Experian Information Solutions, Inc. v. Nationwide Marketing Services Incorporated

893 F.3d 1176 (9th Cir. 2018)

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Nature of the Case

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Facts

P is in the business of compiling databases and licensing portions of them to companies for use in their marketing campaigns. Its database contains more than 250 million records 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. P obtains its name and address data from a variety of sources, such as catalog purchase data, cable company records, real estate deeds, and warranty cards signed by consumers at retail stores. P picks from roughly 2,200 public and proprietary sources that it believes have reliable, value-adding data. P 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. P also resolves conflicts between data sources by using thousands of 'business rules' or algorithms to analyze data from each source and determine which name and address pairing should be included. The data must be kept current, and the business rules are regularly updated based on client feedback. P estimates that it expends more than $10 million annually to compile and update its database. There are at least four other major compilers. P claims their lists have material differences in content. D acquired a database, the National Consumer List (NCL) in order to resell the data. The NCL has data for approximately 200 million consumers. A data broker acting on behalf of D attempted to sell P a data compilation of children's birthdays, coupled with the name and address pairings of their parents. P tested the name and address pairings in the sample provided, and compared them with P's data pairings. It produced a match of more than 97%, leading P to suspect that the data had been stolen. P's expert found similar match rates of approximately 94%. The similarity and the price D paid for the data which was unaccompanied by a customary written agreement with industry-standard restrictions on maintenance and use suggested to P that D’s data was stolen from P. P filed this action claiming copyright infringement. The District Court ruled that the allegedly-infringed pairings were not copyrightable. P added a claim for trade secret misappropriation. The court granted summary judgment for D, holding that P did not have a valid copyright or trade secret in its compilation of names and addresses. The compilation of pairings lacked sufficient creativity or originality to merit copyright protection. It then held that the pairings of names and addresses could not constitute trade secrets and that P had not established a triable issue with respect to its claim that D knew or had reason to know that the pairings were either secret or stolen. P appealed.