                               UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                               No. 09-2300


DECISION INSIGHTS, INCORPORATED,

                Plaintiff - Appellant,

           v.

SENTIA   GROUP,   INCORPORATED;   THOMAS           H.     SCOTT;     MARK
ABDOLLAHIAN; JACEK KUGLER; BRIAN EFIRD,

                Defendants - Appellees.



Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.    Claude M. Hilton, Senior
District Judge. (1:06-cv-00766-CMH-JFA)


Argued:   January 28, 2011                     Decided:      March 15, 2011


Before TRAXLER,    Chief     Judge,   and   MOTZ    and    KEENAN,    Circuit
Judges.


Vacated and remanded by unpublished per curiam opinion


Nicholas Hantzes, HANTZES & REITER, McLean, Virginia, for
Appellant. Edward F. O’Connor, THE ECLIPSE GROUP, LLP, Irvine,
California, for Appellees.


Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       Decision Insights, Inc. (DII) filed a complaint in June

2006       against       Sentia     Group,     Inc.       (Sentia)     and     the        four

individuals that founded Sentia (collectively, the defendants). 1

DII    alleged      in    its   complaint     that       Sentia’s    development      of    a

competing software application was based on materials obtained

from the defendants’ misappropriation of DII’s trade secrets.

DII    also    alleged      that     several       of    the    individual     defendants

breached contractual and fiduciary obligations owed to DII by

disclosing         DII’s    confidential           and    proprietary        information,

including         the    “source     code”        for    DII’s    software, 2     reports

containing         marketing        and      research          material,     information

contained in the user manual for the DII software at issue, and

certain information pertaining to DII’s clients.

       In June 2007, the district court granted the defendants’

motion      for    summary        judgment    on    all     DII’s    claims.         In    an

unpublished opinion issued in February 2009, this Court affirmed

the judgment of the district court in part and reversed in part.



       1
       The individual defendants named in DII’s complaint are
Mark Abdollahian, Brian Efird, Jacek Kugler, and Thomas H.
Scott.
       2
       “Source code” is a document written in computer language,
which contains a set of instructions designed to be used in a
computer to bring about a certain result. See Trandes Corp. v.
Guy F. Atkinson Co., 996 F.2d 655, 662-63 (4th Cir. 1993).



                                              2
Decision Insights, Inc. v. Sentia Group, Inc., 311 F. App’x 586

(4th    Cir.    2009)    (per       curiam).          We       remanded   the     case       with

instructions     to     the       district      court      to    consider,      among       other

issues,     whether       DII’s         software          application,       as    a     total

compilation, could qualify as a trade secret under Virginia law.

Id. at 593-94.        On remand, the district court again granted the

defendants’ motion for summary judgment, holding that DII failed

to   develop    facts     during        discovery         that    would   establish         that

DII’s    software,      as    a    compilation,           is    not   generally    known      or

ascertainable, and that all DII’s claims must be dismissed in

light of that holding.                  Upon review of the district court’s

judgment on remand, we vacate the district court’s judgment, and

we remand the case for further proceedings consistent with this

opinion.



                                             I.

        Because our prior opinion set forth the facts of this case

at great length, see id. at 587-91, we summarize the relevant

facts only briefly here.                 We review the factual record in the

light    most    favorable         to    DII,       the    non-moving      party       in    the

district court.         Hope v. Pelzer, 536 U.S. 730, 734 n.1 (2002).

        The record reflects that DII created software in the 1980s

called the “Dynamic Expected Utility Model” (EU Model), which is

an analytical tool used to prepare negotiating strategies.                                   The

                                                3
EU    Model    assesses     risk,       compares    the      impact       of    different

operating      positions,       and     details     the      relative       effects       of

selecting      various    alternatives.            Essentially,          the    EU   Model

applies    concepts      from    several    academic        disciplines,         including

mathematics,      economics,      political       science,       and    psychology,       to

predict for DII’s clients the outcome of a given political or

business situation.             DII owns the assets, copyright, and all

proprietary rights to the EU Model, which DII considers to be

its primary asset.

