F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

E X P E R I A N I N F O R M A T I O N S O L U T I O N S , I N C ., Plaintiff-Appellant
,

v

.

N A T I O N W

I D E M A R

K E T I N G S E R V I C E S I N C O R P O R A T E D , Defendant-Appellee. N o. 16-16987

D.C. No. 2:13-cv-00618- SPL

OPI NI ON

A ppeal from the United States District Court for the District of Ariz o na Steven Paul L og an, District J udg e, Presiding

Arg u ed and Submitted December 6, 2017 San F rancisco, California

F iled J une 27, 2018

B efore: Mary

M. Schroeder and W illiam A. F letcher, Circuit J udg es, and Sara L ee Ellis, * District J udg e

.

Opinion by

J udg e Schroeder

* T h e Ho n o rab le Sara L ee Ellis, Un ited States District J u d g e f o r th e No rth ern District o f

Illin ois, sittin g b y

d esig n atio n

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SUMMARY * *

Copyright

The panel affirmed in part and reversed in part the district court’s summary judg ment in favor of the defendant in a copy rig ht case.

Plaintiff Ex perian I nformation Sy stems, I nc., compiled the ConsumerView Database, which contains more than 250 million r ec o r d s , each pertaining to an individual consumer. The d a tabase includes compiled pairing s of names a nd addresses.

Affirming in part, the panel held that the n a m e a nd address pairing s were c opy rig htable a s compilations but were entitle d o n l y to limited protection under the copy rig ht laws. The p anel h eld that Ex perian failed to show that its copy rig ht

was infring ed because it did not establish a b o d ily appropriation of its work.

Reversing the d istrict court’s g rant of summary judg ment

on a state law trade secret claim, the panel held that, if proper safeg uards were maintained, then Ex peria n ’ s l ists could be protected a s trade secrets under Ariz ona law. The panel concluded that there were triable issu e s o f f a ct a s to the defendant’s knowledg e of misappropriation. The panel remanded for further proceeding s on the trade secret claim.

** T h is su m m ary co n stitu

t es n o p art o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.E X P E R I A N I N F O

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COUNSEL

Robert Unikel (arg

ued), Arnold & Porter Kay e Scholer L L P, Chicag o, I llinois; Max Gavron, Oscar Ramallo, and Rhonda R. Trotter, Arnold & Porter Kay e Scholer L L P, L os Ang eles, California; for Plaintiff-Appellant.

Mark A. F uller (arg

ued) and Christopher W

. Tho m pson, Gallag her & Kennedy P.A., Phoenix
, Ariz ona, for D efendantAppellee.

Marcella B allard, Venable L L P, New York, New Y ork; Emilio W

. Cividanes, V enable L L P, W ashing ton, D.C.; for Amicus C u riae The Direct Marketing Association I n c., D/B /A The Data & Marketing Association.

OP INION

SCHROEDER, Circuit J udg e:
The novel federal question in this appeal is whether lists of names with addresses a r e copy rig htable when they are the product of a sophisticated process to ensure accur a c y a nd utility

. I n other words
, whether such lists are more like a telephone book, that the Supreme Court has held lack s any creative spark, or more like J oy ce’s Uly sses that chang ed the

c o u r s e o f 20th century literature. The answer, it turns ou t , lies somewhere in between, but close r to a telephone book. The n ame and address pairing s are o nly entitled to limited protection under the copy rig ht laws. I f p roper safeg uards a re maintained, the lists may also b e protected as trade secrets. W e hold in this case that the Plaintiff, Ex perian I n formation S o l utions, I nc., (“Ex perian”), established that its lists we r eE X P E R I A N I N F O

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copy rig htable but failed to establish that its copy r ig ht h ad been infring ed. W e t herefore affirm the D istrict Court’s summary judg ment in favor of the Defendant, N ationwide Marketing Services, I nc., (“Natimark”), on the cop y rig ht i n fring ement claim, but reverse the state law trade s e c re t claim and remand it for further proceeding s.

F actual and P rocedural Background

Ex perian is in the business of compili n g d atabases a nd licensing portions of them to companies for use in their marketing campaig ns. Since 199 8
, i t has compiled what is

n o w known as the ConsumerView Database (“CVD”) t h at has a copy

rig ht r eg istration for the “selectio n , coordination, arrang ement and co m p i l ation of data

. . . .” The CVD contains more than 250 million records, each pertaining to an individual consumer, and includes hundreds of “fields,” e ach d e noting a particular attribute of the c onsumer, such as ag e , earning s, or purchase habits, as well as behavior predictions. This litig ation concerns c ompiled pairing s of n a m es a nd addresses. These r e present o ne o f the most lucrative compon ents of the CVD, because mail marketers pay substantial amounts for licens e s t o utiliz e Ex perian’s name
a n d a ddress pairing s. The value, according to Ex peria n , results from the process by w hich E x perian d e t e r m ines the accuracy of its pairing s and the u tility of the selection of the pairing s it includes in the CVD for its marketing clients.

