In a closely watched copyright dispute regarding materials used for artificial intelligence training, the U.S. Court of Appeals for the Third Circuit has affirmed summary judgment in favor of Thomson Reuters Enterprise Centre GmbH. The appellate court upheld rulings determining that Westlaw’s legal headnotes qualify for copyright protection and rejected the fair use defense raised by legal tech startup ROSS Intelligence Inc.
The litigation centers on Westlaw headnotes—editorial summaries placed at the beginning of judicial opinions that outline specific points of law. Thomson Reuters sued ROSS after discovering that a third party hired by ROSS had utilized thousands of Westlaw headnotes to compile legal memos. These memos were designed to train ROSS's AI-driven legal research platform to provide relevant passages of court opinions in response to natural-language user queries.
Distinguishing the matter from other broader generative AI cases, the Third Circuit evaluated the dispute under standard copyright principles. On the question of copyrightability, the court held that the Westlaw headnotes contain sufficient "creative spark" resulting from editors' creative decisions, such as determining which legal points warrant highlighting and how to phrase them. The court dismissed arguments that the protection grants a monopoly over the law itself, noting that underlying judicial opinions remain fully in the public domain.
Addressing the fair use defense, the appellate panel analyzed the statutory factors and found heavily against ROSS:
- Purpose and Character: The court found ROSS's commercial use to be minimally transformative because the memos shared the identical ultimate purpose as Westlaw—powering a legal research platform—and noted that the copying was unnecessary since the memos could have been drafted from raw judicial opinions.
- Nature of the Work: The second factor favored ROSS, as the headnotes lean closer to factual reporting than pure fiction.
- Amount Used: The third factor favored Thomson Reuters because taking protected headnotes was entirely unnecessary for training purposes.
- Market Effect: The fourth factor favored Thomson Reuters, finding that ROSS's product competed directly in the legal research market and harmed potential licensing markets for AI training datasets without offering countervailing public benefits.
With most statutory factors weighing against ROSS, the Third Circuit affirmed the lower court's decision, cementing protections for legal editorial content in the era of AI development.