      Sentia was formed in November 2002 by the four individual

defendants in this case, Mark Abdollahian, Brian Efird, Jacek

Kugler,    and    Thomas    H.     Scott.         Three     of    these        defendants,

Abdollahian, Efird, and Kugler, were formerly affiliated with

DII, and each worked with the EU Model while employed by DII. 3

Abdollahian and Efird entered into nondisclosure agreements with

DII    that    restricted       their     ability      to    disclose          information

acquired      during   their     employment     with      DII.         Kugler    signed    a

similar nondisclosure agreement, but DII failed to execute the

agreement.       Additionally, Efird’s contract contained a covenant




      3
       Abdollahian provided executive consulting services to DII.
Efird is a former DII employee. Kugler is a former director of
DII and “major owner” of stock in DII.    Scott was not formerly
affiliated with DII.



                                            4
placing restrictions on his potential future employment with any

business competitor of DII.

      Sentia initially sought to obtain a software license from

DII for use of the EU Model.                 However, negotiations between the

parties did not result in an agreement.                           Sentia later hired

Carol       Alsharabati,    a   former       consultant       for     DII    who    worked

extensively on the source code for DII’s EU Model, to develop

software for a Sentia product that would compete directly with

DII’s software.          Alsharabati completed this task in about six

weeks,       which,     according      to        DII,     could     only     have     been

accomplished by using DII’s source code to create the Sentia

software.

      DII filed a complaint in the district court against the

defendants,       alleging      that     Abdollahian,         Efird,        Kugler,    and

Alsharabati disclosed DII’s trade secrets to Sentia in violation

of   the     Virginia   Trade    Secret       Misappropriations         Act,       Virginia

Code §§ 59.1-336 through -343 (the Act). 4                    According to DII, the

software developed by Alsharabati for Sentia is almost identical

to DII’s EU Model, both in terms of method and in the results

obtained       when   the    respective          programs     are     executed.        DII

asserted that Sentia’s software could not achieve results equal

to   DII’s     software     unless     all    the       parameters,    variables,      and

        4
            DII did not name Alsharabati as a defendant.



                                             5
sequencing associated with the programs are equal.                                  Although the

EU   Model        uses   certain       mathematical        formulas          that    are    in   the

public       domain,           DII     asserted       that        the        combination         and

implementation of these formulas in DII’s source code for the

software constitutes a trade secret.

       DII       also    alleged           that   Efird,     Kugler,         and     Abdollahian

breached their respective contractual and fiduciary obligations

by disclosing confidential and proprietary information owned by

DII.        Additionally,            DII    contended      that    Scott       conspired         with

Sentia       to     induce       DII’s       former     employees        to     breach        their

respective nondisclosure agreements with DII, and assisted the

defendants in misappropriating DII’s trade secrets. 5                                The parties

agree that Virginia law governs DII’s claims.

       After discovery, the defendants filed a motion for summary

judgment seeking dismissal of all DII’s claims.                                     The district

court      granted       the    defendants’        motion.        With       regard    to     DII’s

trade secret claims, the district court held that DII failed to

meet       its    burden       to     establish       that   the        EU    Model        software

qualified as a trade secret under the Act.                              The district court


       5
       DII asserted the following causes of action in its amended
complaint:   breach of contract (Count I), conspiracy to commit
breach of contract (Count II), conspiracy to injure another in
trade, business or profession (Count III), misappropriation of
trade secrets (Count IV), breach of fiduciary duty (Count V),
and conversion (Count VI).



                                                  6
did not address DII’s claims relating to the other materials

that   DII    asserted      were      its   trade       secrets,        including        reports

containing         marketing       and      research             material,           information

contained in the user manual for the DII software at issue, and

certain information pertaining to DII’s clients.