Ex perian o btains its name and address data from a variety of sources, such as catalog u e p urchase data, cable company records, r eal estate deeds, and warranty cards sig ned b y
consumers at r etail stor e s

. F or its d atabase, Ex perian picks f r om roug hly 2,200 public and p roprietary sources th a t i t believes have reliable, value-adding data. I n d eterminingE X P E R I A N I N F O

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whether to include a new source in its database, Ex perian

r u ns the source throug h tests to measure the potential n e w data’s q uality a nd to identify the differences b etween the new source’s data and ex is ting d ata in the CVD. Ex perian’s employ e es review the test results and do not a dd any d a ta to the CVD until they a

pp rove the source. Even if a source is validated, however, not all name and address data are added to the CVD. Ex perian ex cludes n ame and address pairing s it believes are not valuable to its c lients. Ex cluded are business addresses and addresses of individuals in prison and the very elderly

.

Ex per ian a lso r esolves conflicts between data sources. Such conflic ts are resolved utiliz ing thousands o f “ business rules” or alg orithms to analy z e da t a from e ach source a nd determine which name and address pairing should be included in the CVD. The data must be kept current, and the business rules are reg u larly updated on the b a s i s of client feedback. E x perian estimates that it ex pe n d s more than $10 million annually

to compile and update the CVD.

Ex perian is not alone in the d atabase compiling industry

. There are at least four other major c o m p ilers. Their respective methodolog ies al s o y i eld lists, but according to Ex perian, the lists have material differences in content.

Defendant Natimark is a smaller and more recent addition to the c onsumer database compilation industry . I t is located in Phoenix
, Ariz ona. I n 2011 it acquired a data b a s e , the National Consumer L ist (“NCL ”) in order to r esell the data. The N CL h as data f

or approx imately 200 million consumers.

The seeds o f this litig ation were sown in April 2 012 when

a data broker acting on behalf o f N a t i mark attempted to sellE X P E R I A N I N F O

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Ex perian a data c ompilation of children’s birthday s, coupled with the name and address p airing s of their parents. W h e n Ex perian tested the name and address pairing s in the sample the data broker provided, and compared them with Ex perian’s

own CVD pairing s, Ex perian found a match rate o f more than 97%, leading it to suspec t t h a t the data h a d been stolen. Ex perian’s ex pert later c o mpared Natimark’s p a iring s with Ex perian’s and found simila r m a tch rates of approx imately 94%. Als o s u g g esting stolen data was the price Natimark paid for the data which, according to Ex perian, was unusually low a nd unaccompanied by a customary written a g r e ement with industry -standard restrictions on maintenance and use.

After confronting Natimark with its conclusion that the data had been copied, Ex perian fil e d t h i s action in March 2013 in the U.S. District Court for the District of A riz o na claiming copy

rig ht infring ement. W h e n t he District Court

r u l e d that the alleg edly -infring ed pairing s were not copy rig htable, Ex perian added a claim f or trade s ec ret misappropriation, and arg ued that the p a i r i n g s were trade secrets that had been stolen. The Distr i c t C ourt g ranted summary judg ment for Natimark, holding that Ex p e ri an did not have a valid copy

rig ht or trade secret in its compilation o f

names and addresses. The court held that the compilation o f pairing s lac k ed sufficient creativity or orig inality to merit copy r i gh t p rotection. I t similarly held that the pairing s o f

names and addresse s could not constitute trade secrets and,

even if they could, E x perian h a d n o t established a triable issue with respect to its claim that Natimark kn ew o r h ad reason to know that the pairing s were either secret or stolen.

E x p erian filed a timely appeal with respect to both t h e copy rig ht and trade secret claims.E X P E R I A N I N F O

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Discussion

I. Copyright infringement claim

A. Copyrightability of the pairings as compilations

The boundaries of copy

rig h t protection are by now wellsettled. Fa cts are not copy rig h table and orig inal works are. See Feist Publ’ns, Inc. v

. Rural Tel. S erv., Co.
, 499 U.S. 340, 344–45 (1991) (

Feist ). I n b etween, however, are to be f ound

a variety of works, including lists, compilations, directories, and g uides that include facts, but demonstrate vary i n g deg rees of creativity in their s e lection, arrang ement, o r coordination. This case is about the area in between.

Our Constitution provides the b asis for copy rig ht p rotection, and authoriz e s Cong ress to “secur[ e] for limi t e d [ t] imes to [ a] uthors

. . . the ex clus i v e [ r] ig ht to their respective [ w] riting s.” U.S. Const. art. I
, § 8, cl. 8. Under this authority
, Cong ress enacted the Copy rig ht Act to protect “orig inal works of authorship.” 17 U.S. C

. § 1 0 2(a). The term “orig inal” indicates “ that the work was independently created by the a

uthor (a s o pposed to copied f rom other works), and that it possesses at least some minimal d eg ree o f creativity .” Feist
, 499 U.S. at 345 (citing 1 M. Nimmer & D

. Nimmer, Copy

rig ht §§ 2.01[ A]
, [ B ] ( 1990)). O rig inality is thus not an ex acting 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.

F acts are n ot copy

rig htable, because they lack any deg r ee of creativity

. T his is so w hether facts stand alone or a s part of a compilation. I

d. at 350; see al

s o 1 7 U

. S

. C. §§ 101–03. F acts ex ist and a

re not created. T hus, there is a d i s t i n c tionE X P E R I A N I N F O

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between c r e a t i n g a work and d iscovering a fact. As the Supreme Court put it in Feist
, “[ t] he first person to find a nd report a particular fact has not created the fact; he or she has merely discovered its ex istence.” 499 U.S. at 347.

