Court Opinion

ID: 4288963
Source: CourtListenerOpinion
Date Created: 2018-06-27 18:20:41.09127+00
Date Added: 2024-06-11T14:37:49.541655
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 EXPERIAN INFORMATION                               No. 16-16987
 SOLUTIONS, INC.,
                  Plaintiff-Appellant,                D.C. No.
                                                   2:13-cv-00618-
                      v.                                SPL

 NATIONWIDE MARKETING SERVICES
 INCORPORATED,                                        OPINION
               Defendant-Appellee.

         Appeal from the United States District Court
                  for the District of Arizona
         Steven Paul Logan, District Judge, Presiding

           Argued and Submitted December 6, 2017
                  San Francisco, California

                        Filed June 27, 2018

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

                  Opinion by Judge Schroeder

    *
      The Honorable Sara Lee Ellis, United States District Judge for the
Northern District of Illinois, sitting by designation.
2 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

                            SUMMARY**

                              Copyright

   The panel affirmed in part and reversed in part the district
court’s summary judgment in favor of the defendant in a
copyright case.

    Plaintiff 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.

    Affirming 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 work.

    Reversing 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.

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 3

                         COUNSEL

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.

                         OPINION

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
4 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

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
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 5

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
6 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

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.
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 7

                         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 (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 (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.

    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; see also 17 U.S.C. §§ 101–03.
Facts exist and are not created. Thus, there is a distinction
8 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

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.

    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. 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. 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: “[C]hoices as
to selection and arrangement, so long as they are made
independently by the compiler and entail a minimal degree of
creativity, are sufficiently original that Congress may protect
such compilations through the copyright 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 below the
creative limit. Id. at 362. The Court held that a telephone
company’s alphabetical list of the names, addresses, and
telephone numbers of its subscribers in a directory was not
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 9

copyrightable. Id. at 361–62. There was no creativity in the
selection or arrangement of the listings, because the telephone
company’s subscribers were persons desiring telephone
service in the company’s service area. Id. at 362. When the
subscribers filled out an application, the company issued
them a telephone number. Id. The company therefore did not
select its subscribers or the data listed in its telephone book.
Id. In preparing the directory, the company simply took the
data that its subscribers provided to it and listed the
subscribers alphabetically by surname. Id.

     The Supreme Court in Feist went on to recognize that a
little creativity in the selection or arrangement of facts would
make a big difference. The compilation of facts could be
copyrightable if the company “selected, coordinated, or
arranged these uncopyrightable facts in an original way.” Id.
The company’s mere replication of the names, addresses, and
telephone numbers that each subscriber provided was not
enough. It lacked “the modicum of creativity necessary to
transform mere selection into copyrightable expression.” Id.
The arrangement of names did not help, because the company
did “nothing more than list [its] subscribers in alphabetical
order,” which is an “age-old practice, firmly rooted in
tradition and so commonplace that it has come to be expected
as a matter of course.” Id. at 363.

    The Court also recognized that hard work is not
necessarily creative, and so the investment of time and effort
in a project does not necessarily make it copyrightable. Feist
rejected the “sweat of the brow” or “industrious collection”
doctrine, which the Court described as the notion that the
Copyright Act should “hand[] out proprietary interests in
facts” simply because some authors spend considerable time
and effort compiling facts in their works. Id. at 352–60.
10 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

Instead, the Supreme Court held that whether a factual
compilation is an original work depends upon “the manner in
which the collected facts have been selected, coordinated, and
arranged.” Id. at 358. The selection or arrangement need not
be novel; rather, the selection or arrangement need only be
made independently and “display some minimal level of
creativity.” Id.

    After Feist, there has been a considerable amount of
federal litigation concerning when compilations of facts are
copyrightable. Such litigation, not surprisingly, has served to
illustrate that not a great deal of creativity in selection or
arrangement is required. We briefly review the principal
circuit court decisions.

    Our Court has decided two significant cases since Feist.
In CDN Inc. v. Kapes, 197 F.3d 1256, 1257, 1262 (9th Cir.
1999), we held that published lists of wholesale prices for
collectible coins contained sufficient originality to sustain
copyright protection. This was because the prices were not
facts, but were estimates based on empirical research. They
were “wholly the product of [CDN’s] creativity.” CDN,
197 F.3d at 1260. They were therefore “not mere listings of
actual prices paid; rather, they [were] CDN’s best estimate of
the fair value of [each] coin.” Id. For that reason, the lists
were copyrightable.

