Thomson Reuters Wins AI Fair Use Appeal vs Ross
A U.S. appeals court has rejected the argument that training an AI system on copyrighted material counts as fair use. The Third Circuit upheld Thomson Reuters’ victory over the now-defunct legal startup Ross Intelligence, in the first ruling of its kind by a federal appeals court.
The decision, issued September 29, 2026, affirms a February 2025 ruling from a Delaware district judge. The court’s 32-page opinion was initially filed under seal and has since been released.
What the Court Decided
Thomson Reuters sued Ross in 2020, saying the startup copied thousands of Westlaw headnotes, the short editorial summaries of legal points attached to court opinions, and used them to train a competing AI-powered legal search engine. Ross shut down in 2021, saying the lawsuit’s cost forced it to close.
The appeals panel ruled that Westlaw’s headnotes are original enough for copyright protection and that Ross’s copying was not fair use. The judges found Ross took the headnotes to build a direct competitor, which undercut any claim that the use was transformative. The opinion also pointed to harm in a developing market for licensing such material as AI training data.
Why the Ruling Matters, and Its Limits
This is the first time a U.S. appeals court has weighed in on fair use for AI training, so it will be cited in the wave of copyright cases against AI companies. But the court went out of its way to narrow the ruling.
Ross’s system was not generative AI. It retrieved passages from existing court opinions rather than creating new text. Judge Tamika Montgomery-Reeves, writing for the unanimous panel, called the dispute “no more than an ordinary copyright case” and distinguished it from the generative AI cases now moving through the courts. For background on how these models actually work, see what is generative AI.
Who Weighed In
The Recording Industry Association of America and the National Music Publishers’ Association filed a joint brief arguing that training an AI model on copyrighted works to build a competing product cannot qualify as fair use. A Thomson Reuters spokesperson said the company was pleased and called respecting copyright essential for innovation. Ross did not respond to requests for comment.
The ruling also ordered Ross to cover Thomson Reuters’ costs on appeal. The debate over how copyright applies to AI systems is far from settled, as we cover in what are the risks of AI.
FAQs
What did the court actually rule?
That Ross Intelligence’s copying of Westlaw headnotes to train a competing legal search tool was not fair use, and that the headnotes qualify for copyright protection.
Does this mean all AI training is infringement?
No. The court limited its ruling to these facts. Ross built a direct competitor using copied editorial material, and its system was not generative AI.
Why was the opinion under seal?
The 32-page opinion was initially filed under seal, with the parties given time to propose redactions. It has since been released in full.
What happens next?
The decision is precedential in the Third Circuit and will likely be cited in the many pending AI copyright cases, though courts hearing generative AI disputes may treat it as distinct.