Even thoug h facts themselves are n o t copy rig htable, the Copy rig ht Act recog niz es that c o llections or compilations o f facts may possess the orig inality necessary for copy rig ht protection. 1 7 U.S.C. §§ 1 0 1–03; see also Feist
, 499 U.S. at 348. A “ compilation” is defined under the Copy rig ht Act as “[ 1] a work formed by the collection and asse m b l i n g o f preex is t i ng materials or of data [ 2] that a re selected, coordinated, o r arrang e d in such a w a y t h at [ 3 ] the resulting work a s a whole constitutes a n orig inal work of authorship.” 17 U.S.C. § 101; se e also Feist
, 4 99 U.S. at 357. The Copy rig ht Act makes clear, however, that when a collection of facts is c opy

rig htable, the underly ing facts themselves a re not protected. Copy

rig ht protection “ex tends only to the material contributed by t h e author of such w ork, a s disting uished from the preex isting material employ ed in the work, and does not imply any ex clusive rig h t in t he preex isting material.” 17 U.S.C. § 1 03(b). The S u p r eme Court stated this principle in Feist as f ollows: “[ C] hoices a s to selection and arrang ement , s o long as they are made independently by the compiler and entail a minimal deg r ee o f creativity
, are sufficiently orig inal that Cong r ess may protect such compilations t h r oug h the copy rig h t laws.” 499 U.S. at 348 (citations omitted).

The Supreme Court authoritatively set the boundaries in Feist when it held that a telephone book fell b e l o w the creative limit. Id. at 3 6 2

. The Court held that a telephone company ’s alphabetical li s t of the n ames, addresses, a nd telephone numbers of its subscribers in a directory was notE X P E R I A N I N F O

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copy rig htable. Id. at 361–62. There was no creativity in the selection or arrang e ment of the listing s, because the telephone company ’s subscr i b e r s were p ersons desiring telephone service in the company ’s service area. I d. at 362. W hen the subscribers filled out a n a p p lication, the company issued them a telephone number. Id. T h e company therefore did not select its subscribers or the data listed in its telephone book. Id. I n p r eparing the directory
, the compa ny simply took the data that its subscribers provided to it and li sted the subscribers alphabetically by surname. Id.

The Supreme Court in Feist went on to recog niz e that a little creativity in the selection or arrang ement of facts would make a b ig d ifference. The compi l a t i o n of facts could be copy rig htable if the co m p any “selected, coordinated, o r arrang ed these uncopy

rig htable facts in an orig inal way

. ” Id. The company ’s mere replication of the names, addresses, a nd telephone numbers that each subscribe r provided was not enoug h. I t lacked “the modicum of crea t i vity necessary to transform mere selection into copy rig htable ex pression.” Id. The arrang ement of names did not help, because the company did “nothing more than list [ its] s ubscribers in a lphabetical order,” w h i c h is an “ag e -old practice, firmly rooted in tradition and so commonplace that it has come to be ex pected as a matter of course.” Id. at 363.

The Court also recog niz e d t h at hard work is not necessarily creative, and so the investment of time and effort in a project does not necessarily make it copy rig htable. Feist rejected the “sweat of the b row” or “industrious col l e c tion” doctrine, which the Court d e s c r i bed as the notion that the Copy rig ht Act should “hand[ ] out proprietary intere sts in facts” simply because some authors spend considerable time and effort compiling fac t s i n their works. Id. at 352–60.E X P E R I A N I N F O

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I nstead, the Supreme Court he l d that whether a f actual compilation is an orig inal work depends upon “the manner in which the collected facts h ave been selected, coordinated, a nd arrang ed.” Id. at 358. The selection or arrang ement n eed not be novel; rather, the sel ec t i o n or a rrang ement need only be made independently and “display some minima l level o f creativity .” Id.

After Fe ist , there has been a considerable amount o f federal litig ation concerning when c ompilations o f facts a re copy rig htable. Such litig ation, not surprising ly
, has served to il lustrate that not a g reat deal o f creativity in selection o r arrang ement is r equired. W e bri efly review the principal circuit court decisions.

Our Court has decided two sig n i f i cant cases since Feist

. I n CDN I nc. v. Kapes
, 197 F .3d 1256, 1 2 57, 1262 (9th Cir. 1999), we held that published lists of wholes a le prices for collectible coins contained sufficient orig inality to s u s t ain copy rig ht protection. T h is was because the prices were not facts, but were estimates based on empirical research. They

were “wholly t he product of [ CDN’s] creativity .” CDN
, 197 F .3d at 1260. They

were therefore “not mere listing s of actual p rices paid; rather, they [ were] CDN’s best estimate o f the fair v a l u e o f [ each] coin.” Id. F o r that reason, the lists were copy

rig htable.

