Third Circuit rules AI training on copyrighted legal data is not fair use

Key points

• The Third Circuit affirmed a lower court’s decision that ROSS Intelligence infringed on Thomson Reuters’ copyright by using Westlaw headnotes to train its AI.
• Judge Tamika Montgomery-Reeves ruled that Westlaw’s headnotes are original works protected by copyright due to their unique selection and arrangement.
• The court rejected ROSS’s fair use defense, stating the use was 'minimally transformative' and served to create a direct market competitor.
• The full appellate opinion is currently under seal, with only a one-page judgment stating 'AFFIRMED' released to the public.
• The ruling impacts the legal landscape for AI training, potentially limiting the ability of companies to use copyrighted material for training competing products.

Background

This case follows a broader trend of legal disputes over AI training data, including the U.S. Department of Justice’s recent support for OpenAI in a lawsuit against The New York Times, where the government argued that AI training on copyrighted text is fair use. In contrast, the Third Circuit’s ruling in Thomson Reuters v. ROSS Intelligence suggests a stricter interpretation of fair use when the AI is used to create a direct competitor to the copyright holder. Previous cases, such as Amazon’s use of rare books for AI training, have also raised concerns about copyright and preservation, highlighting the growing tension between AI development and intellectual property rights.

How outlets are covering it

Courthouse News Service emphasizes the landmark nature of the decision, noting that it could set a precedent for AI copyright cases. Copyrightlately.com highlights the procedural aspect of the case, pointing out that the full opinion is under seal and that the ruling may not fully address the complexities of fair use in AI training. Music Business Worldwide, while primarily focused on the music industry, notes the broader implications of the ruling for AI training and copyright, suggesting that the decision could affect other industries as well. The outlets differ in their focus, with Courthouse News Service and Copyrightlately.com providing more detailed legal analysis, while Music Business Worldwide offers a broader industry perspective.

Why it matters

The Third Circuit’s ruling in Thomson Reuters v. ROSS Intelligence is significant because it is the first federal appellate decision to address fair use in the context of AI training. The court’s rejection of the fair use defense could have far-reaching implications for the AI industry, potentially limiting the ability of companies to use copyrighted material for training AI models. This decision may also influence future cases involving AI and copyright, as well as the broader debate over the balance between innovation and intellectual property rights.

What to watch

The full opinion in Thomson Reuters v. ROSS Intelligence is expected to be released soon, as neither party has proposed redactions. The ruling may face further legal challenges or appeals, and its impact on other AI copyright cases will be closely watched. The decision could also influence the development of AI training practices, as companies may need to reconsider their use of copyrighted material to avoid potential infringement claims.