    More recently, we decided Bikram’s Yoga College of
India, L.P. v. Evolation Yoga, LLC, 803 F.3d 1032 (9th Cir.
2015) (Bikram’s Yoga). There, we considered a book
containing depictions of a sequence of yoga poses and
breathing exercises.      The sequence itself was not
copyrightable, because it was an idea or process under the
Copyright Act. Bikram’s Yoga, 803 F.3d at 1042, 1044; see
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 11

also 17 U.S.C. § 102(b) (“In no case does copyright
protection for an original work of authorship extend to any
idea . . . [or] process, . . . regardless of the form in which it is
described, explained, illustrated, or embodied in such
work.”). The depiction of the sequence in the book, however,
was protected by copyright, because the depiction was the
expression of the idea, i.e., the words and pictures that
described the sequence. Bikram’s Yoga, 803 F.3d at
1038–39. The book was thus entitled to copyright protection.
Id.

    Other circuit decisions have more directly considered
compilations of factual or other non-copyrightable elements.
The Second Circuit has addressed the copyrightability of
compilations in two cases in which it found fairly minimal
creativity sufficient for protection. In Key Publications, Inc.
v. Chinatown Today Publishing Enterprises, Inc., 945 F.2d
509, 511 (2d Cir. 1991), the court considered a directory
intended for the New York City Chinese-American
community. The directory consisted of business names,
addresses, and phone numbers, which were arranged into
separate descriptive categories. Key Publ’ns, 945 F.2d at
512–13. The court held this was a sufficiently creative
factual compilation to warrant copyright protection. Id.
Similar to Experian in this case, the compiler in Key
Publications excluded information that she thought would not
be useful for her customers. Id. at 513. She excluded
businesses that would not remain open long, including
“certain insurance brokers, take-out restaurants, and
traditional Chinese medical practitioners.” Id. The court held
that this process of exclusion “indicate[d] thought and
creativity in the selection of businesses,” and that the work
was copyrightable. Id.
12 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

    In Kregos v. Associated Press, 937 F.2d 700, 702 (2d Cir.
1991), the Second Circuit dealt with a form or chart that
conveyed information about the past performances of the
opposing baseball pitchers scheduled to start each day’s
game. The form was protected because, similar to Experian’s
compilation, there were no other pitching forms that were
identical or nearly identical to the plaintiff’s. Kregos,
937 F.2d at 705. The form included nine items of
information about each pitcher’s past performance, grouped
into three categories. Id. at 702. The protection was for the
form itself, not for the daily factual statistics it contained. Id.
The court also cautioned that any relief would be extremely
limited because the plaintiff could prevail only against those
who used forms that exactly copied his selection of
information. Id. at 709–10. Nevertheless, the statistical
compilation was entitled to some protection.

    The Second Circuit reached a different result when
considering publications of judicial opinions. In Matthew
Bender & Co. v. West Publishing Co., 158 F.3d 674, 677 (2d
Cir. 1998), the court held that West’s publications of judicial
opinions did not merit copyright protection. Although West
claimed it had demonstrated sufficient creativity in several
respects, including its arrangement of information about
parties, courts, and dates of decisions and its addition of
certain information concerning counsel, the court concluded
that West’s selection and arrangement were “obvious, typical,
and lack[ed] even minimal creativity.” Matthew Bender &
Co., 158 F.3d at 677. Creativity was lacking because industry
conventions, such as those in the legal profession, made the
choices obvious. Such conventions, the court stated, “so
dictate selection that any person composing a compilation of
the type at issue would necessarily select the same categories
of information,” and that “creativity inheres in making non-
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 13

obvious choices from among more than a few options.” Id.
at 677, 682. In this case, Experian’s choices are not obvious,
as illustrated by Experian’s evidence that the content in its
database differs materially from the content in other
compilations of consumer data.

    Closer to our case are two Eleventh Circuit decisions
involving directories. Warren Publishing, Inc. v. Microdos
Data Corp., 115 F.3d 1509, 1511–12 (11th Cir. 1997) (en
banc), involved a compilation of information about cable
system operators. The information was printed in a directory
that included “the name, address, and telephone number of
the cable system operator, the number of subscribers, the
channels offered, the price of service, and the types of
equipment used.” Warren Publ’g, 115 F.3d at 1512. The
compiler used whatever information the cable companies
provided in response to the compiler’s request for
information. Id. at 1519. The compilation was not
copyrightable under Feist because there was no selectivity;
unlike in this case, the compiler included the “entire relevant
universe known to it” in the directory. Id. at 1518, 1520.

