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Chapter 27 - Software Licensing and Maintenance Contracts

27.6 Intellectual property (IP) and ownership

27.6.3 Trade secrets

Any information that may be used in the operation of a business and that is sufficiently valuable to afford an actual or potential economic advantage is considered a trade secret. Pursuant to § 59.1-336 of the Code of Virginia, "trade secrets" include formulas, patterns, compilations, programs, devices, methods, techniques or processes that derive independent economic value from not being generally known, and not being readily ascertainable through proper means by other persons who can obtain economic value from its disclosure or use. Trade secrets are subject of reasonable efforts to maintain their secrecy. Examples of trade secrets can be formulas for products, such as the formula for Coca-Cola; compilations of information that provide a business with a competitive advantage, such as a database listing customers; or advertising strategies and distribution processes. Unlike patents, trade secrets are protected for an unlimited period of time, and without any procedural formalities.

End user license agreements (EULAs) traditionally contain prohibitions against the reverse engineering of software to protect the trade secrets contained in the code.

In addition, §§ 2.2-4342 and 2.2-4343 of the Virginia Public Procurement Act provides that a bidder, offeror, or contractor shall not improperly designate as trade secrets or proprietary information (i) an entire bid, proposal, or prequalification application; (ii) any portion of a bid, proposal, or prequalification application that does not contain trade secrets or proprietary information; or (iii) line item prices or total bid, proposal, or prequalification application prices.

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