       With    regard      to    DII’s      breach         of     contract          claims,     the

district       court     held      that      DII       failed          to     identify         “any

confidential        or     proprietary        information              obtained        by      [the

defendants]        while    employed        at       DII        that        [was]     thereafter

misappropriated” that would violate the nondisclosure provisions

in Abdollahian’s and Efird’s agreements.                               The district court

also held that DII could not establish an enforceable contract

between      DII   and   Kugler    because        DII      did    not       execute     Kugler’s

agreement.

       DII    timely     noted     an     appeal       and,       as    stated        above,     we

affirmed in part, reversed in part, and remanded the case to the

district      court.       311   F.     App’x     at       587.        In    our     unpublished

opinion, we noted that DII’s trade secret claims were founded,

in part, “upon its software as a total compilation.”                                        Id. at

593.    We held that the district court “did not address whether

or   not     the   software      program,       as     a    total      compilation,           could

qualify as a trade secret.”                 Id.      Accordingly, we remanded the

case with instructions that the district court analyze DII’s

software compilation claim in light of our decision in Trandes

                                             7
Corp. v. Guy F. Atkinson Co., 996 F.2d 655 (4th Cir. 1993)

(applying Maryland law).           See 311 F. App’x at 593-94.             As stated

in our prior opinion in this case, we held in Trandes that a

“plaintiff’s alleged software compilation trade secret is to be

analyzed separate and apart from other software trade secret

claims,   and     that    production   of      source   code    is   an    acceptable

method of identifying an alleged compilation trade secret.”                        311

F. App’x at 594 (citing Trandes, 966 F.2d at 661-63.).

      We instructed the district court to determine first whether

DII “adequately identified its software compilation claim.”                        Id.

at 594.     If DII made such a showing, we stated, the district

court “should then consider the sufficiency of DII's showing as

to the existence of a trade secret and [thus] a triable issue of

fact.”    Id.     We provided further that “the district court should

specifically address the relevant criteria for establishing the

existence of a trade secret under Va. Code. § 59.1-336, namely,

whether or not the compilation has independent economic value,

is generally known or readily ascertainable by proper means, and

is subject to reasonable efforts to [maintain] secrecy.”                     Id.

      Additionally,        we   remanded       DII’s   claims   concerning     other

confidential information that DII alleged was misappropriated by

the   defendants,        including   the       operating   manual    for     the   DII

software,       DII’s    reports     containing        marketing     and    research

material, and DII’s client contact information.                    Id. at 595.      We

                                           8
observed       that      the    district      court    failed    to    discuss       these

categories         of     alleged       proprietary         materials,        and        that

“[d]epending on the circumstances, any of this information could

be characterized as trade secrets” under the Act.                           Id.   We also

remanded DII’s breach of contract claims to the district court,

with       instructions        that   the    court    “address      DII's    contractual

claims in light of [the court’s] findings with respect to the

existence of a trade secret.” 6               Id. at 596.

       On remand, the district court first held that DII met its

burden under Trandes to demonstrate that DII’s source code was

unique.       However, the district court concluded that DII failed

to     satisfy     its    burden      to     show    that   DII’s     software,      as    a

compilation, was not generally known or readily ascertainable by

proper means.            In reaching this conclusion, the district court

found      that    DII    “failed     to     distinguish    which     aspects       of    its

software, as a compilation, are publicly available or readily

ascertainable and which are not.”                     The district court did not

address the other relevant criteria under the Act, including

whether      the    compilation        had    independent     economic       value,       and



       6
       We affirmed the district court’s grant of summary judgment
on the issue whether DII met its evidentiary burden to show that
any of the twelve individual portions of the program within
DII’s source code could constitute a trade secret. Id. at 595.
That issue is not before us in this appeal.



                                               9
whether the compilation was subject to reasonable efforts by DII

to maintain the secrecy of the information.

      The district court held that DII’s other claims, including

its   claims      concerning     DII’s   marketing,          research,      and    client

information        material,     as   well    as     DII’s    breach      of     contract

claims, all failed because DII did not satisfy its evidentiary

burden      for    the   software      compilation       trade       secret       claims.