More recently
, we deci d ed Bikram’s Y oga College of India, L.P. v. Evolation Y oga, LLC
, 803 F .3d 1032 (9th Cir. 2015) ( Bikram ’ s Y o ga )

. There, w e considered a book

con t a i n ing depictions of a sequence of y og a p o ses a nd breathing ex ercises. The sequence itself w as not copy rig htable, because it w a s a n idea or process u nder the Copy rig ht Act. Bikram’s Y

oga , 803 F .3d at 1042, 1044; seeE X P E R I A N I N F O

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also 17 U.S.C. § 102(b) (“I n no case does co p y r i gh t protection for an orig inal work of authorship ex tend to any idea

. . . [ o r] process,

. . . reg a r dless of the form in which it is described, e x plained, illustrated, or embodied in s u ch work.”). The depiction of the sequence in the book, however,

was protected by c opy

rig h t , b e c ause the depiction w as the

ex p ression of the idea, i. e

. , the words and pictures that described the sequence. Bikram’s Y oga , 803 F .3d at 1038–39. The book was thus entitled to copy rig ht protection. Id.

Other circuit decisions have more directly c o n s i dered compilations of factual or other non-copy rig h table elements. The Second Circuit has a d dressed the copy rig htability o f compilations in two cases in which it found f a i r l y minimal creativity sufficient for protection. I n Key Publications, Inc.

v. Chinatown Today Publishing Enterp r i s es, Inc.
, 945 F .2d 509, 5 11 ( 2d Cir. 1991), the court co n sidered a directory intended for the New York City Chinese-Ameri c a n community

. The directory c onsisted of business names, address e s, and phone numbers, w hich were arrang ed into separate descriptive categ o ries. Ke y Publ’ns
, 945 F .2d at 512–13. The court h eld this w as a sufficiently creative factual compilation to warrant copy rig ht pr o tection. Id. Si m i l ar to Ex perian in this case, the compiler in Key Publications e x c l u d e d i n formation that she thoug ht would not be useful for her customers

. I d

. at 513. She ex cluded businesses that would not rem a in open long
, including “certain insurance b rokers, take-out r e staurants, a nd traditional Chinese medical practitioners.” Id. The court h eld that this process of ex clusion “ indicate[ d] tho u gh t a nd creativity in the select i o n o f businesses,” and that the work was copy rig htable. Id.E X P E R I A N I N F O

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I n Kregos v. A ssociated Press
, 937 F .2d 700, 702 (2d Cir. 1991), the Second Cir c u i t dealt with a form or chart that convey ed informat i o n about the past p erformances o f the opposing baseball pitchers scheduled to start e ach d a y ’s g ame. The f

orm w as protected because, similar to Ex perian’s compilation, there were n o other pitching forms that were identical or nearly identical to the plaintiff’s. K regos , 937 F

. 2d at 7 0 5

. Th e form included nine items o f information about each pitcher’s past performance
, grouped into three c ateg ories. Id. at 702. The protection w a s for the form itself, not for the daily factual statistics it contained. Id. The c o u r t a lso cautioned that any relief would be e x tremely limited because the plaintiff could prevail only ag ainst those who used f

o rms that ex actly copied his selection o f i nformation. Id. at 709–10. Nevertheless, the statis t i c al compilation was entitled to some protection.

The Second Circuit rea c h e d a different result when considering publications of judicial op i n ions. I n Matthew Bender & Co. v. W

est P ublishing Co.
, 158 F .3d 674, 677 (2d Cir. 1998), the court held that W est’s publications of judicial opinions did not merit copy rig ht protection. Althoug h W e st claimed it had demonstrated s u fficient creativity in several respects, including its a r rang ement of information abo u t parties, courts, and dat e s o f d ecisions and its addition o f certain information concerning counsel, the court concluded that W est’s selection a

nd arrang e ment were “obvious, ty pica l
, and lack[ e d ] even minimal c r eativity .” Matthew Bender & Co.
, 158 F .3d at 677. Creativity was lacking because industry conventions, such as those in the leg al profession, made the choices obvious. Such conventions, the court stat e d
, “so dictate selection that any person composing a c ompilation o f the ty pe at issue would necessarily select the same categ ories of information,” and that “creativity inheres in making non-E X P E R I A N I N F O

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obvious choices from a m o n g more than a few options.” Id

. at 677, 682. I n this case, Ex perian’s choices are not obvious,

as illustrated by Ex perian’s evidence that t h e c o ntent in its database d iffers material l y f rom the content in other compilations of consumer data.

C l oser to our case a

re two Eleventh Circuit d ecision s involving direct o ries. W

arren Publishing, Inc. v. M icrodos Data Corp.
, 115 F .3d 1509, 1511–12 ( 11th Cir. 1997) (en banc), invol v e d a compilation of information about cable sy stem operators. The information was p rinted in a directory that included “the n ame, addres s , a n d telephone number o f the cable sy stem operator, the n u mber of subscribers, the channels o ffered, the pr i c e of service, and the ty pes o f equipment used.” W

arr e n Publ’g
, 115 F .3d at 1 512. The compiler used whatever inf o rmation the cable companies provide d i n response to the compiler’s request for informatio n

. I

d. at 1519. The compilation was not copy rig htable under Feist b ecause there wa s n o selectivity ; unlike in this case, the compiler included the “entire relevant universe known to it” in the directory

. Id. at 1518, 1520.

