Third Circuit Rules AI Training on Copyrighted Material Is Not Fair Use

Summary

The U.S. Court of Appeals for the Third Circuit upheld a lower-court ruling that ROSS Intelligence infringed Thomson Reuters’ copyrights by using Westlaw headnotes to train a competing legal-research AI platform. Reuters sued ROSS in 2020, alleging that the startup obtained the headnotes through LegalEase Solutions after Westlaw denied it access, then used the material to develop its product rather than for legal research. The appellate panel held that Westlaw’s headnotes are original, copyrightable works because the editors’ selection and arrangement, as well as their concise presentation of the relevant factual and legal reasoning, reflected a minimal “creative spark.” The court also rejected ROSS’ fair-use defense. It characterized the training use as “minimally transformative at best,” reasoning that the AI-training step was only an intermediate means to the same commercial purpose: building a competing legal-research service. The panel said the use could reduce Westlaw’s value in its existing market and in a potential market for licensing headnotes as AI-training material. The decision affirmed the lower court’s summary-judgment ruling and was joined by Judges L. Felipe Restrepo and Emil J. Bove III. Thomson Reuters welcomed the decision, while ROSS’ attorney said the company disagreed and intends to seek Supreme Court review, arguing that the ruling leaves uncertainty over copyright law’s application to AI training and could affect AI innovation and development. The ruling addresses a specific dispute over editorial legal headnotes; the article does not state that it resolves all questions about training AI on copyrighted works.