taken everything we told them about our product and how to make it and market it and used that to do just that themselves

JACUSTOMER-1ik6kxcv- :

i found the nda but it was signed between oldco and them ( just 2 months before the administration/liquidation thing)

JACUSTOMER-1ik6kxcv- :

the newco did novate some debt over and some machine agreements over but did not get in contact with everyone the oldco had nda's wuth and get them "redone"

Alex J. :

Hi, Thank you. If you are enforcing the NDA that is different.

Alex J. :

When you transferred the assets from Old Co to New Co did you do a formal assignment? Including an assignment of contracts?

Alex J. :

Forget the novation for a moment - you can assign the benefit of a contract (including an NDA) but you need to ensure that you give the other notice of the said assignme

nt.

JACUSTOMER-1ik6kxcv- :

am not sure.

Alex J. :

Are the other company breaching the non compete element of the NDA?

JACUSTOMER-1ik6kxcv- :

is it something we would have done between ourselves ie oldco and newco or would we have had to involve the people we signed with?

JACUSTOMER-1ik6kxcv- :

yes massively breaching it - come back to chat!! ;-)

JACUSTOMER-1ik6kxcv- :

they knew we went into admin and continued under a new co - they continued working with us under the newco. i did reference the nda with them when i was in newco

Alex J. :

Hi, Thank you. It is something that the administrator would have done when they sold you the assets of old co to new co.

Alex J. :

Did you say to them the NDA had been transferred to New Co?

Alex J. :

http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/136 - This is the legal requirement of giving notice.

JACUSTOMER-1ik6kxcv- :

we have a little food product that is very hard to make, they packed it for us, suggested to us that we could keep our machines there and snooped around a lot. i tried to get them to help me with the business and disclosed whole biz plan numbers and everything. they have stolen the lot and launched my product, same name( it was something i couldnt trademark "black garlic" etc

Alex J. :

If you want to take the view that the NDA was properly assigned to NewCo - then of course you can look to enforce its terms.

Alex J. :

Have they go your machines? Can you quantify how much you have lost?

JACUSTOMER-1ik6kxcv- :

i didnt officially use those words - i will look at the email. i referred to it and suggested we needed to change the address on it or something but i dont think they signed that copy ( bear in mind at this point most of the damage was done/disclosed)

Alex J. :

If you did try and enforce the contract then ultimately it will be for a court to decide whether the restrictions are still valid.

Alex J. :

Potentially you could still sue them for the losses suffered.

JACUSTOMER-1ik6kxcv- :

they have launched the same product with same name

Alex J. :

Unfortunately there are clearly some gaps in any claim you want to bring and playing devils advocate they have a defence. However that is not to say you do possibly have a claim as well. It may be worth sending them a solicitors letter and you may be able to get some money out of them even if it is through a settlement.

Alex J. :

Doesnt new co own the name of the product?

JACUSTOMER-1ik6kxcv- :

they (almost definitely ) got all they needed from us, the introduction to the product, how to make it its uses its potential etc

Alex J. :

Even without a registered Trade Mark they are potentially passing your (newcos) trading name. This could also be a claim.

JACUSTOMER-1ik6kxcv- :

no we couldnt register black garlic even though it was new and unheard of because by the time we tried some chinese co was suggesting they sold it online too. now it has been commoditised somewhat.

JACUSTOMER-1ik6kxcv- :

yes we have some passing off claims but i want to do them on the nda

JACUSTOMER-1ik6kxcv- :

i will contact the administrator and find out if they did the assignment thing.

Alex J. :

You need to ask whether the administrator assigned the benefit of all contracts to the New Co?

JACUSTOMER-1ik6kxcv- :

ok

Alex J. :

I have plenty of experience in dealing with pre pack administrations. If you have any further points your want to discuss I will be available. I can switch this thread to Q and A mode?

JACUSTOMER-1ik6kxcv- :

shall i find out re the assignment first? is it normal practice?

Alex J. :

Hi, Thank you. Ask the administrator - it is required to make any assignment of a contract valid. If the administrator did not do it, then you will have to rely on the email that was sent notifying the other company of the transfer.

JACUSTOMER-1ik6kxcv- :

ok

Alex J. :

I wish you the best of luck and look forward to hearing from you. Kind regards AJ

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