    In BellSouth Advertising & Publishing Corp. v. Donnelley
Information Publishing, Inc., 999 F.2d 1436, 1439, 1442
(11th Cir. 1993) (en banc) (BellSouth), the Eleventh Circuit
similarly held that the plaintiff’s Miami yellow page business
directory was not sufficiently original to merit copyright
protection because the contents involved no more creativity
than the telephone book in Feist. Unlike this case, the listed
businesses in BellSouth chose whether to be listed and the
information to be included. 999 F.2d at 1441.

   A Fifth Circuit case involved a process of data selection
similar to the one in this case. The underlying information
14 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

conveyed was factual, but the manner of selecting and
displaying the information involved originality. Mason v.
Montgomery Data, Inc., 967 F.2d 135, 141–42 (5th Cir.
1992). In Mason, the plaintiff selected real estate ownership
information and displayed it on maps. Id. at 136. The court
held that this was sufficiently creative in selection to warrant
copyright protection, because the compiler made “choices . . .
independently . . . to select information from numerous and
sometimes conflicting sources,” including from factual public
records, and combined that information to make “an effective
pictorial expression of those locations.” Id. at 136 n.3, 140,
141. The same is true here.

    From this survey of circuit decisions since Feist, we draw
three general principles. First, although facts are not entitled
to copyright protection, factual compilations are entitled to
some protection as long as there is creativity in the selection,
arrangement, or coordination of the facts. Feist, 499 U.S. at
358; Warren Publ’g, 115 F.3d at 1515; Mason, 967 F.2d at
141. Second, the creativity that suffices to establish
copyright protection in factual compilations is minimal.
Feist, 499 U.S. at 348; Key Publ’ns, 945 F.2d at 512–13. For
illustration, the compilation of business names, addresses,
and phone numbers of interest to the New York City Chinese-
American community was sufficiently creative to warrant
copyright protection of a directory in Key Publications.
945 F.2d at 512–13; see also Kregos, 937 F.2d at 701–02.
Third, such compilations of factual information receive only
limited protection. 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 facts contained in a compilation
when preparing a competing work, as long as the competing
work does not exhibit the same selection or arrangement. See
Feist, 499 U.S. at 349; see also Kregos, 937 F.2d at 702, 709.
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 15

    Applying these principles to this case leads to the
conclusion that Experian’s lists are entitled to limited
protection. Experian’s selection process in culling data from
multiple sources and selecting the appropriate pairing of
addresses with names before entering them in the database
involves a process of at least minimal creativity. The listings
are compiled by first collecting and comparing multiple
sources, and then sorting conflicting information through the
creation of business rules that Experian created to select from
among the conflicts. As the Fifth Circuit said in Mason,
selection is sufficiently creative when the compiler makes
“choices . . . independently . . . to select information from
numerous and sometimes conflicting sources.” 967 F.2d at
141. Experian’s process more than meets that standard.
Much like the compilers in Mason and Key Publications,
Experian’s employees choose from multiple and sometimes
conflicting sources, and they use their judgment in selecting
which names and addresses to include in the database. See
Mason, 967 F.2d at 141; Key Publ’ns, 945 F.2d at 512–13.

     Experian’s employees, like the compiler in Key
Publications, also exclude information they deem irrelevant
to the interests of Experian’s marketing clients, information
such as business addresses, and the names and addresses of
the very elderly and incarcerated. See 945 F.2d at 513. Such
exclusions indicate some “thought and creativity 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 copyrightable expression.”
Feist, 499 U.S. at 362. The name and address pairings in
Experian’s database are also materially different from those
in other databases. With respect to the baseball pitching form
in Kregos, the Second Circuit observed that “[t]here is no
prior form that is identical . . . nor one from which [it] varies
16 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

in only a trivial degree.” 937 F.2d at 705. The same
observation can be made here.

    Natimark asserts that Experian’s selectivity cannot be
creative, because it is no more than a lengthy process to
discover facts, which are not copyrightable. Natimark
attempts to match Experian’s process to the Supreme Court’s
discussion in Feist of “industrious collection,” i.e., the hard
work that a compiler exerts in gathering facts that lacks
creativity to warrant copyright protection. 499 U.S. at
352–53.