I n BellSouth Advertising & P u blishing Corp. v. Donn e l l ey Information Pu b l ishing, Inc.
, 999 F

. 2d 1436, 1439, 1442 (11th Cir. 1993) ( e n banc) ( BellSouth ), the Eleventh Circuit similarly h eld that the plaintiff’s Miami y ellow pag e business directory was not sufficiently orig inal to merit copy rig ht protection because the contents involved no more creativity than the telephone book in Feist

. Unlike this c ase, the listed businesses in BellSouth chos e whether to be listed and the information to be included. 999 F .2d at 1441.

A F ifth Circuit case involved a process of data sele c t i on similar to the one in this case. The underly ing informationE X P E R I A N I N F O

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convey ed was factual, but the manner of selecting a nd d i s play ing the information involved o rig inality

. Mason v. Montgomery Data, I

nc. , 9 67 F .2d 135, 141–42 (5th Cir. 1992). I n Mason
, the plaintiff selected real estate ownership information and display e d it on maps. Id. at 136. The court held that this was sufficiently c reative in selection to warrant copy rig ht protection, because the compiler made “choices

. . . independently

. . . to select information from numerous a nd

so m e t i m e s c o nflicting sources,” including from factual public records, and combined that information to make “an effective pictorial ex p ression of those locations.” Id. at 136 n.3, 140, 141. The same is true here.

F rom this survey of circuit decisions since Feist
, we draw three g eneral principles. F irst, althoug h facts are not entitled to copy rig ht p r otection, factual compilations are entitled to

some protection as long a s there is creativity in the selection, arrang ement, or coordination of the facts. Feist , 499 U.S. at 358; W arren Publ’g
, 1 1 5 F .3d at 1515; M a s on , 967 F .2d at 141. Second, the creativity that suffices to e s tablish copy rig ht protection in factual compilations is minimal. Feist
, 4 99 U.S. at 348; Key Publ’ns
, 945 F .2d a t 512–13. F o r illustration, the compilation o f business names, a ddresses, and phone numbers of interest to the New York City ChineseAmerican communit y w as sufficiently creative to warrant copy r i ght protection of a directory in Key Publications

. 945 F .2 d a t 512–13; see a lso Kregos
, 937 F .2d at 701–02. Third, such compilations of factual information receive only limited prot e c t i o n

. 17 U .S.C. § 103(b); Feist
, 499 U .S. at 359; Kregos
, 937 F .2d at 702, 709. This means that a compiler may freely use the f acts contained in a compilation when preparing

a c ompeting work, a s long as the competing work d oes not e x hibit the same selection or arrang ement. See Feist
, 4 99 U.S. at 349; see also Kregos
, 937 F .2d at 7 02, 709.E X P E R I A N I N F O

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Apply ing these principles to this case leads t o t he conclusion that Ex p erian’s lists a re entitle d t o limited protection. Ex perian’s selection process in culling data from multiple sources and se l e c t i ng the a ppropriate p airing o f addresses w ith names bef o re e ntering them in the database involves a process of at least minimal creativity

. The listing s
are compiled by first collecting and c omparing multiple
sources, a nd then sorting conflicting information throug h the creation of b usiness rules that Ex perian c reated to select from among the conflicts. As the Fi ft h Circuit said in Mason
, selection is sufficiently creative when the com p i l e r makes “choices

. . . independently

. . . to sele c t i n f o r m ation from

numerous and sometimes c onflicting sources.” 967 F .2d at 141. Ex p erian’s p rocess more than meets that standard. Much like the compi lers in Mason and Key Publications
, Ex perian’s employ ees choose f r om multiple and sometimes conflicting sources, and they use their judg ment in selecting which names a

nd addresses to include in t h e d a tabase. See Mason , 967 F .2d at 141; Key Publ’ns , 945 F .2d at 512–13.

Ex perian’s employ e es, l i ke the compiler in Key Publications
, a lso ex clude inform a tion they deem irrelevant to the interests of Ex perian’s marketing clients, information such as business addresses, and th e n a m es and addresses o f the very elderly and incarcerated. See 945 F .2d at 513. Such

ex c lusions indicate so m e “ thoug ht and c reativity in the selection” of names and addresses to include in the database, id

. , which indicates the “modicum of creativity necessary to transform mere selection into copy rig htable ex pression.” Feist
, 499 U.S. at 3 62. The name and address pai r ing s in Ex perian’s database are a lso materially differe n t from those in other databases. W ith respect to the baseball pitching form in Kregos
, the Second Cir c u it observed that “[ t] here is no prior f orm that is identical

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in only a trivial deg ree.” 9 3 7 F. 2d at 7 0 5. The same observation can be made here.

Natimark asserts that Ex perian’s selectivity canno t b e creative, because it is n o m o r e than a leng thy process to discover f

a c ts, which are not copy rig htable. Natimark attempts to match Ex perian’s process to the Supreme Court’s discussion in F

eist of “industrious c ollection,” i.e., the hard work that a compiler ex erts i n ga thering facts that lacks creativity t o w arrant copy rig ht protection. 4 99 U.S. at 352–53.