Accordingly, the district court awarded summary judgment to the

defendants on all DII’s claims.                DII timely appealed from the

district court’s judgment.



                                         II.

                                         A.

      The    primary     issue   in   the    present     appeal      is     whether      DII

adduced     enough    evidence     during     discovery       to    allow    a    jury    to

reach    the      ultimate    conclusion      that    the     DII    software,      as    a

compilation, is not generally known or ascertainable by proper

means, within the meaning of Section 59.1-336 of the Code of

Virginia.         As discussed below, we conclude that the district

court erred in holding that DII failed to satisfy its burden of

producing sufficient evidence on this issue.

      We review the district court’s decision granting summary

judgment de novo.            See S.C. Green Party v. S.C. State Election

Comm’n, 612 F.3d 752, 755 (4th Cir. 2010).                     Under Rule 56(a) of

                                         10
the Federal Rules of Civil Procedure, summary judgment should be

granted if “the movant shows that there is no genuine dispute as

to any material fact and the movant is entitled to judgment as a

matter of law.”           Fed. R. Civ. P. 56(a); see Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247 (1986) (construing former Rule

56(c)   of    the      Federal     Rules    of    Civil    Procedure).            A   genuine

dispute exists only if “the evidence is such that a reasonable

jury could return a verdict for the nonmoving party.”                             Anderson,

477    U.S.   at      258.    In    conducting       our   analysis,         we    view   the

evidence in the light most favorable to the non-moving party.

See Hope, 536 U.S. at 734 n.1.

       “[T]he         determination        whether     a      trade     secret        exists

ordinarily presents a question of fact to be determined by the

fact    finder         from   the     greater        weight     of     the        evidence.”

MicroStrategy, Inc. v. Li, 601 S.E.2d 580, 589 (Va. 2004).                                The

Act defines a “trade secret” as “information, including but not

limited      to   a    formula,     pattern,      compilation,        program,        device,

method, technique, or process, that:

       1. Derives independent economic value, actual or
       potential, from not being generally known to, and not
       being readily ascertainable by proper means by, other
       persons who can obtain economic value from its
       disclosure or use, and

       2. Is the subject of efforts that are reasonable under
       the circumstances to maintain its secrecy.”




                                             11
Va. Code § 59.1-336.             As described in our prior opinion in this

case, the determination whether information qualifies as a trade

secret      under      the      Act     depends        on    “whether          or     not     the

[information] has independent economic value, is generally known

or   readily    ascertainable           by    proper    means,      and       is    subject    to

reasonable efforts to [maintain] secrecy.”                         311 F. App’x at 594

(citing Va. Code. § 59.1-336).

       We have recognized that a trade secret may be composed of

publicly-available           information        if     the    method       by       which    that

information is compiled is not generally known.                                For instance,

in Servo Corp. of America v. General Electric Co., 393 F.2d 551,

554 (4th Cir. 1968), we held that a trade secret “might consist

of several discrete elements, any one of which could have been

discovered      by     study     of     material       available         to    the    public.”

Additionally,        we   have    held       specifically         that    computer          source

code   as   a   compilation           can    qualify    as    a    trade      secret.         See

Trandes, 996 F.2d at 664.                   Moreover, the definition of a “trade

secret” provided in the Act explicitly includes a “compilation”

among the types of information that qualify for protection under

the statute.         Va. Code. § 59.1-336.

       Although it is clear that a software compilation such as

DII’s EU Model can qualify for protection as a trade secret, the

question presented here is whether the record supports DII’s

contention      that      the   DII     software       is    not   generally          known    or

                                               12
readily ascertainable by proper means.                      As described below, DII

relies on deposition testimony and reports from two witnesses

that DII presented in support of the argument that the EU Model

software, as a compilation, is not generally known or readily

ascertainable.

