Banxcorp v. Costco Wholesale Corp.

Interest rates were not protectable under copyright law because, as mathematical averages, they were uncopyrightable facts and because they are too short to be copyrighted.

Opinion (Karas): Banxcorp publishes indices and benchmarks that measure the rate and performance of banking and other industries. Banxcorp filed a copyright infringement suit against Costco Wholesale Corporation ("Costco") and Capital One Financial Corporation ("Capital One"), claiming that Banxcorp has a federal copyright in its published series of the national averages. Costco and Capital One entered into a marketing agreement to produce advertisements comparing their interest rates to the national average interest rate that Banxcorp published on its website. To succeed in a copyright claim a party must first show ownership of a valid copyright and show infringement of the copyright by the defendant. Costco and Capital One did not dispute that they had used the interest rate published by Banxcorp. Costco and Capital One filed a motion for summary judgment claiming that Banxcorp had failed to state a claim on the grounds that Banxcorp did not hold a valid copyright. Costco and Capital One claimed that, because the average interest rate is a fact and too short of a phrase, that Banxcorp did not have a valid copyright and therefore failed to state a claim. Banxcorp argued that the average was actually a projection and was not just merely a fact. The court agreed with Costco and Capital One, stating that "...the averages are unprotectable because they are uncopyrightable facts [and] because they are too short to be copyrighted..." The court determined that the average was not a projection because Banxcorp had received the interest rates from numerous banks and computed the exact arithmetic mean of the information gathered. Accordingly, the court GRANTED the defense's motion for summary judgment.