    Experian’s methods, however, do not entail simple
replication of the data that Experian receives, as was the
situation in Feist. 499 U.S. at 362; see also Warren Publ’g,
115 F.3d at 1517–20; BellSouth, 999 F.2d at 1441. In all
those cases, the directory compilers were simply fed the data.
See Feist, 499 U.S. at 362 (“In preparing its white pages, [the
telephone company] simply t[ook] the data provided by its
subscribers and list[ed] it alphabetically by surname.”);
Warren Publ’g, 115 F.3d at 1519–20 (holding that directory
of cable operator information was not copyrightable when the
selection was not the compiler’s “own, but rather that of the
cable operators”); BellSouth, 999 F.2d at 1438, 1441
(involving a yellow pages directory containing information
entirely provided by others). Experian does not include the
“entire relevant universe known to it,” as in Warren
Publishing. 115 F.3d at 1518. Rather, Experian’s selection
process produces different, and at least according to Experian,
more reliable data than the other four largest database
compilers in the United States.

    On the basis of our review of the decisions in this and
other circuits, we must conclude that the name and address
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 17

pairings in this case are copyrightable as compilations under
post-Feist standards.

    That does not end the copyright claim inquiry, however.
To establish copyright infringement, the plaintiff must prove
not only ownership of a valid copyright, but copying by the
alleged infringer of constituent elements of the protected
work. Feist, 499 U.S. at 361; Unicolors, Inc. v. Urban
Outfitters, Inc., 853 F.3d 980, 984 (9th Cir. 2017). We
therefore must consider whether Experian has shown that
Natimark infringed, i.e., copied the material. Although this
issue was not reached by the District Court as it found the
material was not copyrightable, we may affirm the District
Court on any ground supported by the record. See, e.g.,
Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612,
615 (9th Cir. 2010) (citation omitted).

   B. Whether Experian established infringement

    Even though the factual compilation at issue here is
entitled to some protection, “the scope of protection in fact-
based works” is severely limited. Feist, 499 U.S. at 350; see
also BellSouth, 999 F.2d at 1445. The facts themselves can
be copied at will. As the Supreme Court said in Feist, “This
result is neither unfair nor unfortunate. It is the means by
which copyright advances the progress of science.” 499 U.S.
at 350. The Sixth Circuit said it well, “Given that the
copyright protection of a factual compilation is ‘thin,’ a
competitor’s taking the bulk of the factual material from a
preexisting compilation without infringement of the author’s
copyright is not surprising.” BellSouth, 999 F.2d at 1445
(quoting Feist, 499 U.S. at 349).
18 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

    For this reason, we have repeatedly recognized in this
circuit that when dealing with factual compilations,
infringement cannot be based on a showing that only a part of
the work has been copied. In the context of factual
compilations, we have held that infringement should not be
found in the absence of “bodily appropriation of expression,”
or “unauthorized use of substantially the entire item.” Harper
House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 205 (9th
Cir. 1989) (citations omitted). As we said in Apple
Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1446 (9th
Cir. 1994), “Under Harper House . . . there can be no
infringement unless the works are virtually identical.” It is
not enough to compare the allegedly infringing compilation
with only a portion of the copyrighted work.

    The bodily appropriation principle is consistent with our
more general rule that to establish that a work has been
copied, the two works must be compared side-by-side. See
Antonick v. Elec. Arts, Inc., 841 F.3d 1062, 1066 (9th Cir.
2016); Seiler v. Lucasfilm, Ltd., 808 F.2d 1316, 1319 (9th Cir.
1986). In Antonick, neither the copyrighted work nor the
alleged infringing work was introduced into evidence, so no
side-by-side comparison was possible. 841 F.3d at 1066. We
held that the plaintiff had not established infringement. This
was because, without such a comparison, it could not be
determined whether the two works were substantially similar.
Id. In Seiler, we reached a similar result, saying that the
plaintiff could not show infringement because “[t]here
[could] be no proof of . . . copyright infringement unless [the
plaintiff’s] works [were] juxtaposed with [the defendant’s]
and their contents compared.” 808 F.3d at 1319.

    In this case, the Experian database that was allegedly
infringed was one updated through September 2011. Neither
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 19

that entire database nor Natimark’s entire, allegedly
infringing database was introduced into evidence, and
perhaps as a practical matter could not have been.
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).