E x p erian’s methods, however, do not entail simple replication of the d ata that Ex perian receiv es, a s was the situation in Feist

. 499 U.S. at 362; see also W arren Publ’g
, 115 F .3d at 1517–20; BellSouth
, 999 F .2d at 1441. I n all those cases, the directory compilers w ere simply fed the data. See Feist
, 499 U.S. at 362 (“I n preparing its w hite pag es, [ the telephone company ] simply t[ ook] the data provided by its subscribers and list[ ed] it alphabetica l ly by surname.”); W arren Publ’g , 115 F .3d at 1 519–20 (holding that directory of cable operator information w as not c opy rig htable when the selection was not the compiler’s “own, but rather that of the cable operator s ” ) ; BellSouth
, 999 F .2d at 1438, 1441 (involving a y ellow pag es directo r y containing information entirely pro v i d ed by others). Ex perian does not include the “entire relevant universe k nown to it,” as in W

a r ren Pu blishing

. 115 F .3d a t 1518. Rather, Ex perian’s selection process produces different, a n d at least according to Ex perian,

more reliable data than the other four lar g est database compilers in the United States.

On the basis of o ur review of the d ecisions in this a nd other circuits, we must c o n clude that the name and addressE X P E R I A N I N F O

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pairing s in this case are copy rig h table as compilations under post- Feist standards.

That does not end the c opy rig ht claim inquiry
, however. To establish copy

rig ht infring e ment, the plaintiff must prove not only ownership of a v a lid copy rig ht, but copy ing b y the alleg ed infring er of constituent elements of the pr o t e cted work. Feist
, 499 U.S. at 361; Unicolors, Inc. v. U rban Outfitter s , I n c

. , 853 F .3d 980, 984 (9th Cir. 2017). W e therefore must c onsider whether Ex perian has shown t h at Natimark infring ed, i.e., copied the material. Althoug h this issu e w as not reached by the District Court as it found the material was not c o py

rig htable, we may affirm the District Court o n any g round supp o r t e d by the record. See, e.g. , Cosmetic Ideas, Inc. v. IAC/Interactivecorp
, 6 06 F .3d 612, 615 (9th Cir. 2010) (citation omitted).

B. W hether Experian established infringement

Even thoug h the factua l compilation at issue here is entitled to some protection, “the scope of pr o t e c t ion in factbased works” is severely limited. Feist
, 499 U.S. at 350; see also BellSouth
, 999 F .2d a t 14 4 5

. T he f acts themselves can be copied at will. As the Supreme Court said in Feist
, “This result is ne i t h er unfair nor unfortunate. I t is the means b y which c opy

rig ht advances the prog ress of science.” 499 U.S. at 350. T h e Six th Circuit said it well, “Given that the copy rig ht protection of a fact u a l c ompilation is ‘thin,’ a competitor’s t a k i n g the b ulk o f the f actual material f

rom a preex isting compilation w ithout infring ement of the author’s copy rig ht is n ot surprising .” BellSouth
, 999 F .2d at 1445 (quoting Feist
, 499 U.S. at 349).E X P E R I A N I N F O

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F or this reason, we have repe a tedly recog niz ed in this circuit that when dealing with f a c tual compilations, infring ement cannot b e based on a showing that only a p art o f th e w o r k h as been copied. I n the contex t of f actual compilations, w e have held that infring ement should n o t be found in the absence of “bodily appropriation of ex pression,”

or “unauthoriz ed use of substantially the entire item.” H arper House, Inc. v

. Thomas Nelson, Inc.
, 889 F .2d 197, 2 0 5 (9th Cir. 1 9 8 9) ( citations omitted). As we said in A p ple Computer, Inc. v. M

icrosoft Corp.
, 3 5 F .3d 1435, 1446 (9th Cir. 1994), “Under Harper H ouse

. . . there can be no in f r ing ement unless the works are virtually identical.” I t is not enoug h to compare the alleg edly infring in g compilation with only a portion of the copy

rig hted work.

The bodily appropriation principle is consistent with our

more g eneral rule that to establish that a work has been copied, the two works must be compare d side-by -side. See Antonick v. Elec. Arts, Inc.
, 841 F .3d 106 2
, 1 0 66 (9th Cir. 2016); Seiler v. Lucasfilm, Ltd.
, 808 F .2d 1316, 1319 (9th Cir. 1986). I n Antonick
, neither the c o p y righ t e d w ork nor the alleg ed infring ing work was introduced into evidence, so no side-by

- side comparison was possible. 841 F .3d at 1066. W e held that the plaintiff had not established infring ement. This

was because, with o u t such a comparison, it could not be determined whether the two w orks were substantially similar. Id. I n Seiler
, we reached a similar result, say ing that the pl a i n tiff could not show infring ement because “[ t] here [ could] be no proof of

. . . c opy rig ht infring ement unless [ the plaintiff ’ s] works [ were] jux taposed w ith [ the defendant’s] and their contents compared.” 808 F

. 3d at 1319.

I n this case, the Ex perian database t h a t w a s alleg edly infring ed was one updated throug h September 2011. NeitherE X P E R I A N I N F O

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t h at entire database nor Natimark’s entire, alleg ed l y infringi ng database was introduced into evidence, a nd p e r haps as a practical matter could not have be en

. Nevertheless, there must be sufficient evidence of content to make a fair comparison. See Data E. USA, Inc. v. Epyx, Inc.
, 862 F .2d 204, 207 (9th Cir. 1988).

