Experian Info. Solutions, Inc. v. Nationwide Mktg. Servs. Inc.

Citation893 F.3d 1176
Decision Date27 June 2018
Docket NumberNo. 16-16987,16-16987
Parties EXPERIAN INFORMATION SOLUTIONS, INC., Plaintiff-Appellant, v. NATIONWIDE MARKETING SERVICES INCORPORATED, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Robert Unikel (argued), Arnold & Porter Kaye Scholer LLP, Chicago, Illinois; Max Gavron, Oscar Ramallo, and Rhonda R. Trotter, Arnold & Porter Kaye Scholer LLP, Los Angeles, California; for Plaintiff-Appellant.

Mark A. Fuller (argued) and Christopher W. Thompson, Gallagher & Kennedy P.A., Phoenix, Arizona, for Defendant-Appellee.

Marcella Ballard, Venable LLP, New York, New York; Emilio W. Cividanes, Venable LLP, Washington, D.C.; for Amicus Curiae The Direct Marketing Association Inc., D/B/A The Data & Marketing Association.

Before: Mary M. Schroeder and William A. Fletcher, Circuit Judges, and Sara Lee Ellis,* District Judge.

SCHROEDER, Circuit Judge:

The novel federal question in this appeal is whether lists of names with addresses are copyrightable when they are the product of a sophisticated process to ensure accuracy and utility. In other words, whether such lists are more like a telephone book, that the Supreme Court has held lacks any creative spark, or more like Joyce’s Ulysses that changed the course of 20th century literature. The answer, it turns out, lies somewhere in between, but closer to a telephone book. The name and address pairings are only entitled to limited protection under the copyright laws. If proper safeguards are maintained, the lists may also be protected as trade secrets. We hold in this case that the Plaintiff, Experian Information Solutions, Inc., ("Experian"), established that its lists were copyrightable but failed to establish that its copyright had been infringed. We therefore affirm the District Court’s summary judgment in favor of the Defendant, Nationwide Marketing Services, Inc., ("Natimark"), on the copyright infringement claim, but reverse the state law trade secret claim and remand it for further proceedings.

Factual and Procedural Background

Experian is in the business of compiling databases and licensing portions of them to companies for use in their marketing campaigns. Since 1998, it has compiled what is now known as the ConsumerView Database ("CVD") that has a copyright registration for the "selection, coordination, arrangement and compilation of data ...." The CVD contains more than 250 million records, each pertaining to an individual consumer, and includes hundreds of "fields," each denoting a particular attribute of the consumer, such as age, earnings, or purchase habits, as well as behavior predictions. This litigation concerns compiled pairings of names and addresses. These represent one of the most lucrative components of the CVD, because mail marketers pay substantial amounts for licenses to utilize Experian’s name and address pairings. The value, according to Experian, results from the process by which Experian determines the accuracy of its pairings and the utility of the selection of the pairings it includes in the CVD for its marketing clients.

Experian obtains its name and address data from a variety of sources, such as catalogue purchase data, cable company records, real estate deeds, and warranty cards signed by consumers at retail stores. For its database, Experian picks from roughly 2,200 public and proprietary sources that it believes have reliable, value-adding data. In determining whether to include a new source in its database, Experian runs the source through tests to measure the potential new data’s quality and to identify the differences between the new source’s data and existing data in the CVD. Experian’s employees review the test results and do not add any data to the CVD until they approve the source. Even if a source is validated, however, not all name and address data are added to the CVD. Experian excludes name and address pairings it believes are not valuable to its clients. Excluded are business addresses and addresses of individuals in prison and the very elderly.

Experian also resolves conflicts between data sources. Such conflicts are resolved utilizing thousands of "business rules" or algorithms to analyze data from each source and determine which name and address pairing should be included in the CVD. The data must be kept current, and the business rules are regularly updated on the basis of client feedback. Experian estimates that it expends more than $10 million annually to compile and update the CVD.

Experian is not alone in the database compiling industry. There are at least four other major compilers. Their respective methodologies also yield lists, but according to Experian, the lists have material differences in content.

Defendant Natimark is a smaller and more recent addition to the consumer database compilation industry. It is located in Phoenix, Arizona. In 2011 it acquired a database, the National Consumer List ("NCL") in order to resell the data. The NCL has data for approximately 200 million consumers.

The seeds of this litigation were sown in April 2012 when a data broker acting on behalf of Natimark attempted to sell Experian a data compilation of children’s birthdays, coupled with the name and address pairings of their parents. When Experian tested the name and address pairings in the sample the data broker provided, and compared them with Experian’s own CVD pairings, Experian found a match rate of more than 97%, leading it to suspect that the data had been stolen. Experian’s expert later compared Natimark’s pairings with Experian’s and found similar match rates of approximately 94%. Also suggesting stolen data was the price Natimark paid for the data which, according to Experian, was unusually low and unaccompanied by a customary written agreement with industry-standard restrictions on maintenance and use.

After confronting Natimark with its conclusion that the data had been copied, Experian filed this action in March 2013 in the U.S. District Court for the District of Arizona claiming copyright infringement. When the District Court ruled that the allegedly-infringed pairings were not copyrightable, Experian added a claim for trade secret misappropriation, and argued that the pairings were trade secrets that had been stolen. The District Court granted summary judgment for Natimark, holding that Experian did not have a valid copyright or trade secret in its compilation of names and addresses. The court held that the compilation of pairings lacked sufficient creativity or originality to merit copyright protection. It similarly held that the pairings of names and addresses could not constitute trade secrets and, even if they could, Experian had not established a triable issue with respect to its claim that Natimark knew or had reason to know that the pairings were either secret or stolen.