    Experian contends that it has established a triable issue as
to copying by offering the opinion of an expert that the match
rate between Experian files and the allegedly infringing
Natimark files is higher than the match rate between the files
of Experian and one of its legitimate licensees. Experian asks
us to hold that it has presented circumstantial evidence of
copying sufficient to send the case to a jury. It fails to cite
any authority from this circuit or elsewhere permitting
infringement to be established on the basis of circumstantial
evidence, and in the absence of any direct comparisons.

    We need not reach this issue, however, as we may affirm
the District Court on any ground supported by the record. See
Cosmetic Ideas, 606 F.3d at 615 (citation omitted). It is
undisputed that Natimark’s database was materially smaller
than Experian’s. While Experian’s database at the relevant
time included approximately 250 million pairings, Natimark’s
database contained name and address pairings for only
200 million consumers. Even assuming Natimark’s pairings
were exact copies of their counterparts in the Experian
database, the match rate would only be 80% and insufficient
to establish a bodily appropriation of Experian’s work.

    Decisions of our sister circuits bear this out. For example,
the Eighth Circuit found that a ratio of 74% of the same items
in both the copyrighted work and the infringing work was
insufficient to establish infringement of a factual compilation
20 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

under Feist. See Schoolhouse, Inc. v. Anderson, 275 F.3d
726, 729–30 (8th Cir. 2002). Similarly, the Sixth Circuit held
that a match rate of 61% of the same items found in both a
copyrighted and an infringing work was also insufficient to
establish infringement. See Ross, Brovins & Oehmke, P.C. v.
Lexis Nexis Grp., 463 F.3d 478, 483 (6th Cir. 2006). The
court said that a 61% match rate between the two
compilations could “hardly be considered the ‘same’
selection.” Id. (citation omitted). If we are to afford “thin”
protection to Experian’s factual compilation, as the Supreme
Court has directed under Feist, 499 U.S. at 349, we must find
substantial verbatim copying in the infringing work. See
Apple Comput., 35 F.3d at 1446; Key Publ’ns, 945 F.2d at
514. An 80% match rate between two compilations of names
and addresses in databases is insufficient to establish bodily
appropriation.

    Because Experian has not introduced the version of its
database that it claimed was copied, it cannot establish
infringement. Even if Experian could establish a triable issue
as to copying by comparing later versions of its database with
the alleged infringing database, however, the undisputed
evidence shows that Experian could not establish bodily
appropriation of expression. It can at best show a match rate
of 80%. Experian therefore cannot establish infringement.
For that reason, we must affirm the District Court’s grant of
summary judgment to Natimark on the copyright claim.

II. Trade secret claim

    The District Court granted Natimark summary judgment
on the state law trade secret claim as well, holding that
Experian did not have a valid trade secret in its compilation
of names and addresses because the names and addresses
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 21

were public knowledge and Experian did not explain how it
derived economic value from its compilation. The court also
held that even if there were a valid trade secret, there were no
triable issues of fact as to whether Natimark knew or had
reason to know that the data were either secret or stolen when
Natimark acquired the data.

    Arizona has adopted the Uniform Trade Secret Act, which
defines a trade secret as information that “[d]erives
independent economic value” from not being known or
readily ascertainable by the plaintiff’s competitors and is the
subject of reasonable efforts to maintain secrecy. A.R.S.
§ 44-401(4). A trade secret does not consist of “matters of
public knowledge.” Calisi v. Unified Fin. Servs., LLC,
302 P.3d 628, 631 (Ariz. Ct. App. 2013) (citing Enter.
Leasing Co. v. Ehmke, 3 P.3d 1064, 1069 (Ariz. Ct. App.
1999)). The subject matter of trade secrets “must be
sufficiently novel, unique, or original that it is not readily
ascertainable to competitors.” Id. (citing Ehmke, 3 P.3d at
1069). Arizona courts have considered customer lists and
have held that a trade secret cannot ordinarily consist of
matters of public knowledge. See id. at 632 (“[T]o be
protected as [a] trade secret, [a] customer list must be more
than a listing of firms or individuals which could be compiled
from directories or other generally available sources.”)
(citations and internal quotation marks omitted).
Nonetheless, if a business spends considerable effort and
resources in developing its trade secret, the trade secret may
be protected. Id. (citations omitted).

   Although the subject matter of Experian’s compilation
may be gathered from generally available sources that are
matters of public knowledge, Experian spends a considerable
amount of money and effort in developing the compilation,
22 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

and its compilation may therefore be protected under Arizona
law. See id. Experian has at least shown triable issues that its
database has economic value as a secret not readily
ascertainable by its competitors, and that its database differs
materially from other major compilers. See A.R.S. § 44-
401(4). According to Experian, 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 and
accuracy. And Experian asserts that it receives its business
due to the high accuracy of its name and address pairings. As
the Arizona Court of Appeals has recognized, “[v]alue will be
inferred if the owner can show that the information confers
upon it an economic advantage over others in the industry.”
Ehmke, 3 P.3d at 1070 (citation omitted). Experian contends
it maintains the secrecy of its database as well. Even though
it licenses the use of the database to others, it enters strict
security agreements with licensees to maintain the database’s
secrecy. Experian has made a prima facie showing that its
compilation of name and address pairings is a trade secret.

   Under Arizona law, misappropriation means either
acquisition or use of a trade secret with knowledge of
misappropriation. Misappropriation is defined as either:

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

       (b) Disclosure or use of a trade secret of
       another without express or implied consent by
       a person who either:
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 23

       (i) Used improper means            to   acquire
       knowledge of the trade secret.

       (ii) At the time of disclosure or use, knew or
       had reason to know that his knowledge of the
       trade secret was derived from or through a
       person who had utilized improper means to
       acquire it, was acquired under circumstances
       giving rise to a duty to maintain its secrecy or
       limit its use or was derived from or through a
       person who owed a duty to the person seeking
       relief to maintain its secrecy or limit its use.

       (iii) Before a material change of his position,
       knew or had reason to know that it was a trade
       secret and that knowledge of it had been
       acquired by accident or mistake.

A.R.S. § 44-401(2).

    Experian asserts that the District Court erred in holding
that there were no triable issues of fact as to whether
Natimark knew or had reason to know when it acquired the
data that the data were obtained through improper means.
Experian also argues that the District Court erred in focusing
solely on Natimark’s knowledge with respect to its
acquisition of a trade secret, as opposed to use, in granting
Natimark summary judgment.

    The evidence of Natimark’s knowledge in this case is
sufficient to survive summary judgment. Experian has
established triable issues of fact as to whether Natimark knew
or had reason to know that it acquired and used a trade secret
that was obtained through improper means. See id. In
24 EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS.

JustMed, Inc. v. Byce, 600 F.3d 1118, 1129–30 (9th Cir.
2010), we considered a similar provision of Idaho law, and
recognized that improper acquisition and improper use of
protected works are independent bases for trade secret
liability.

    Here, evidence of the low price that Natimark paid for the
data goes to whether Natimark had constructive knowledge
that the data it obtained were acquired through improper
means. According to Experian, Natimark paid less than 1%
of the market rate for a one-time license to obtain actual
ownership of data, and this would indicate knowledge. See
Syntex Ophthalmics, Inc. v. Novicky, No. 80 C 6257, 1982
WL 63797, at *2, *11 (N.D. Ill. May 6, 1982) (holding
$20,000 payment for technology that cost $1 million to
develop demonstrated constructive knowledge for trade secret
claim). Natimark’s obtaining ownership of data through an
invoice, which Experian argues is unusual in the industry, as
opposed to obtaining limited use rights in the data through a
written agreement, is further evidence of constructive
knowledge. Experian also submitted evidence of Natimark’s
President’s prior experience that should have put him on
notice of an improper acquisition. Experian therefore
submitted sufficient evidence to withstand summary
judgment on the issue of whether Natimark knew or had
reason to know that it acquired and used a trade secret that
was obtained through improper means. See A.R.S. § 44-
401(2). The District Court erred in granting summary
judgment to Natimark on the trade secret claim.

                        Conclusion

   The District Court correctly granted Natimark summary
judgment on Experian’s copyright claim. Experian’s name
   EXPERIAN INFO. SOLS. V. NATIONWIDE MKTG. SERVS. 25

and address pairings are factual compilations entitled to only
thin copyright protection. Experian failed to establish
infringement. The District Court erred in granting Natimark
summary judgment on the trade secret claim, because there
are triable issues of fact as to Natimark’s knowledge of
misappropriation. We reverse and remand for further
proceedings on that claim.

  AFFIRMED in part and REVERSED in part and
REMANDED.