Ex perian contends that it has established a triable issue a s to c o py ing by offering the o pinion of an ex pert that the match rate between E x perian files and the alleg edly infring ing Natimark files is hig h er than the match rate between the f iles of E x perian and o ne of its leg itimate licensees. Ex perian a sks

u s t o h old that it has presented circumstantial evidence o f copy ing sufficient to se n d the case to a jury

. I t fails to c ite any authority from thi s c ircuit or elsewhere permitting infring ement to be established on the basis of circumstantial evidence, and in the absence of any direct comparisons.

W e need n ot reach this issue, h owever, as we may affirm the District Court on a

n y g round supported by the record. See Cosmetic I

deas
, 606 F .3d a t 615 (cita t ion omitted). I t is undisputed that Natimark’s database was materially smaller than Ex perian’s. W hile Ex peri an’s database at the relevant time included approx im a

t e l y 2 5 0 m i l l i o n p a i r i n g s, Natimark’s da t a b a s e contained name a n d address pairing s for only 200 million consumers. Even assuming Natimark’s pairing s
were e x act copies of their c o u n terparts in the Ex perian database, the match rate would only be 80% and insufficient to establish a bodily

appropriation of Ex perian’s work.

Decisions of o u r sister circuits bear this out. F or ex ample, the Eig hth Circuit found that a ratio of 74% of the same items in both the copy

rig hted w o r k and the infring ing work was insufficient to establish infring e ment of a factual compilationE X P E R I A N I N F O

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under Feist

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ee Sc h o o l h o use, Inc. v. Anderson
, 275 F .3d 726, 729–30 (8th Cir. 2002). Similarly
, the Six th Circuit h eld t h a t a match rate of 61% o f the same items found in bot h a copy rig hted and an infring in g w o rk was also insufficient to establish infring ement. See Ross, B rovins & Oehmke, P.C. v

. Lexis Nexis Grp.
, 463 F .3d 478, 4 83 (6th Cir. 2006). The court said that a 61% match rate be t w een the two compilations could “hardly b e con s idered the ‘ same’ selection.” Id. (citatio n o m i t t ed). I f we are to afford “thin” protection to Ex perian’s factual compilation, as the Supreme Court has directed under Feist
, 499 U.S. at 3 49, we must find substantial verbatim c opy ing in t h e infring ing work. See Apple Comput.
, 35 F .3 d a t 1 446; Key Publ’ns
, 945 F .2d at 514. An 80% match r ate between two compilations of names and a ddresses in databases is insuffi c i ent to establish bodily appropriation.

B e cause Ex perian has not introduced the v e r sion of its database that it claimed was copied, it cannot establish infring ement. Even if Ex p erian c ould establish a triable issue

as to copy ing by c omparing later versions of its database with the alleg ed infring ing database, however, the un d isputed evidenc e shows that Ex perian could not establish bodily appropriation of ex pression. I t can at best show a match rate of 80%. Ex perian therefore canno t e stablish infring ement. F or that r e ason, we must affirm the District Court’s g rant of summary judg ment to Natimark on the copy rig ht claim.

II. Trade secret claim

The District Court g ranted Natimark summary judg ment

on the state law trade secret claim as well, holdin g that Ex perian did not h a v e a v alid trade secret in its compilation of names and addresses because the names a nd a d d r essesE X P E R I A N I N F O

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were public k

n owledge and Ex perian did not ex plain how it derived economic v alue from its compilation. The court also held that even if there were a valid trade secret, there were no triable issues of fact a s to whether Natimark knew or h ad

reason to know that the data were e ither secret or stolen when Natimark acquired the data.

Ariz ona has adopted the Uniform Trade Secr et Act, which defines a trade secret as information that “[ d ] erives independ ent economic value” from n o t being k nown o r readily a scertainable b y the p laintiff’s competitors and is the subject of r easonable e f

forts to maintain secr e cy

. A .R.S. § 44-401(4). A trade secret does not consist of “matters o f public knowledg e. ” Calisi v. Unified Fin. S ervs., LLC
, 302 P.3d 628, 631 ( Ariz

. Ct. App. 2013) ( citing E n ter. Leasing Co. v. Ehmke
, 3 P.3 d 1 0 6 4
, 1069 (Ariz

. Ct. App. 1999)). T he subject matter of trade s e c r e t s “must be sufficient l y novel, unique, or orig inal that it is not readily ascertainable to competitors.” Id. ( c iting Ehm k e , 3 P.3d at 1069). Ariz ona courts h ave considered c u s tomer lists a nd have held that a trade secret cannot ordinarily consist o f matters of pub l i c k n o wledg e. See id. at 632 (“[ T] o be protected as [ a] trade sec r et, [a] customer list must be more than a listing of firms or individuals w hich could be compiled f r o m directories or o ther g enerally a vailable sources.”) ( c i t a t i o n s a n d i n t e r n a l q u o t a t i o n m a r k s o m i t t e d )

. Nonetheless, if a business spends considerable effort a nd resources in developing its trade secret, the trade secret may be protected. Id. (citations omitted).