       The defendants, however, urge that we reject the testimony

offered    by   these        two    witnesses    as   “ultimate    conclusions”            of

individuals       affiliated         with   DII.       The    defendants       maintain,

without citing any authority, that the testimony of these two

witnesses “is clearly not evidence and cannot be used to satisfy

[DII’s] burden.”            We disagree with the defendants’ argument.

       DII presented the report of expert witness Dr. Bruce Bueno

de    Mesquita,       the    Silver      Professor    of     Politics    at    New       York

University      and    an     authority     on   expected      utility    theory,         the

theory upon which the EU Model is based.                      Dr. Bueno de Mesquita

was a founder of DII, and he co-authored the original source

code for DII’s EU Model in the 1980s.

       In his report, Dr. Bueno de Mesquita characterized some of

the   elements       of     the    DII   software     as    “proprietary      .     .    .[,]

elements that have not been published in my research or anyone

else’s.”     Dr. Bueno de Mesquita’s report expressly rebutted the

testimony       of     the        defendants’      expert     witness,        Dr.       Peter

Alexander,       who        asserted      that     Sentia’s     “alleged          uses     of

proprietary DII methodologies are well known concepts from the

                                            13
open literature.”      Additionally, Dr. Bueno de Mesquita stated in

his report that “[t]he method for calculating the value of the

discount term that triggers the stopping rule and – crucially –

leads    to   the    predicted       outcome    is    proprietary;     that    is,

unpublished. . . . [N]o formula for the actual calculation is

stated in . . . [any] publication that addresses the forecasting

model on which DII’s software is based.”

       DII also presented the report and deposition testimony of

Gary    Slack,   a   current   DII     employee      and   co-author   of     DII’s

software program.      Mr. Slack stated in his report and during his

deposition testimony that many aspects of the source code, and

hence the compilation of the source code as a whole, were not

public knowledge or readily ascertainable by proper means.                       In

his report, Mr. Slack identified and described 13 proprietary

processes in the source code, and stated that “[t]he collection

of   these    processes   as     a    whole    and   the   sequence    of     these

processes also serve as a proprietary aspect of [DII’s EU Model

software].”      Mr. Slack’s expert report also included a “flow

chart,” which set forth the sequencing of DII’s source code,

including its organization and structure.                  Mr. Slack testified

that portions of this process, as well as the entire sequencing

of the process, were not known to the public.

       During his deposition testimony, Mr. Slack also identified

numerous variables that are part of DII’s software code for the

                                        14
EU Model, noting that the set of these variables had “never been

disclosed to anyone else.”             Mr. Slack further testified that

while a few of these individual variables were in the public

domain, numerous other of these variables were not in the public

literature or known outside of DII.                 Additionally, Mr. Slack

testified that “[n]one of the code has ever been shared with

anybody that has not signed a confidential[ity] agreement.”

     In light of the foregoing evidence offered by Dr. Bueno de

Mesquita and Mr. Slack concerning the nonpublic and proprietary

nature of DII’s software code, we conclude that the district

court   erred      in   holding     that     DII   failed    to    satisfy   its

evidentiary burden to show that DII’s software compilation was

not generally known or readily ascertainable by proper means.

Therefore,    we    conclude    that   DII      adduced   sufficient   evidence

during discovery to render this issue appropriate for decision

at a trial.

     In view of its analysis, the district court did not address

the other criteria specified by the Act, including whether DII’s

software code has independent economic value and whether DII

engaged in reasonable efforts to maintain the secrecy of the

software   code.        See   Va.   Code.   §   59.1-336.     On   remand,   the

district court should consider these criteria, as well as the

adequacy of DII’s evidence that the defendants misappropriated



                                       15
DII’s software code, in determining if DII’s claims under the

Act should proceed to a trial.

                                            B.

     In addition to the EU Model software, DII also claimed as

trade      secrets     other        materials        that        DII   alleged      were

misappropriated        by     the   defendants,          including     the     operating

manual for the DII software, DII’s reports containing marketing

and research material, and DII’s client information.                             In our

prior opinion, we directed the district court to examine these

other categories of purported trade secrets under the criteria

set forth under the Act.            311 F. App’x at 595.

