Appeals Court Says You Can Copyright A Collection Of Facts... If You Leave Out A Few

from the wait,-what? dept

The 9th Circuit is at it again with copyright. For whatever reason, when the 9th Circuit gets a copyright case, it frequently seems to mess everything up about it. This latest case -- Experian v. Nationwide Marketing Services -- is no exception. One of the most famous, and most important, copyright cases to hit the Supreme Court was the Feist case. We've mentioned it many times before. The short summary is that a phone book publisher had inserted a few "fake" names and numbers into its book to try to catch copycats. It found one, and sued for copyright infringement. The Supreme Court rejected it, noting that copyright does not apply to facts, and clearly rejecting any notion that mere "sweat of the brow" in collecting facts gives you a copyright.

This was good. But... there was one part of the ruling that still left open the potential for mischief, and appeals courts have been making mischief in that loophole ever since. Here's the issue: 17 USC 103 allows for copyright in "compilations," though it notes this copyright "only extends to" the creative input in making the compilation, and not the underlying works (whether they are covered by copyright or not). The common sense explanation of this is that if, say, you're putting together (with the proper licenses) a "best of..." CD (let's say "Best of the 70's"), then you can have a copyright on that compilation. Not in the underlying songs, which you've licensed properly, but in the creativity in choosing the 7, 12, 15 or whatever number of songs, and the order you've placed them in. That requires some creativity, and it may be enough to get a fairly narrow copyright.

In Feist, the question was whether or not putting together all the phone numbers and names was covered by that compilation setup, and the Supreme Court said no. A mere collection of facts has no creative element and thus can't be considered a compilation for the purpose of establishing a new copyright. That's good. But the opinion bent over backwards to suggest that lots of other compilations of data might have the requisite creativity. And... far too many courts have taken the Supreme Court up on that proposition, potentially eviscerating the valuable promises of Feist.

That takes us to this case. Here, Experian, as you're probably aware, is one of the massive consumer data services, and one of its databases, the ConsumerView Database, contains around 250 million records about individual consumers, pairing together their names and addresses. Names and addresses. This seems pretty damn similar to Feist's names and phone numbers, right? Well, an upstart data collection company, Nationwide Marketing Services (or Natimark) somehow got its hands on a database called the National Consumer List, with about 200 million records. At some point, it tried to sell that database to Experian (apparently, the whole market is somewhat incestuous in passing around and selling data back and forth between each other, using different databases to mix and match and keep things up to date).

Experian analyzed the data from the Natimark NCL list and found that it was way too close to its own ConsumerView Database (CVD), finding it 97% the same (a later analysis said 94%). Thus, this lawsuit. To me, this seems like a pretty clear application of Feist. Names and addresses is factual information, there's no copyright in the compilation, toss the case. And that's what the district court originally found. Experian tried again, now using trade secrets. Once again, the district court said "nuh-uh." The case was then appealed to the 9th Circuit Appeals Court... who really messed it up and decided that, yes, Experian can have a copyright in the compilation.

The opinion goes through a long list of other data compilation cases, with rulings on either side, and finally says there's enough creativity in the collection. Why? For two key reasons. First, Experian's database left some people out -- such as the elderly. By not including the "entire relevant universe known to it," the court concludes that it has made creative choices in what not to include. Second, Experian employees had to make some decisions about which address goes with which people. Specifically, in compiling these databases from multiples sources they may find that there are multiple possible addresses for an individual, and Experian employees had to choose which address to put down. And that, in the minds of the 9th Circuit, is the level of creativity necessary to get a copyright.

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.”

But... that seems an awful lot like bringing back the "sweat of the brow" argument. It's not creative choices being made here. It's choices around which information is correct -- i.e., factual.

The exclusion of elderly people also seems like a bizarre factor on which to judge "creativity."

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.”

But, under that standard, it would seem that Feist itself was decided incorrectly. Remember, the whole reason why Feist became a case in the first place was because the original phone book had added fake names and numbers. How is that any different than choosing to exclude names of old people? Indeed, you could make an argument that adding in fake numbers requires more creativity than excluding factual data on old people.

Under this standard, it seems quite easy to basically wipe out Feist entirely. If you want a copyright on your big collection of purely factual data, drop a few entries that no one needs, and claim that was your creative choice.

In this case, Experian still probably isn't thrilled with the result, since after establishing that Experian can have a copyright in the compilation, it then says Experian failed to actually prove infringement. The court notes that to prove infringement of a compilation, you need to show that basically the entire compilation was copied. But, here that was not shown.

In this case, the Experian database that was allegedly infringed was one updated through September 2011. Neither 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.... 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.

It also points out that Experian's own evidence shows that the Natimark database was only 80% the size of Experian's, and that's not enough to show that the entire compilation was copied. So that dooms Experian's copyright argument. But, still, the decision that the copyright exists in the first place is quite troubling and could create all sorts of trouble. It will enable a fake "sweat of the brow" right, which should be cause for concern. This could have all been avoided if everyone recognized that compilation copyrights shouldn't be for merely collecting giant tubs of factual data, but compilations of copyright-protected material. Unfortunately, Congress (perhaps stupidly) included the term "data" in its definition of compilation. It would be nice if Congress rectified this mess by deleting that word from the definition, but there's little chance of that happening any time soon...

As we were just discussing, the US's lack of a "database right" as found in Europe, has actually been a huge boon to innovation, especially on the internet. This ruling could create some problems for that by establishing a de facto database right, if the initial compiler takes a few meaningless steps to establish the modicum of "creativity" necessary to satisfy the court here. And, of course, it's still not clear why adding in fake info doesn't qualify, while deleting a few entries does.

For what it's worth, the court also overturned the lower court's ruling on trade secrets, saying that there's enough evidence to say a jury should determine whether or not Experian's database is covered by trade secret law. This is... also bad, but wading into the huge mess that is trade secret law is something that will probably cause me to start banging my head repeatedly on the wall, and I really have no desire to do that right now. Perhaps another time.

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Filed Under: 9th circuit, compilations, copyright, creativity, data, database rights, facts, feist

Companies: experian, natimark