Third Circuit Rules AI Training on Competitor's Legal Data Violates Copyright
The Third Circuit Court of Appeals ruled that training an AI system on a competitor's copyrighted editorial summaries constitutes infringement, not fair use. The court affirmed that Westlaw headnotes are protected works and that ROSS Intelligence’s use of them to build a rival legal research tool was minimally transformative. This marks the first federal appellate decision addressing fair use in AI training, though the full opinion remains under seal.
Key points
- The Third Circuit affirmed a lower court ruling, finding that Westlaw headnotes possess the 'creative spark' required for copyright protection.
- The court rejected ROSS Intelligence's argument that using headnotes for AI training is fair use, labeling the practice 'minimally transformative at best.'
- The ruling emphasizes that using copyrighted material to train a competing commercial product harms the original creator's market value.
- ROSS Intelligence has indicated it will appeal the decision to the Supreme Court.
- The full opinion remains sealed while the court reviews requests for redactions from the parties.
Background
This case follows a 2020 lawsuit by Thomson Reuters against ROSS Intelligence, which had used a third party to access Westlaw data after being denied direct access. In 2025, a federal judge in Philadelphia granted partial summary judgment to Thomson Reuters. The broader legal landscape includes recent actions by the U.S. Department of Justice, which argued in September 2026 that AI training on copyrighted text is fair use, a stance that contrasts with this specific appellate ruling.
How outlets are covering it
TechSpot and Courthouse News emphasize the ruling's potential to set a precedent for AI training disputes, highlighting the court's focus on market harm and the commercial purpose of the training. LawSites notes that the case is significant but may have limited implications for generative AI, as ROSS's system was non-generative and predated the current AI boom. All sources agree that the headnotes are copyrightable, but they differ on the ruling's broader impact: some see it as a landmark for AI, while others view it as a confined decision based on specific facts of direct competition.
Why it matters
The ruling clarifies that using a competitor's editorial work to train an AI for a similar market is not protected by fair use. It signals that AI developers cannot assume public records or summaries are free for training if they involve protected editorial judgment. This may influence how companies approach data licensing and copyright compliance in AI development.
What to watch
ROSS Intelligence plans to appeal to the Supreme Court. The full opinion is expected to be released after redaction reviews are completed. The decision may influence ongoing litigation involving other AI companies and copyright holders, particularly regarding the use of editorial content in training data.
- A court just ruled that training an AI on someone else's editorial work isn't fair use TechSpot
- US appeals court upholds Thomson Reuters' landmark win in AI training lawsuit Reuters
- 3rd Circuit Rules For Thomson Reuters In Its Copyright Fight Against Legal Research Startup ROSS LawSites
- AI training of copyrighted material not fair use: Third Circuit Courthouse News
- AI Lost Its First Fair Use Appeal. Suno Should Be Worried. Forbes
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