Alt h o ug h the subject matter o f Ex perian’s compilation may be g athered from g enerally available sources that a re matters of public knowledg e, Ex p erian spends a considerable

a mount of money and effort in developing the compilat i o n ,E X P E R I A N I N F O

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and its compilation may therefore b e protected under A riz o na law. See id. Ex perian h as at least shown triable issues that its database has econom i c v al ue as a secret not readily ascertainable by its competitors, and that its database differs

m a terially from other major compilers. See A.R.S. § 4 4

- 401(4). A ccording to Ex p e r ian, the name and address information is the most important of the data fields and is the foundation of its database because of the data’s reliability a nd

ac c u r a cy

. And Ex p erian asserts that it receives its business due to the hig h accuracy o f its n ame and address pairing s. A s the Ariz ona Court of A ppeals has recog niz ed, “[ v] alue will be infe r r e d if the owner can show that the information confers

u pon it an economic advantag e over others in the industry

. ” Ehmke
, 3 P.3d at 1070 ( citation o mitted). Ex perian contends it maintains the secrecy of its database as well. Even thoug h it licenses the use of the database to other s , i t e n t ers strict security a g reements with licensees to maintain the database’s secrecy

. Ex perian has made a prima faci e s h o w ing that its compilation of name and address pairing s is a trade secret.

Under Ariz o na law, misappropriation means either acquisition or u se of a trade secret with knowledg e o f misappropriation. Misappropriation is defined as either:

(a) Acquisition of a trade secret of another b y
a p erson who knows or has reason to know that the trade secret was acquired by improper means [ OR]

(b) Disclosure or use o f a trade secret o f another without ex p ress o r implied consent b y a person who either:E X P E R I A N I N F O

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(i) U sed improper means to a c q uire knowledg e of the trade secret.

( i i ) A t the time of disclosure o r use, knew o r had reason to know that h is knowledg e of the trade secret was derived from or t h r o ug h a person who had u tiliz ed improper m e ans to acquire it, w as acquired under cir cumstances g iving rise to a duty to maintain its secrecy o r limit its use o r was derived from or throug h a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use.

(iii) B efore a material chang e of his position, knew or had reason to know that it was a trade

se c ret and that knowledg e of it had been acquired by a ccident or mistake.

A.R.S

. § 44-401(2).

Ex perian asserts that the D istrict Court e r red in holding that there were no triable issues of fact as to whether Natimark knew or had reason to know w hen it a cquire d the d a t a that the data were obtained throug h improper mean s

. Ex perian also a

rg ues that the District Court erred in focusing solely on Natimark’s knowledg e with respec t t o its

a c q u i sition of a trade secret, a s opposed to use, in g r anti n g Natimark summary

judg ment.

The evidence of Natimark’s k n o wl e d g e in this case is suf ficient to survive summary judg ment. Ex perian has established triable issues of fact a s to whether Natimark knew

or had reason to know that it acquired and used a trade secret that was obtained throug h improper means. S e e id. I nE X P E R I A N I N F O

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JustMed

, Inc. v. Byce
, 6 00 F .3d 1118, 1129–30 (9th Cir. 2 010), we considered a similar provision of I d aho law, a n d recog niz ed that improper acquisition a nd improp e r use o f protected works are independent bases for trade secret liability

. Here, evidence of the low price that Natimark paid f or the data g o e s to w hether Natimark had constructive knowledg e that the d a t a it obtained were acquired throug h improper

means. According to Ex perian, Natimark paid less than 1% of the market rate for a one-time license to ob tain actual ownership of data, and this w ould indicate kno wl edg e. See Syntex Ophthalmics, I

n c. v. Novicky
, No. 80 C 6257, 1982 W L 63797, a t * 2
, *11 (N.D. I ll. May 6, 1982) (holding $20,000 pay

ment for t e c h n olog y that cost $1 million to de v e l o p d e m o n s t

r a t ed constructive knowledg e for trade secret claim). Natimark’s obtaining ownership o f data throug h an invoice, which Ex p erian arg u es is unusual in the industry
, a s opposed to obtaining limited use rig h ts in the data throug h a written ag reement, is further evidence of constructive knowledg e. Ex perian a lso submitted evidence of Natimark’s President’s prior ex perience that should have pu t h i m on notice of an improper acquisition. Ex perian therefore submitted su f

f icient evidence to withstand summary ju d gm e n t on the issue o f whether Natimark knew or h ad

reason to kn o w t h at it acquired and used a trade secret that

was obtained throug h improper means. See A.R.S. § 44- 401(2). T he District Court e r r e d in g ranting summary judg ment to Natimark on the trade secret claim.

Conclusion

The District Court co r re ctly g ranted Natimark summary judg ment o n Ex perian’s copy r i gh t c laim. Ex perian’s nameE X P E R I A N I N F O

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and address pairing s a

re f actual c ompilations entitled to only thin copy

rig h t p rotection. E x perian failed t o e s tablish infring ement. The District Court erred in g r anting Natimark summary judg ment on the trade secret claim, because there

are triable issues of fact as to Natimark’s knowledg e o f misappropriation. W e re v erse and r emand for f urther proceeding s on that claim.

AF F IR ME D in part and REVERSED in part a nd REMANDED.