Experian filed a timely appeal with respect to both the copyright and trade secret claims.

Discussion
I. Copyright infringement claim
A. Copyrightability of the pairings as compilations

The boundaries of copyright protection are by now well-settled. Facts are not copyrightable and original works are. See Feist Publ’ns, Inc. v. Rural Tel. Serv., Co. , 499 U.S. 340, 344–45, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) ( Feist ). In between, however, are to be found a variety of works, including lists, compilations, directories, and guides that include facts, but demonstrate varying degrees of creativity in their selection, arrangement, or coordination. This case is about the area in between.

Our Constitution provides the basis for copyright protection, and authorizes Congress to "secur[e] for limited [t]imes to [a]uthors ... the exclusive [r]ight to their respective [w]ritings." U.S. Const. art. I, § 8, cl. 8. Under this authority, Congress enacted the Copyright Act to protect "original works of authorship." 17 U.S.C. § 102(a). The term "original" indicates "that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." Feist , 499 U.S. at 345, 111 S.Ct. 1282 (citing 1 M. Nimmer & D. Nimmer, Copyright §§ 2.01[A], [B] (1990) ). Originality is thus not an exacting standard, since it requires only minimal creativity. "[I]t does not require that facts be presented in an innovative or surprising way." Id. at 362, 111 S.Ct. 1282.

Facts are not copyrightable, because they lack any degree of creativity. This is so whether facts stand alone or as part of a compilation. Id. at 350, 111 S.Ct. 1282 ; see also 17 U.S.C. §§ 101 – 03. Facts exist and are not created. Thus, there is a distinction between creating a work and discovering a fact. As the Supreme Court put it in Feist , "[t]he first person to find and report a particular fact has not created the fact; he or she has merely discovered its existence." 499 U.S. at 347, 111 S.Ct. 1282.

Even though facts themselves are not copyrightable, the Copyright Act recognizes that collections or compilations of facts may possess the originality necessary for copyright protection. 17 U.S.C. §§ 101 – 03 ; see also Feist , 499 U.S. at 348, 111 S.Ct. 1282. A "compilation" is defined under the Copyright Act as "[1] a work formed by the collection and assembling of preexisting materials or of data [2] that are selected, coordinated, or arranged in such a way that [3] the resulting work as a whole constitutes an original work of authorship." 17 U.S.C. § 101 ; see also Feist , 499 U.S. at 357, 111 S.Ct. 1282. The Copyright Act makes clear, however, that when a collection of facts is copyrightable, the underlying facts themselves are not protected. Copyright protection "extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material." 17 U.S.C. § 103(b). The Supreme Court stated this principle in Feist as follows:...

To continue reading

Request your trial
14 cases
  • Google LLC v. Oracle Am., Inc.
    • United States
    • United States Supreme Court
    • April 5, 2021
    ...111 S.Ct. 1282 (noting that "the copyright in a factual compilation is thin"); see also Experian Information Solutions, Inc. v. Nationwide Marketing Servs. Inc. , 893 F.3d 1176, 1186 (C.A.9 2018) ("In the context of factual compilations, ... there can be no infringement unless the works are......
  • CDK Global LLC v. Brnovich
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • October 25, 2021
    ...Inc. v. Rural Tel. Serv. Co. , 499 U.S. 340, 344–45, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) ; Experian Info. Sols., Inc. v. Nationwide Mktg. Servs., Inc. , 893 F.3d 1176, 1181–86 (9th Cir. 2018). To be sure, an arrangement of facts can enjoy copyright protection, but only if the arrangement......
  • Platt v. Moore
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • October 4, 2021
    ...by the record" and raised in the district court even in the absence of any cross-appeal, Experian Info. Sols., Inc. v. Nationwide Mktg. Servs. Inc. , 893 F.3d 1176, 1187 (9th Cir. 2018) ; see Whittaker Corp. v. Execuair Corp. , 953 F.2d 510, 515 (9th Cir. 1992), we are not affirming the rel......
  • Atari Interactive, Inc. v. Redbubble, Inc.
    • United States
    • U.S. District Court — Northern District of California
    • January 28, 2021
    ...be "strikingly similar." Id. Demonstrating such similarity requires a side-by-side comparison. Experian Info. Sols., Inc. v. Nationwide Mktg. Servs. Inc. , 893 F.3d 1176, 1186 (9th Cir. 2018). Here, Atari has introduced copyright registrations for Atari's Greatest Hit games. ECF Nos. 64-9, ......
  • Request a trial to view additional results
1 books & journal articles
  • COPYRIGHT AND THE CREATIVE PROCESS.
    • United States
    • Notre Dame Law Review Vol. 97 No. 1, November 2021
    • November 1, 2021
    ...PATRY, PATRY ON COPYRIGHT [section] 3:39 (2021), Westlaw PATRYCOPY; compare Experian Info. Sols., Inc. v. Nationwide Mktg. Servs. Inc., 893 F.3d 1176, 1185 (9th Cir. 2018) (holding compilation of names and addresses in commercial database sufficiently creative because "Experian's employees ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT