and Submitted December 6, 2017 San Francisco, California
from the United States District Court for the District of
Arizona Steven Paul Logan, District Judge, Presiding D.C. No.
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.
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 &
Before: Mary M. Schroeder and William A. Fletcher, Circuit
Judges, and Sara Lee Ellis, [*] District Judge.
panel affirmed in part and reversed in part the district
court's summary judgment in favor of the defendant in a
Experian Information Systems, Inc., compiled the ConsumerView
Database, which contains more than 250 million records, each
pertaining to an individual consumer. The database includes
compiled pairings of names and addresses.
in part, the panel held that the name and address pairings
were copyrightable as compilations but were entitled only to
limited protection under the copyright laws. The panel held
that Experian failed to show that its copyright was infringed
because it did not establish a bodily appropriation of its
the district court's grant of summary judgment on a state
law trade secret claim, the panel held that, if proper
safeguards were maintained, then Experian's lists could
be protected as trade secrets under Arizona law. The panel
concluded that there were triable issues of fact as to the
defendant's knowledge of misappropriation. The panel
remanded for further proceedings on the trade secret claim.
SCHROEDER, Circuit Judge:
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.
and Procedural Background
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.
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.
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.
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.
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
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.
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 ...