     On     remand,     the     district         court    dismissed     these     claims

summarily,     holding       that    “[t]he       failure    of    [DII’s]      software

compilation claim requires that these proprietary claims fail.”

We disagree that the resolution of these other categories of

purported trade secrets rises or falls on the issue whether the

DII’s     software     compilation          qualifies       as     a   trade    secret.

Regardless, the basis of the district court’s holding on this

issue is no longer valid in light of our conclusion above, and a

remand to the district court for further consideration of these

separate issues is required.                In considering DII’s trade secret

claims on remand for these other categories of materials, the

district court should apply the criteria specified under the

Act’s     definition    of     a    trade    secret,       including     whether    the

                                            16
materials at issue have independent economic value, whether the

materials are generally known or readily ascertainable by proper

means, and whether DII engaged in reasonable efforts to maintain

the secrecy of the information.

                                           C.

      The district court also dismissed DII’s breach of contract

claims,   including       the      claim        for       breach     of    nondisclosure

agreements asserted against Abdollahian and Efird, the claim for

breach of a noncompetition agreement asserted against Efird, and

the   claim   for   breach      of   a   nondisclosure             agreement       asserted

against Kugler for the contract that he signed but which DII

failed to execute.         The sole basis for the district court’s

dismissal of these claims was the court’s earlier holding that

DII failed to meet its evidentiary burden with respect to its

trade   secret   claims    pertaining           to    the    software       compilation.

Because we disagree with the district court’s holding on that

issue, we also vacate the district court’s judgment relating to

DII’s   contract-based       claims      and     remand       those       claims    to   the

district court for further consideration.                          Consistent with the

directive of our prior opinion, we also instruct the district

court to consider whether an implied agreement existed between

DII and Kugler pertaining to DII’s confidential and proprietary

information,     despite     the     lack       of    a    fully     executed      written

agreement between the parties.             See id. at 596-97.

                                           17
         We note that separate consideration of DII’s various breach

of contract claims will be necessary regardless of the outcome

on remand of DII’s trade secret claims concerning its software

compilation.         Those breach of contract claims do not require a

finding that the materials at issue qualify as a trade secret,

because        the   respective   nondisclosure   clauses   apply   to   “any

confidential or proprietary information . . . owned or used by”

DII. 7       This contractual language is broader than the definition

of a “trade secret” under the Act and, thus, the nondisclosure

language may apply to the software code and other proprietary

materials at issue even if those materials are not covered by

the Act.         Therefore, we direct the district court to consider

         7
             The contract clauses at issue provide in full:

         The [Party] acknowledges that he will, as a result of
         his association with [DII], have access to and be in a
         position to receive information of a confidential or
         proprietary nature including trade secrets.          The
         [Party]   agrees  that    he  will   not,  during    the
         association with [DII] or thereafter, disclose to
         anyone whomsoever or use in any manner whatsoever any
         confidential   or   proprietary  information,   whether
         patentable or unpatentable, concerning any inventions,
         discoveries, improvements, processes, methods, trade
         secrets, research or secret data (including but not
         limited to models, formulas, computer programs and
         software developments), or other confidential matters
         possessed, owned, or used by [DII] that may be
         obtained or learned by the Representative in the
         course of, or as a result of his association with
         [DII], except as such disclosure or use may be
         required in the normal course of doing business with
         [DII] and pursuant to [DII’s] prior written consent.



                                       18
the language of the respective nondisclosure clauses when the

court analyzes DII’s breach of contract claims.



                                   III.

     For   these   reasons,   we   conclude   that   the   district   court

erred by granting the defendants’ motion for summary judgment on

all DII’s claims.     We remand the case to the district court for

further proceedings consistent with this opinion.



                                                     VACATED AND REMANDED




                                    19
